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Hi everyone!

I would very much appreciate if you could provide me with some info and clarification (best to your knowledge) regarding some issues that we have stumbled upon:

Please note, L/C's (oil business) relevant clauses are:
a) Presentation of 1 original and 2 copies of documents unless otherwise specified
b) TELEX/SWIFT document A and document B acceptable
c) The nominated bank is to send documents in one lot by courier to our address as quoted...
d) Upon receipt at issuing bank's counters of nominated bank's duly tested telex or swift certifying that you have taken up and sent to our address documents issued in strict conformity with L/C's terms and conditions, we shall cover you at maturity date as per your instructions...

1. How would you interpret part of the fourth L/C clause that a nominated bank must certify that it have taken up documents? As that it had received documents from bnf or that it had incur its def payment undertaking?

2. How would you interpret following L/C clause: "TELEX/SWIFT document A and document B acceptable"? As TELEX/SWIFT document A and document B acceptable instead of originals, or that you are supposed to send document A and document B by fax, and issuing bank shall find it acceptable?

3. Is it usual to receive documents by fax/email from bnf, and than sent it the same way (by fax/email) to issuing bank requesting payment (original documents shall be presented and sent to issuing bank after payment has been effected)? If so, is it done through authenticated fax/encrypted email or just regular fax/email? Has payment been effected in such cases and was it on time?

4. According to L/C terms, nominated bank is supposed to send SWIFT msg to issuing bank confirming that it have taken up and sent documents strictly compliant to L/C's terms to issuing bank's address requesting payment. If it had received documents by fax/email from bnf, and than sent it the same way (by fax/email) to issuing bank, what would it state in that SWIFT msg? Would you send that SWIFT msg at all or would you wait for original documents to be presented ?

Thank you in advance for your time and input.

Hi,
I tried to express my opinions shortly below for your questions.

1) When documents presented, the nominated bank may examine the documents and incur its deferred payment undertaking if documents comply. However, if the LC is confirmed, this undertaking will be without recourse. In case of non-confirmed LC, nominated bank will probably either not incur its undertaking or incur with recourse.
As an issuing bank, if I receive such a message from nominated bank, I would consider that documents were checked by the nominated bank, they are found complying and presentation honoured by the nominated bank. (NB incurred its deferred payment undertaking with recourse or without recourse)
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2) I don’t understand what is meant by TELEX/SWIFT document. Clarification needed.
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3) It is not common to receive documents from beneficiary by means of mail/fax and send issuing bank in the same way, at least I haven't heard up till now. I don't think most banks will be eager to this method because of authenticity issues and risk. If the L/C also requires original (paper) documents to be presented, banks will probably wait those documents to be received before authorising payment.

regards