100% Advance Payment LC

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DarkKnight
Posts: 20
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First Name: Saif
Last Name: Ali
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Location: Kuwait

100% Advance Payment LC

Post by DarkKnight » Sun Mar 06, 2022 6:36 pm

Dear All,

I am the beneficiary and have received a draft LC issued from a bank in Egypt with 100% Advance Payment against beneficiary's acceptance of LC terms and conditions. Is this acceptable?

100 PCT OF LC AMOUNT TO BE PAID TO BENF'S AS ADVANCE PAYMENT VALUE 7 WORKING DAYS FROM YOUR TERSTED MSSG.STATING
THAT BENF HAS RECIEVED AND ACCEPTED L/C TERMS AND CONDITIONS.

Need both beneficary and bankers perspective.

Your valuable comments will be appreciated.

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picant
Posts: 1989
Joined: Wed Aug 20, 2008 1:49 pm

Re: 100% Advance Payment LC

Post by picant » Sun Mar 06, 2022 7:20 pm

Hi Pal,

from beneficiary's point of view it is ok, after checking the l.c terms and condition ,the beneficiary gets the money and than will send the goods to applicant and present documents in availment of l.c.
Issuing bank may grant this facility under a deposit of money or as credit line without considering the goods control.
Beneficiry's bank will give money after getting funds from issuing bank.
Applicant has a full risk and frankly I know that Egypt has restrictions and hampers in import, but this may not the case.
A correct knowledge of the parties is advisable!!!
Red Claused l-c is used with a long and trustworth business relationship.
Other comments appreciated

FanTrade
Posts: 5
Joined: Thu Oct 28, 2021 4:29 am
First Name: Lica
Last Name: Mauer
Organization: Bank
Filter: Two Plus Two =: 4
Location: Bucharest

Re: 100% Advance Payment LC

Post by FanTrade » Tue Apr 19, 2022 6:57 pm

It depends... What are the terms and conditions the beneficiary must adhere to so that he may get paid? Maybe some of the conditions talk about a presentation of documents?

jinugu
Posts: 13
Joined: Sun Sep 14, 2008 2:40 pm

Re: 100% Advance Payment LC

Post by jinugu » Sun May 01, 2022 3:46 pm

Hi from beneficiary perspective it's an advance payment.
Again, really need to see the LC to comment. Exchange control regulations and other local regulations could necessitate such a requirement. From my knowledge Egypt central Bank has announced some changes 6in the recent past. Jinugu

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