In cross-border payments, one recurring issue is whether receiving banks should credit funds solely based on the account number in the payment order, or whether they must also verify that the beneficiary name matches the account holder. Practices differ across countries, and the consequences are serious — especially in fraud cases. QUESTION Dear Mr. Old Man, In Korea, before remittances …

Letters of credit (LCs) can sometimes feel like a maze of terminology. Among the first distinctions every LC learner comes across is between a confirmed LC and an unconfirmed LC. The difference may sound simple, but it has big implications for the beneficiary’s security of payment. Many students also wonder if the advising bank is always the one confirming the …

When applicants ask for “special clauses” in their credits, bankers often face a balancing act: accommodating commercial realities while safeguarding the credit’s integrity. Some requests are harmless, some are risky, and a few are downright dangerous. A reader from the Middle East recently sent me a list of such clauses proposed by his customer, asking which ones can be accepted, …

In documentary credit practice, it is not uncommon to see situations where the same party appears in more than one capacity on a bill of lading. A recent reader raised the question whether a seller under an LC (the beneficiary) could also act as the shipper and at the same time sign the bill of lading as agent for the …

One of the quirks of transport documents under a letter of credit is that the same party may sometimes wear two hats — appearing as shipper of the goods and also signing the bill of lading as agent for the carrier. Does this raise a red flag under UCP 600? A reader recently asked for clarification. QUESTION Dear Mr. Old …

Intro Sub-article 31(b) of UCP 600 often puzzles practitioners. On the one hand, it explains when multiple transport documents are not to be treated as partial shipments; on the other, it raises the practical question: how can the same ship and the same voyage end up with more than one set of bills of lading? Let’s unpack both sides. QUESTION …

Sometimes, beneficiaries get tripped up when an LC calls for documents “per order” in some cases and “per container” in others. It raises the question: if two containers are shipped under one purchase order, does that mean two complete sets of documents are required? A reader recently wrote in with this exact dilemma. QUESTION Dear Old Man, We have met …

Intro Letters of credit sometimes use broad geographical terms like “any Chinese port.” That sounds simple, but in practice it raises tricky questions—especially when ports like Hong Kong, Macao, or Kaohsiung are involved. ICC has clarified part of this, but not everything. Here’s how to understand it from an LC practice perspective. QUESTION Dear Mr. Old Man, As far as …

Intro In trade finance, one of the most important principles under UCP 600 is that a credit is independent from the underlying contract of sale or any other agreement on which it may be based. Yet, in practice, many credits do contain references to external contracts. A reader recently asked whether such references affect a confirming bank’s willingness to add …

Intro One area that often causes confusion in practice is the relationship between the issuing bank’s reimbursement obligation to a nominated bank and its payment obligation to the beneficiary. Sub-article 7(c) of UCP 600 deals with this precise point. A reader recently asked for clarification, and here’s how I explained it. QUESTION Dear Mr. Old Man, Please clarify sub-article 7(c) …