Best Trade Solution

Dear sir,

the ISP98 rule 2 says

(iii) by negotiation, in which case the issuer honors by paying the amount demanded at sight without recourse.

does it mean that the issuing bank can negotiate? if an issuing bank negotiates, can it charge negotiation interest from the beneficiary?

good question. in my opinion, no, the issuing bank cannot charge interest for negotiation. there is a significant difference between negotiation of issuing bank and nominated bank. issuing bank is the primary obligatory and must pay from its own fund which is independent of the issuing bank's relation with the applicant.

personally i dont like the idea of negotiation and thereby charging interest by the primary obligatory, who negotiate without recourse, including the confirming bank. if the applicant / issuing bank fails to reimburse the issuing bank / confirming bank, how long one will continue to charge interest.

THE NEGO BY THE ISSUER IS WITHOUT RECOURSE

the issuing bank can not negotiate a presentation anyway ,in my opinion