CAN THE APPLICANT CHANGE THE BENEFICIARY’S ADDRESS AS PER THE BENEFICIARY’S STAMP ON THE PROFORMA INVOICE?

QUESTION

Dear Sir,

The beneficiary’s address on the proforma invoice is slightly different from the stamp of beneficiary on it. So, the applicant wants to change the address as per stamp.

Is this allowed?

Regards

Jawad

Askari Bank Pakistan.

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ANSWER

Hi,

LC would be issued based on the contract or proforma invoice provided by the applicant. However, LC by its nature is a separate transaction from contract/proforma invoice based on which it may be based. Banks will examine documents against the LC terms and conditions, not the contract/proforma invoice.

So, the applicant can change the address as per stamp.

However, if being not sure which address is correct, the applicant should contact the beneficiary for confirmation of the correct address.

When the applicant changes the beneficiary’s address as per the stamp and such change is specified in the LC, the beneficiary must prepare documents stating the beneficiary’s address (if necessary) as specified in the LC.

NOT ONLY ADDRESS BUT ALSO …

Practice shows that LC can sometimes be considered as a contract amendment. Accordingly, if the signed contract has errors, even terms and conditions that the applicant finds disadvantageous to him, he can change them when requesting his bank to issue the LC.

For example:

The contract for importing urea fertilizer stipulates that the latest shipment date is 30 May 2025 while domestic farmers need urea fertilizer in March 2025 to serve the spring-summer rice crop. If the LC stipulates as in the contract, the seller may ship the goods in May 2025, which may cause the applicant to suffer a loss because the goods cannot be sold.

In this case, when requesting the bank to issue LC, the applicant may change the latest shipment date to an earlier date, for example, 15 March 2025. If the beneficiary finds that he can make shipment within the time specified by the LC, he usually does not object to this change. The contract can then be amended as LC if necessary.

Best regards,

Mr. Old Man