QUERY
By Dholat on Thu Feb 05, 2009 11:36 pm
We issued an LC and request a bank in Germany to confirm it. The bank however refused to confirm and sent us a swift to this effect. On the same day we received another swift which says that they have advised the credit without confirming it. Later we negotiated with another bank to confirm the credit. But that bank demanded that any LC and amendment must be advised through them. Now has the LC been already advised, how we can change the advising bank? what can we do against the mistake of the 1st confirming bank in advising the LC, without confirming it, without taking our consent.
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COMMENT
By nhduc on Sat Feb 07, 2009 8:10 am
Hi,
If the beneficiary refuses to accept L/C without confirmation, he may return (or may be asked to return) the original L/C to the advising bank. The advising bank shall inform the issuing bank of the same. Then the issuing bank may:
(i) EITHER cancel the L/C and re-issue a new one to be advised to the beneficiary through the bank which has agreed to confirm the L/C;
(ii) OR issue an amendment to the L/C indicating that the L/C is to be advised to the beneficiary through the second advising bank (which has agreed to confirm the L/C).
Of course, the issuing bank/the applicant must incur charges payable to the first advising bank in connection with L/C amendment or cancellation.
Best regards,
Nguyen Huu Duc …
