CAN THE ISSUING BANK REFUSE TO HONOUR THE CONFIRMING BANK IF IT FINDS THAT THE DOCUMENTS PRESENTED CONTAIN DISCREPANCIES? QUESTION Dear Mr. Old Man, Would appreciate your feedback on the following: Issuing bank issues an LC which is confirmed by the nominated bank. In field 78 issuing bank has stated that payment in favour of the confirming bank will be affected 4 bank working days from the date of the confirming bank’s swift to the issuing bank stating that … Read More
SHORT SHIPMENT OR PARTIAL SHIPMENT? Actually, this is not a Q&A but rather a discussion between me and Bogdan, a trade finance expert I have known since we were both editors of LC Monitor (Trade Services Update) 15 years ago. However, the interesting thing is that it was only now that Bogdan discovered that I am also known as Mr. Old Man, when he searched … Read More
CAN THE APPLICANT CHANGE THE BENEFICIARY’S ADDRESS AS PER THE BENEFICIARY’S STAMP ON THE PROFORMA INVOICE? Can the Applicant Change the Beneficiary’s Address Based on a Stamp on the Proforma Invoice? In day-to-day LC practice, small details such as names and addresses often cause uncertainty. A common question is whether the applicant may adjust the beneficiary’s address when issuing the LC, especially when documents like a proforma invoice show slightly different versions of the address. The … Read More
ORIGINAL BILLS OF LADING MUST INDICATE NUMBER OF ORIGINALS ISSUED QUESTION Dear Mr. Old Man, The beneficiary provides a draft bill of lading to his bank for checking before the shipping line issues the original bill of lading. The draft bill of lading shows “No of Copies: THREE (3)” (see attachment). The bank notes that the words “No of Copies” should be changed to “Number of Originals”. Do you think … Read More
LETTERS OF CREDIT V. CONTRACTS QUESTION Dear Sir, As always, your help is really appreciated. Need your expert opinion on the scenario below: There is a change in the unit price of a product in the presented original documents which is more/less than the actual price mentioned in the Letter of credit. However, the Proforma invoice indicates that the rate could change on the basis … Read More
INSURANCE CERTIFICATE COVERING ALL RISKS AND WAR RISK CONTAINS INSTITUTE WAR CANCELLATION CLAUSE Special Q&A with comments from TSU editors who are international experts on letters of credit. It may be published in the next issue of LC Monitor/Trade Services Update. QUESTION Dear Mr. Old Man, This is Phoebe. I’ve been your follower since 2021 when I started to work in the import-export industry, and firstly I’d like to say thank you for … Read More
WHEN DOES A CONFIRMING BANK INSIST ON INCLUDING A REIMBURSING BANK IN AN LC? Intro From time to time, confirming banks request that an LC be amended to nominate a reimbursing bank, or even to obtain a reimbursement undertaking. A reader recently asked whether this practice is supported by ICC rules, or whether it is simply a matter of banking practice and risk management. It is a good question, because many practitioners assume that … Read More
WHEN DOCUMENTS ARE PRESENTED AFTER THE LC EXPIRY DATE QUESTION Dear Mr. Old Man, I have a question as follows: Is there any ICC opinion on the situation where the issuing bank can return the documents on the grounds that the documents are presented after the LC expiry date? If the Applicant has received the goods, is the issuing bank obliged to pay the documents? Is there a case … Read More
CAN AN LC AVAILABLE BY NEGOTIATION BE ISSUED WITHOUT REQUIRING PRESENTATION OF DRAFTS? QUESTION Dear Sir, This is Jawad from Askari Bank Pakistan. Please answer my question below: We issued LC available by negotiation and we did not include “All drafts” clause in 47A. Applicant has requested for Amendment in LC today and wants to add Clause in field 47 as below: ‘Drafts / bill of exchange not required.’ Please suggest if we … Read More
IS IT A DISCREPANCY IF ICE NUMBER NOT REQUIRED BY THE LC IS ADDED TO THE ADDRESS AND CONTACT DETAILS OF THE NOTIFY PARTY ON THE BILL OF LADING? QUESTION Dear Sir We have an LC showing Applicant Name and Address without the ICE NUMBER: 001343300000073. The BL shows this ICE Number: 001343300000073 in Notify Party. Will this be a Discrepancy? Also, if this is not a discrepancy, can you quote the Clause from ISBP proving this. Regards C.R. Nishanth —- ANSWER Hi, According to UCP 600 sub-article 14 (j), … Read More