Documents To Be Sent Directly To Issuing Bank!

[Navi]

Hi friends,

We are about to issue a confirmed LC.

Applicant insists that only invoice would be presented to confirming bank and all other originalls would be sent directly to us (issuing bank) by beneficiary. This makes me suspicious because beneficiary will get LC amount from confirming bank only against invoice and confirming bank will reimburse himself accordingly. In case of a fraud or non-performance of beneficiary how can we avoid payment? We request a benef. decl. that they will send all docs to us except for original invoice, but how can this be helpful or protective?

Do I act too prudently or show a reasonable care?

I would be glad to hear your experiences..

[jmitra]

the case is in deed suspicious. i just dont understand why the applicant is looking for such option and thus taking in the risk of fraud. if the beneficiary is allowed to draw just by using the invoice, there is no point of reviewing the other documents. my sense tells that the beneficiary will not provide many document as requested. but at the same time dont want to rely on the applicant for the waiver also considering the fact that you as an issuing bank may not accept the presentation. so better try to negotiate with the invoice only. personally i will never accept such request. client will make many request but its not necessary to meet all of them.

[Navi]

Thanks jmitra for your comment,

I persuaded applicant that beneficiary will present at least 1 original of all documents to confirming bank and copies + 1/3 original B/L directly to us. I hope, this would be a better solution.

regards

[iLC]

humm, but still there may be problem. you see, the beneficiary is not submitting the full set of BL to teh confirming bank. the timining of sending the 2nd lot is not also clear. even with this modification you right on the goods is not beyond question. i would prefer to send all the original to the issuing bank and the confiming bank in a standby position.

[hassan]

Dear Navi,
please ask Applicant why it insists on an so unusual way? i also think like you i/e it must be a fraud.
because what will happen if the other docs especialy transport document be discrepant? you can not claim back your mony from confirming back.
you sujest applicant issuing an unconfirmed l/c . if he dosen,t accept it, you don,t daubt that applicant has something in his mind!!

[shahriar]

i think discrepancy is not the big issue here. since confirming bank is having one of all the original, there should be no problem in assessing compliance. the only possible problem is with those documents which are required in full set. by the way, there are many documents which are issued in only one original. dear navi, how have you planned to deal with them?

regd

shahriar