MT 202 or MT 103 – A Case Study You Won’t Find in Textbooks In trade finance, life is rarely as straightforward as the manuals suggest. Real transactions often bring up situations that don’t quite fit the “standard” rules. One such puzzle is deciding whether an LC payment should go out via MT202 (bank-to-bank transfer) or MT103 (customer credit). The following Q&A, based on a real-life case in Vietnam, illustrates how to untangle this … Read More
Documents Presented Directly to the Issuing Bank – What Happens Next? Intro One common question in documentary credit practice is whether a beneficiary can bypass the nominated bank and present documents directly to the issuing bank. This situation often arises close to expiry dates, during holidays, or in domestic LCs. But once the documents land on the issuing bank’s desk, another set of questions follow: how does the issuing bank handle … Read More
Can a Bill of Lading Be Issued Outside the Country of Shipment? In documentary credit practice, a recurring question is whether a bill of lading must be issued at the port of loading or even in the country of shipment. With today’s centralized carrier systems and documentation hubs, the place of issuance may be far away from the actual port. But does this matter under UCP 600? Let’s see. ___ QUESTION Hi, … Read More
Invoice Higher than the LC Amount – Can the Bank Pay More? In documentary credit operations, one of the recurring issues is when the presented commercial invoice shows an amount higher than that permitted under the letter of credit. Should the bank pay the full invoice value or restrict payment to the LC amount? Sub-article 18(b) of UCP 600 provides important guidance in this regard. Question Dear Mr. Old Man, We appreciate … Read More
When “Better” Is Not Good Enough Intro In documentary credit practice, banks deal not with common sense but with strict compliance. Even if a document seems more reliable than what was asked for, the key question remains: does it match the LC conditions exactly? Question An L/C stated in Field 47A: “AT LEAST 14 DAYS DEMURRAGE AND DETENTION FREE AT DESTINATION TO BE CONFIRMED ON B/L … Read More
Issuance Dates of Documents under UCP 600: What Does Sub-article 14(i) Really Mean? In documentary credit practice, timing can make or break a presentation. One of the less talked-about rules in UCP 600 is sub-article 14(i), which deals with the issuance date of documents. Can a document be dated before the LC was even issued? And what happens if a document shows a date later than the day it was presented to the … Read More
Lời xin lỗi gửi anh Mark Anh Mark thân mến, Cách đây đúng 16 năm, Mr. Old Man đã lỡ viết một cái tút tuyên bố xanh rờn rằng sẽ “tạm biệt Facebook” nếu tìm được một “ngôi nhà” tốt hơn. Chắc hồi đó Facebook chưa xịn như bây giờ, nên Old Man mới dám buông lời “dọa dẫm” như vậy. Ấy thế mà 16 năm … Read More
Notify Party vs. Applicant’s Name and Address on a Bill of Lading Intro In documentary credit practice, it’s not unusual to see slight variations in how applicant details are reflected on a bill of lading. A common concern is whether the applicant’s name and address must appear separately, or if details shown in the notify party field are sufficient. Here’s a recent query Mr. Old Man received. ________ Question Dear Mr. Old … Read More
Sự cố chữ nghĩa: “Cựu người học” Sáng nay một người bạn gửi cho Mr. Old Man tấm ảnh backdrop kỷ niệm 40 năm của Trường Đại học Ngoại ngữ – ĐH Đà Nẵng, với dòng chữ nổi bật: “Ngày hội cựu người học”. Cụm từ “cựu người học” nghe thiệt lạ tai. Ngại dính tin pha-ke trên mang, Mr. Old Man nhờ ChatGPT kiểm tra lại … Read More
Where the Applicant Goes Bankrupt Bankruptcy of an LC applicant is one of those nightmare scenarios that beneficiaries and banks alike worry about. Does the issuing bank still have to pay if the applicant collapses before documents arrive? And if so, how can the bank protect itself? Let’s look at a real question I received and my response. __________ QUESTION Dear Mr. Old Man, First … Read More