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i was wondering if some could help on this issue. most of the time an amendment is initiated from the part of the beneficiary. the beneficiary sends an email to the applicant who in turn ask the issuing bank to amend the lc accordingly. theoretically it is possible that the beneficiary request the issuing bank directly to issue an amendment. if such an amendment is issued which has the exact effect of the beneficiary's request, will it be necessary for the beneficiary to accept the amendment again? or can the beneficiary reject the amendment?

Hi Friend

As per UCP-10,c: Beneficiary should (not must) give a notification of acceptance or rejection of an amendment. And if beneficiary fails to do this, issuing bank can determine whether amendments accepted or not, from the documents received. In case of multiple amendments, it will be difficult to find out which amendments were accepted and which of them rejected. In my opinion ICC here protect beneficiary more than applicant. Beneficiary has no obligatory to advise acceptance or rejection of amendment as per ICC.

regards

dear navi,

thanks for your answer. agree with you. but can the beneficiary reject the amendment?

Dear dholat,
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Rejection of an amendment by beneficiary which was requested by themselves is out of concern of UCP (my opinion). But here the method of request may be important. If beneficiary requests this via his bank, this amendment may bind him. But in case of request from applicant directly, this will be out of banking cycle and no binding effect to beneficiary and may reject amendment.
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Further comments from our experts appreciated.
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regards

is it not possible that beneficiary initiate the amendment and the issuing bank accept it?

its not possible for the beneficiary to amend the LC. the beneficiary can merely request for amendment. the entity which issues a LC has the right to amend it. whether beneficiary can refuse an amendment requested by it is a issue to debate i think. under UCP frame work, if a beneficiary request an amendment and subsequently reject it, i see no problem. after its the beneficiary who asked for it. there should be no gain or loss to the issuing bank; at least theoretically.

however under standby letter of credit this is very important and in fact ISP98 has a dedicated rule for it which implies that the request of the beneficiary will be treated as the consent of the beneficiary to the amendment.

according to UCP 600 the beneficiary may reject the amendment even if itself has request to be issued and may it states that the situation of the it,s request time has been changed so know it is not consent with that amendment.