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WHETHER DOCUMENTS CAN BE PRESENTED DIRECTLY TO THE ISSUING BANK

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QUESTION

Dear Mr. Old Man,

LC states:

Field 41D: AVAILABLE WITH WITH BANK N BY NEGOTIATION

The beneficiary presents the documents to our bank. Should our bank forward the documents directly to the issuing bank or BANK N?

Further information: Beneficiary, BANK N and our bank are domiciled in the same country.

Thank you in advance.

Best regards,
TD
————–

ANSWER

Hi,

If the beneficiary does not intend to negotiate the documents with BANK N and/or BANK N does not agree to act on its nomination, according to Article 6 UCP 600, which says “a credit available with a nominated bank is also available with the issuing bank”, your bank can forward the documents directly to the issuing bank bypassing the nominated bank – BANK N.

Please note that your bank in this case is not a nominated negotiating bank but a presenting bank making presentation to the issuing bank on behalf of the beneficiary.

Kind regards,
Mr. Old Man

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24 Comments

  1. akieri

    December 5, 2013 at 10:12 pm

    Hi Mr old Man,Em lại có một số điều thắc mắc muốn nhờ anh giải đáp như sau: Theo quy định của UCP 600 Thì có phải mô tả hàng hoá trên L/C luôn luôn phải giống hệt với mô tả hàng hoá trên hoá đơn thương mại? Em thấy bản tiếng anh của UCP 600 tại điều 18c có dùng từ "correspond" để nói về điều này nhưng em thực sự chưa hiểu rõ thế nào là 'correspond" nhờ anh giải thích dùm ạ.Giả sử có tình huống như thế này: L/c quy định hàng hoá là "chicken legs and sub-products" nhưng khi xuất trình chứng từ hoá đơn lại ghi là "chicken legs" thội trong trường hợp này nên chấp nhận hay từ chối bộ chứng từ ? và tại sao? căn cứ vào đâu?

    Reply

  2. mroldmanvcb

    December 6, 2013 at 2:12 pm

    Mô tả hàng hóa trên chứng từ không nhất thiết phải gióng hết như soi gương nhưng không được mâu thuẫn với chứng từ khác hoặc thiếu những thông tin nêu trong LC. Trường hợp của bạn, hóa đơn gghi là "chicken legs" trong khi LC quy định là "chicken legs and sub-products" xem như không phù hợp.

    Reply

  3. anonymous

    December 9, 2013 at 11:12 pm

    KM writes:HI SirMy bank is acting as a presenting bank and since courier the docs to bank A(credit available with Bank A by nego) it has since passed more than 8 banking days since they received docs but we have yet to receive any payment nor response from them. We called them a few days back to check on the status and they said tat they have not added their confirmation to the credit and had also forward docs to IB for payment. My qn, can the nominated bank just fwd docs for payment? We might only be the presenting bank but does nominated bank can just ignore us? Ie do not pay us / dispute after 5 banking days? Since we did not nego the docs, can we claim late payment interest from them?Thanks for ur time.

    Reply

  4. anonymous

    December 10, 2013 at 2:12 pm

    Anonymous writes:In the time waiting for professional opinion from Mr Old Man:In the case of KM, I think that unless your bank added confirmation, they would not have any obligation to negotiate and make payment for you (as per the Article 12 UCP600). As the current situation, they are acting as a presenting bank only and the obligation of payment solely is of IB which included late pymt interest if any!

    Reply

  5. mroldmanvcb

    December 10, 2013 at 5:12 pm

    Bank A refuses to act on its nomination, i.e., refuses to negotiate the documents. By forwarding the documents without negotiation to the issuing bank, Bank A is deemed not to act on its nomination. In this case, like your bank, it is acting as a presenting bank only.Agreed that late payment interest if any shall be borne by IB.

    Reply

  6. anonymous

    December 10, 2013 at 10:12 pm

    Anonymous writes:Cảm ơn anh rất nhiều!

    Reply

  7. anonymous

    December 15, 2013 at 12:12 pm

    Anonyme writes:Dear Mr. Old Man,I have below question:1. In LC it requires that BL must show shipping agent details in Vietnam, but our original BL shows that "discharge port agent" instead of showing the words "shipping agent details in Vietnam", SO, will the issuing bank consider it as discrepancy?2. In LC it show contract no. "TS-VA-01.14", but our documents show that "TS-VA-01/14". The only difference here is the mark '.' and '/'. So, will the bank consider it as discreppancy? Please help us these questions. Thank you.Best regards,

    Reply

  8. mroldmanvcb

    December 15, 2013 at 10:12 pm

    1) NO if the discharge port is a port in VN.2) No.

    Reply

  9. anonymous

    December 16, 2013 at 2:12 pm

    Anonyme writes:Thank you, Mr. Old Man !I have one more question: according to LC, payment terms is draft at 90 days after B/L date. But our commercial invoice does not show that (90 days after B/L date). So, is it ok to present this doc to the issuing bank? I know that Draft must be issued for each shipment and is sent along with other docs to the issuing bank and on the Draft, it must show payment term.

    Reply

  10. mroldmanvcb

    December 16, 2013 at 4:12 pm

    There's no need for invoice to show payment term. Draft is to indicate the paymentterm, for example, 90 days after BL date 16 December, 2013.

    Reply

  11. Stephania

    April 25, 2016 at 5:12 pm

    Hello mr old man , Thank you for sharing your knowledge and experiences . How can I submit a question ??

    Reply

    • mroldman

      April 26, 2016 at 10:51 am

      Hi Stephania,

      Your question may be posted under my related post or sent to my email nhduc.dng@gmail.com

      Welcome always!

      Mr. Old Man

      Reply

  12. kodi

    May 12, 2016 at 9:34 pm

    Dear Mr. Old Man,

    So far I have thought, documents should be presented to either nominated bank or issuing bank including drafts if any.

    But I have read some of your articles regarding presentation from which I understood
    documents can also be presented to even advising bank while nominated and advising banks are different.

    1.Is it correct?Can I present to either advising or nominated or issuing bank if credit
    is restrictively available with?
    2.Should the drafts be presented to ONLY reimbursing bank separately If credit requires draft?
    3. If credit is available with ANY BANK by negotiation/payment/acceptance, can I present it to any bank in the world?

    Thank you in advance sparing your time for my questions.

    Regards,
    Kodi

    Reply

    • mroldman

      May 13, 2016 at 5:33 pm

      Hi,

      1. If LC is available restrictedly with a named bank by negotiation, the beneficiary may present the documents
      (i) to the named nominated bank for negotiation; or
      (ii) directly to the issuing bank (bypassing the nominated bank) for payment. The documents must be received by the issuing bank on or before the expiry date.
      If the beneficiary presents the documents to the advising bank which is not the nominated bank, the advising bank in this case is acting as the presenter which makes presentation to the nominated bank or the issuing bank on behalf of the beneficiary. The documents must be received by the issuing bank on or before the expiry date.

      2. Where a draft is drawn on reimbursing bank, the negotiating bank/paying bank is instructed to forward the draft to the reimbursing bank for reimbursement and forward the documents to the issuing bank.

      3. The place of availability and the place of expiry should match. If the LC states it that is available with any bank by negotiation and that the place of expiry is in the the beneficiary’s country, the beneficiary should present the documents to a bank in his country. Notwithstanding this fact, where the LC states it is available with any bank without indication of a location, the beneficiary may present the documents to any bank in the world provided it is made on or before. So, if the issuing bank expects the presentation is made to the bank in the beneficiary’s country, it may stipulate that LC is available with any bank in the beneficiary’s country.

      Kind regards,
      Mr. Old Man

      Reply

  13. Anna

    October 3, 2016 at 8:52 am

    Em nhờ anh giúp e một trương hợp này ạ:
    Ngân hàng SCLB Mỹ xuất trình tới NHPH, bộ chứng từ có sai sót trên P/L, NHPH đã từ chối đúng theo UCP 600.
    Khoảng 1 tháng sau, người hưởng lợi xuất trình trực tiếp P/L thay thế đến NHPH, không có điện gì từ ngân hàng SCBL mỹ về chứng từ thay thế. P/L xuất trình trong thời hạn hiệu lực LC , nhưng quá thơif hạn xuất trình chứng từ.
    Trường hợp này, NHPH phải làm gì ạ?
    Rất mong sớm nhận được câu trả lời của anh. Cảm ơn anh.

    Reply

    • mroldman

      October 3, 2016 at 9:39 am

      Theo quy định thì Ben có thể xuất trình chứng từ trực tiếp đến NHPH nhưng trong trường hợp mô tả vì Ben đã xuất trình thông qua SCLB nên chứng từ thay thế cần được xuất trình qua SBLC. UCP không có quy định về trường hợp này nhưng bạn có thể bắt lỗi late presentation đối với PL đó.

      Reply

      • Anna

        October 3, 2016 at 1:46 pm

        Nếu mình bắt lỗi thì nghĩa là mình coi việc xuất trình thay thế là từ ngân hàng SCBL đung không ạ?

        Em có đọc qua một ICC opinion về việc xuất trình chứng từ thay thế, thì trong đó nói Bene có thời gian đến hết thời hạn hiệu lực của Lc để sửa chữa và thay thế chứng từ. Nhưng sau đó lại đề cập đến việc xuất trình lại phải trong thời hạn hiệu lực hoăc thời hạn xuất trình chứng từ. (Chỗ này em hơi bối rối không biết nên hiểu sao)
        Vậy, liệu mình có bắt được lỗi “late presentation” trong trường hợp này không ạ?

        Mong được anh tháo gỡ!

        Reply

        • mroldman

          October 3, 2016 at 2:54 pm

          Bạn có thể bắt lỗi Late presentation

          Reply

  14. Karim

    April 13, 2017 at 10:45 pm

    Hi Mr OLD MAN
    May i ask you, why sometimes the receiver bank is another bank than the one of the exporter? on some LC that i see, the receing bank is the actual bank of the shipper, and in other LC the receiving bank is a different bank.
    I want to know how to avoid this because when there is a reserve in the documents, the issuing bank and the “intermediary” bank they both charge their fees, making it double that whatit should be.

    Thank you

    Reply

    • mroldman

      April 14, 2017 at 2:31 pm

      Hi,

      I would like to use the term “first advising bank” to refer to the receiving bank and “second advising bank” to refer to the bank that advises the L/C to the beneficiary and would be the bank of the beneficiary.

      Where the issuing bank has no correspondent relationship with the beneficiary’s bank, it would send the L/C to its correspondent bank (first advising bank) and instruct this bank to advise the L/C to the beneficiary via the beneficiary’s bank (second advising bank). If this is the case, the beneficiary must pay the first advising bank’s advising charge and the second advising bank’s advising charge. This is the commonest reason.

      Another reason (rarely) is that the issuing bank and one of the banks in the beneficiary’s country, say, Bank A, may have a rebate agreement that for every L/C advised through Bank A the issuing bank would receive a certain sum of money, say, USD15, and when Bank A receives the L/C it would advise directly to the beneficiary if the beneficiary maintains account with it. Bank A would advise the L/C to the beneficiary via the beneficiary’s bank.

      So, to avoid double advising charges, the beneficiary should insist the applicant to have the L/C issued by the bank that has correspondent relationship with the beneficiary’s bank. The beneficiary should approach his bank to know which banks in the applicant’s country it has maintained correspondent relationship.

      Kind regards,
      Mr. Old Man

      Reply

      • m3mpower

        April 15, 2017 at 2:24 pm

        Hi
        Mr Old Man, thank you for the explanation.
        When you say the LC will be sent to its correspondent bank, do you mean correspondent of issuing bank or correspondent of second advisory bank?
        Also, if the beneficiary’s bank has for example correspondence relationship with bank X in the issuing bank’s country, and the applicant’s Bank is bank Y, does that mean the applicant should open an account with bank X to avoid double fees to the beneficiary?
        It’s not simple to convince an applicant to have multiple bank accounts because also not all beneficiaries have the same banks so in the end there will always some beneficiary out of the correspondence list, is that correct?

        Regards

        Reply

  15. Muzammil Hayath

    August 20, 2017 at 9:52 pm

    dear Members, Can anyone translate in English,it could be great favour to me..Thank you… Việc chứng từ xuất trình phù hợp mà ngân hàng không thanh toán hoặc chỉ thanh toán một phần là không phù hợp với thông lệ quốc tế và quy định của UCP. Tuy nhiên, đây là vấn đề phụ thuộc vào luật địa phương mà có giá trị thi hành cao hơn UCP. Do vậy, khi nhận được lệnh của tòa án yêu cầu ngừng hoặc tạm hoãn thanh toán, ngân hàng phát hành có nghĩa vụ phải tuân theo.
    Ngân hàng phát hành, khi được yêu cầu, có trách nhiệm cung cấp cho ngân hàng xuất trình/người thụ hưởng bản sao lệnh ngừng thanh toán của tòa án. …

    Reply

    • mroldman

      August 21, 2017 at 9:53 am

      Here’s the translation of the paragraph:
      … The fact that the issuing bank does not effect payment or just pays a partial payment against complying presentation does not comply with international practices and the UCP. However, this is the matter of local law that prevails over the UCP, and therefore, upon receipt from the court of the court order/injunction that prevents the bank from temporarily effecting the payment, the issuing bank must abide by .
      When requested, the issuing bank should provide the presenting bank/beneficiary with the copy of the court injunction.

      Reply

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