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Bank A issues a Letter of Credit. LC is available with any bank by negotiation

Beneficiary submits documents to Bank B.

Bank B negotiates the documents and sends them to Bank A. Bank B then claims reimbursement from Bank A.

Is Bank A obligated to Reimburse Bank B even before the documents have arrived at Bank A’s counters? Please note Article 7c of UCP 600.

Thank you in Advance.

Hi Pal,

Many l/c are issued with mixed reimbursement instructions; negotiation with the possibility to claim reimbursement from a third bank-it is tipical for "payment" credits, payment without reimbursement instructions as a so called flaw(see the latest ICC Opinion TA 879):
If we read the art 7c, if a negotaiton bank its acting on its nomination, will be entitled to be reimbursement, it is only to remark that the issuing bank has to reimburse said bank even if documents are lost in transit(art 35). The beneficiary obligations will end on presentation of documents to a nominated bank, that may or may not advance its own funds.
Other comments appreciated
Ciao