PARTIAL PAYMENT ON DISCREPANT DOCUMENTS PARTIAL PAYMENT ON DISCREPANT DOCUMENTS Can an issuing bank pay only part of a discrepant presentation based on the applicant’s instructions? In documentary credit practice, situations sometimes arise where the applicant is willing to accept discrepant documents, but only on condition that the beneficiary agrees to a reduction in payment. This usually happens when market conditions have changed and … Read More
WHETHER THE ISSUING BANK CAN PREPAY OR PURCHASE ITS OWN ACCEPTED DRAFT OR ITS OWN DEFERRED PAYMENT UNDERTAKING QUESTION Dear Mr. Old Man, Hope this mail finds you well. I have a question that needs your expertise clarification: Can the issuing bank prepay or purchase its own accepted draft or its own deferred payment undertaking under UCP 600 sub-article 12(b)? Thank you. Frank —— ANSWER Hi Frank, UCP 600 Article 12(b) permits a nominated bank that has accepted … Read More
NOTIFY PARTY ON BILL OF LADING QUESTION Dear Mr. Old Man, The Letter of Credit includes the following details: Field 50 (Applicant): AAA Company … Hong Kong Field 46A (Documents Required): … Full set of clean on board original ocean bill of lading made out to the order of ABC Bank Ltd, notify applicant, marked “freight prepaid”. … Field 47A (Additional Conditions): All documents must state … Read More
Whether container shipment must be evidenced explicitly by wording or if the container number alone suffices QUESTION Dear Sir Good Day! LC shows the below clause: SHIPMENT MUST BE EFFECTED INSIDE CONTAINERS AND B/L SHOULD EVIDENCE SO Is it enough if we show the Container Numbers Ex: CXHU4321079 without the wording “SHIPMENT IS EFFECTED INSIDE CONTAINERS”? If we don’t show the wording “SHIPMENT IS EFFECTED INSIDE CONTAINERS”, will it be a discrepancy? If not, please provide … Read More
The Use of “Issued or Endorsed” vs. “Made Out or Endorsed” in Bills of Lading under Letters of Credit” QUESTION Dear Mr. Old Man Hope you are doing well. I would like to seek your advice for the following: I am quite confused with “Issued or Endorsed” and “Made Out or Endorsed” both are the same meaning? One of my bank prefer the wording to mention as “made out or endorse”. I prefer to be mentioned “Issued or Endorsed” … Read More
DISCOUNTING VS. NEGOTIATION UNDER LCs: WHAT’S THE DIFFERENCE? QUESTION: What is the difference between discounting and negotiation in the context of letters of credit? Could you clarify? ——- ANSWER: Hi, Great question — it’s one that often comes up in trade finance. Under UCP 600, the term officially used is “negotiation”, not “discounting.” According to Article 2 of UCP 600, negotiation refers to: “The purchase by the … Read More
MỘT LỜI CÁM ƠN – NGÀN NIỀM VUI Thỉnh thoảng, Mr. Old Man nhận được những email cảm ơn từ những người chưa từng gặp mặt, ở tận đâu đó trên thế giới, chỉ vì đã giúp họ giải đáp các thắc mắc trong quá trình tác nghiệp thanh toán quốc tế và tài trợ thương mại, hoặc trong hành trình “vượt ải” kỳ thi CDCS – một … Read More
WHEN EXW MEETS BILL OF LADING: A LOVE STORY THAT SHOULDN’T EXIST (BUT SOMETIMES DOES) QUESTION Dear Mr. Old Man, I’ve come across a bit of a puzzler: The LC I’m handling shows the goods are sold on EXW (Ex Works) terms, yet it also calls for presentation of a Bill of Lading (BL). From what I understand, under EXW, the seller’s responsibility stops at their own doorstep—they’re not even obliged to load the goods. … Read More
EXPLANATION OF ISBP 821 PARAGRAPH C10 QUESTION Dear Mr. Old Man, I’m having trouble understanding ISBP C9, about additional charges and costs in the invoice. Could you kindly explain it? Regards, Siva —— ANSWER Hi Siva, I believe you’re referring to paragraph C10 in ISBP 821, not C9. (C9 in ISBP 745 was renumbered as C10 in the latest ISBP 821.) It reads: “Additional charges and … Read More
THE DIFERENCE BETWEEN UCP 600 SUB-ARTICLE 26 (c) and ISBP 821 PARAGRAPH D31 (a) QUESTION Dear Mr. Old Man, How are you? Hope you are well. I need your guidance and clarification for better understanding the difference between UCP 600 sub-article 26 (c) and ISBP 821 D31 (a) with regard to “charges additional to freight in transport document”. Regards Siva —– ANSWER Hi, UCP 600 sub-article 26(c) says“A transport document may bear a reference, by stamp … Read More