CAN THE ISUING BANK INCLUDE REIMBURSEMENT AUTHORITY IN FIELD 78 UNDER A ‘MAY ADD’ LC? QUESTION Hi sir, Hope this mail finds you well. I wanted to confirm regarding an L/C that allows reimbursement authority under Field 49 marked as “MAY ADD.” Our bank maintains a Nostro account, and we usually issue MT740 to authorize the reimbursing bank to pay when claimed by the nominated or negotiating bank. Can we also add reimbursement authorization in … Read More
ORIGINAL ENOUGH? WHEN A COPY IS NOT A COPY QUESTION Dear Mr. Old Man, Seek your view on the below- LC calls for original survey report by SGS. The document presented is a photocopy in black and white with the word “ORIGINAL” stamped on it with red ink. The SGS signatures are also not original. LC does not require manual signature. Therefore, per UCP article 17 C iii, is it … Read More
DOES VOYAGE DESCRIPTION EQUAL INSURANCE COVERAGE SCOPE? QUESTION Hi Sir, Hope everything is going well. I wanted to highlight a confusion of mine its more of a silly question. The thing is in an insurance policy we need to know the overall coverage of the insurance from the place of loading the consignment to its ultimate destination. Sometimes we find the policy only mentions the actual voyage details only, … Read More
Q&A – Phát hành bảo lãnh quốc tế bằng ngoại tệ: Được hay không, và có trái ngoại hối không? QUESTION Chào Mr. Old Man, Nhờ Mr. Old Man giải đáp giúp 2 tình huống sau: 1. Ngân hàng trong nước có được phép phát hành bảo lãnh quốc tế bằng ngoại tệ cho doanh nghiệp Việt Nam để tham gia đấu thầu quốc tế không? 2. Ngân hàng trong nước có được phát hành bảo lãnh thay mặt cho … Read More
DISCOUNTING A DEFERRED PAYMENT UNDERTAKING QUESTION Dear Mr. Old Man, I have a question regarding the discounting of documents under a letter of credit. Normally, when discounting documents under an LC, banks require the presentation of a draft (bill of exchange) as a mandatory document. However, in the case of an LC available by deferred payment, where no draft is required, is it still necessary … Read More
CAN AN EXPIRED LETTER OF CREDIT BE AMENDED TO EXTEND THE EXPIRY DATE? Two little girls at Thanh Khe Beach QUESTION Dear Mr. Old Man, Can an expired letter of credit (LC) be amended to extend its expiry date? Is there any rule that explicitly prevents such an amendment? Thank you, P. ———- ANSWER Hi P., The short answer is: it depends. Under UCP 600, sub-article 10(a), a letter of credit—unless otherwise stipulated … Read More
ADVANCE PAYMENT & SBLC ANSWER Dear Mr. Old Man, Good day! The seller and the buyer agree to sign a sale contract with the following terms and conditions: The buyer will pay in advance the full contract value. The seller will effect shipment upon receipt of full payment from the buyer. Can the buyer request the seller to provide an SBLC to guarantee advance … Read More
DISCREPANCY ARISING FROM MISMATCH IN PAYMENT TERMS ON INVOICE vs. LC Champa Dancing Apsara Relief QUESTION Dear Sir, Sorry to bore you with this irrelevant question but just out of curiosity is there any importance of payment term mentioned in the commercial invoice. Because as per ISBP the invoice must portray the contents mentioned in the field 45a of the L/C. So, if the payment term as per credit is 180 days … Read More
UNDERSTANDING THE ROLE AND OBLIGATIONS OF A NOMINATED BANK UNDER A NEGOTIATION CREDIT QUESTION Dear Sir, If I receive a Letter of Credit (LC) advised to me with the clause “Available by negotiation at any bank; At Sight,” is my next step to ask my bank whether it will act as the negotiating bank, and request a written confirmation if it agrees? I understand that a nominated bank has no obligation to negotiate … Read More
WHERE THE PRESENTING/COLLECTING BANK DOES NOT ACT IN GOOD FAITH OR EXERCISE REASONABLE CARE QUESTION Dear Mr. Old Man, I have a case to seek your advice. Our bank has forwarded 6 sets of D/P(s) for USD525,000 to a bank in Egypt with the instructions “Release Documents against Payment”. After many payment tracers, the collecting bank replied that all sets of D/P have been released against 30 days, 60 days, 120 days…from health approval … Read More