ADVISING OF CREDITS AND AMENDMENTS

QUERY FROM WARLORD9609

I have a nice Export LC case which I would like to share with you.

This LC issued in country S by Bank A and advised it to Bank B in country Y via swift.
Bank B advised the LC to us in country Y(we are advise through bank) in hard copy even though we have RMA (this is not the case).
LC available with Bank B and Drawee Bank Field shows the wording as 'confirming Bank'.

Confirmation instruction ' Confirm'

Our client was trying to get confirmation through bank B, but they have declined, until this moment the total advised amendments are 2 amendments(LC+2 amendments).

Now our client found a bank which will add confirmation to the LC, Its bank C, my client said to me that this bank will confirm the LC.

Now until this moment, the client has the Original LC and 2 amendments in his possession because we are as advise through bank and our job to advise anything to them.

Last Sunday we received amendment number 3 through bank B as usual, the amendment states that the LC is now to be available with bank C, this amendment is still under our custody, and I will give it to the customer next Monday, this amendment will remove Bank B from the story of the LC, which means any future amendments will be transmitted to us (the advise through Bank)through bank C(the new advising Bank/Receiver of MT700).

That day, I have called Bank C regarding the amendment number 3 and that it contains their name as available with Bank, they said yes coz we as Bank C will add confirmation as per the client request , but they(Bank C) ordered me to send all the originals to them (Hard copy of LC and amendments), this process means I have to collect the whole LC set from the beneficiary (original LC+2 amendments) and amendment number 3 in our custody in which all to be sent to Bank C under our Bank covering letter, is this correct ? Or do they need the originals because they will add confirmation.

What is the meaning of this, we are advise through Bank, why we send to them the whole set, I said to myself maybe they want to collect it from us and then send us again all incorporated in one LC through MT710, I don’t know what is the correct procedure, please tell me what is the correct process here.

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COMMENT

Hi Warlord9609,

1) It is understood from your description that Bank B is the first advising bank and that your bank is acting as the second advising bank.
Based on UCP 600 sub-article 9 (d), which says that “A bank utilizing the services of an advising bank or second advising bank to advise a credit must use the same bank to advise any amendment thereto”, I think future amendments (if any) should be continued to be advised by Bank B to the beneficiary through your bank.

2) The fact that the LC is available with a certain bank does not always mean that the LC and amendments (if any) must be advised through that bank unless that bank is a NOMINATED confirming bank.

I see from your description that the issuing bank does not nominate Bank C as a confirming bank or instruct your bank to advise the LC and all amendments to the beneficiary through Bank C. So your bank is not obligated to collect the original LC and amendments from the beneficiary and then advise them through Bank C.

Regards,
Mr. Old Man …