QUESTION
Dear Mr. Old Man,
1) Can the beneficiary present the documents to the nominated bank with instruction that payment is to be paid to another party?
2) If yes, how can we incorporate this clause into the LC?
Thank you.
Regards,
BD
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ANSWER
Hi,
1) Yes. The beneficiary can assign any proceeds to which it may be entitled under the LC in accordance with the provisions of applicable law (see Article 39 UCP 600). It can instruct the nominated bank to pay the proceeds under the LC to the assigned party. However, whether the assigned party will receive the proceeds in foreign currency or in local currency depends on the provisions of the foreign exchange control regulations of its country.
2) No. This should be done outside the LC and in the above way.
Kind regards,
Mr. Old Man
