May Add - Must The Advising Bank Request Beneficiary?

[hachem]

Dear expert,

A MT700 received by the advising bank and indicationg in the filed 49 : confirmation instruction ''May add''.
In this case, the advising bank must choose whether it will add its confirmation or not without requesting the beneficiary agreement ? or the advising must request the beneficiary agreement before adding its confirmation?

Regards
H Jallouli

[Westley]

Hello Hachem,

Each institution would have their own internal procedures to deal with this situation. If you choose to add your confirmation and advise the LC to the beneficiary, you run the risk of not being able to collect your commission and fees in case the LC is not utilized.

My advise would be to collect your fees prior to adding your confirmation and and advising the lc.

Regards
Westley

[hachem]

Hi Westly,

I have made a search about this topic and I found that generally if the issuing bank put the mention May add in he confirmation instruction, this means that the advising bank must request the beneficiary agreement about confirmation because the confirmation fees are to be collected before adding its confirmation and from the beneficiary.

In any case the advising bank must notify the L/C to the beneficiary even if it does not agree to add its confirmation. It must specify in the notification that it does not include the advising bank confirmation.

Regards
H Jallouli

[picant]

Hi Pals,

IMHO, the complete sentence is: may add on beneficiary's request and costs.
So the advising bank will act as required to add confirmation, included a deny to the issuing bank if it is not prepared to add its undertaking and wait for the beneficiary decision in few days.
Other comments appreciated
Ciao

[abrar]

My view is that whilst there may be an implied convention for the proposed confirming bank to request the beneficiary as to whether or not it requires confirmation to be added and if so, to collect its charges prior to adding its confirmation, since there is no specific interpretation under the UCP on this point, this requirement cannot be enforced on the nominated bank.

Therefore, in the extreme case, if the nominated bank chooses to add its confirmation without agreement of the beneficiary and/or without collection of its charges, the issuing bank remains bound by the provisions of sub-article 37c of UCP600.

[ebenson]

In my opinion it is entirely at beneficiary's discretion whether to request advising bank to add confirmation or not. If Beneficiary wants then advising bank must collect their fee prior to adding confirmation and advise to issuing bank accordingly so that issuing bank up date their record accordingly