When Is An LC Issued

[Finance]

Dear All,

We recently requested that our bank issue a letter of credit for us.

The provided us with a copy of the "issued" LC, but days later we discovered that the LC was not transmitted.

Our relationship manager is insisting that the LC was issued, even though it was never transmitted. Is this possible under UCP 600?

If the LC was under ISP 98- it would not be issued since it has not left the issuers control. But under cup 600 i have not found a parallel stipulation.

Any ideas?

Thank you in advance

[picant]

Hi Pal,

the liability of a bank starts when the l/c is issued.But when the l/c is issued? Probably when it is booked in the credit line,
when transmitted or when commissions are debited in applicant account. Frankly, a draft copy of l/c is sent to be approved before effectively transmitting the MT700 or the like.
It will depend on the letter, on the messages exchanged by the bank and applicant. Something for lawyers.....
Ciao

[Navi]

Hi friend,

UCP 600 is silent about the method of issuance of an LC. It may be (mostly) issued via SWIFT but via mail as well.

Once, for a domestic LC, we prepared LC and advised to beneficiary via registered letter only, SWIFT not used.

If the issuing bank has SWIFT RMA with the advising bank then there is no reason to issue LC via other methods i/o SWIFT.
.
You may ask your bank how the LC transmitted to beneficiary or his bank. And contact beneficiary whether he received LC or not.

[hainam]

I agree with Mr Navi. The LC may be advised to Ben by mail or some delay in handling transaction of the advising bank. You can check with the Ben whether he receive the LC or not