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Is it mandatory to contact beneficiary before to add confirmation to the LC , if LC states charges are on beneficiary account and Field 49a:CONFIRMATION, and if it true then, How is it differ from MAY ADD LC.

Thanks &Regards,
Dinesh kumar

Hi Pal,

it is advisable, but not mandatory. A part major banks, the issuing bank should contact the future confirming bank and deal about it. Probably beneficiary signed a contract with buyer asking for a confirmed l/c as mean of payment, excluding or including confirmation charges. In my experience only few beneficiaries wanted confirmation due to huge costs, except for risky Countries. Many banks ask for cover to the italian ECA: Sace.
Other comments appreciated
Ciao

If field No-49 of the LC : Confirm and field No. 71 B is saying “the confirmation charges are on account of Beneficiary”. In this case either the advising bank will contact to the beneficiary or the beneficiary has to request in writing to the advising bank or any suitable bank for adding the confirmation. (in this case, confirmation charges has to finalize between bank and the beneficiary)

If field No-49 of the LC : May Add and field No. 71 B is saying “the confirmation charges are on account of beneficiary”. In this case either the advising bank will contact to the beneficiary or the beneficiary has to request in writing to the advising bank or any suitable bank for adding the confirmation. (Confirmation charges on A/C of Beneficiary if confirmation required). After adding confirmation of the LC the filed will change as “ Confirm”.