Urgent Help Needed In Understanding Field 53A For Confirmation Of LC

[hmv]

To all experts out there,

I have a irrevocable transferable LC issued by a reputable Chinese Bank to a turkish beneficiary bank who wishes to add confirmation to the LC. Under field 49A of the LC it states May Add and beneficiary has requested their bank to add their confirmation but the advising bank has come back to my chinese bank insisting that it is necessary for my side to fill up the 53A field indicating my reimbursing bank. Confusion arises here because my chinese bank is not using a third reimburser bank but itself being the drawee and hence they do not see the need to fill up field 53A.

Is it true that because the advising bank has allowed my issuing bank to be its own reimbursing bank then there is no need to fill up field 53A and that the advising bank can still proceed with its confirmation?

Pls refer to below response from their advising bank:

Nevertheless, due to our internal procedures, reimbursement bank information in the field of 53A and reimbursement authorisation (with the value date information) in the field of 78 have to be given.

In particular of your case, our general directorate has expressed their opinion that our confirmation can be added with the condition that the issuing bank shows itself as reimbursement bank and authorises us to reimburse with value date information.

With this present condition, since the L/C text is not in accordance with our internal procedure, our bank's confirmation can not be added.

Urgent help needed. many thanks!

[picant]

Hi Pal,
in my view field 53 is not necessary, as issuing bank may quote a bank, then not authorizing(at that time) the latter to honour reimbursement claim.Some banks require this datum to complete the scenario, when adding confirmation.
So if a bank requires it, your bank has to indicate it and if it is a direct debit stating it in field 78.
Other comments appreciated
Ciao

[hmv]

Hi Pal,

Appreciate your comment on this matter. Do you think a period of presentation 15 days is enough for delivery from europe to china ? I have a LC with Latest shipment date 31 July 2016 and expiry date 21 August 2016, but the beneficiary is arranging shipment and he would like to amend the latest shipment date to a later date but as u can see the expiry date of LC is pretty near. What is your advice on this matter?

[Navi]

Hi,

In this case, if I am not wrong, confirming bank requests issuing bank to state itself (issuing bank) in field 53A.

It seems not logical. In either cases, where 53A is filled with issuing bank or left blank, the confirming bank will claim proceeds from issuing bank.

But to settle the matter, I see no harm for issuing bank to do the request of confirming bank anyway.

[quang]

I think your bank can request IB amend LC before add confirm

[dodo]

Hi,
In the case of confirmation, the confirming bank often asks to add the reimbursing bank in field 53A. If your good bank does not have the third party reimbursing bank, you can add your bank in that field. Depending on your internal process, MT 740 reimbursement authorisation could be issued or not. You also limit the risk by indicating that the reimbursement will be effected after xxx days of receipt the confirming bank's claim message. That will help you to have enough time for receving docs before honoring their claim. However, normally, the confirming bank can accept 3 or 5 working days.