Article 35 UCP 600 Does Not Apply to an L/C Available with the Issuing Bank by Payment, Deferred Payment, or Acceptance   INTRODUCTION From time to time, LC practitioners raise concerns about what happens if documents are lost in transit between banks. Article 35 of UCP 600 seems to provide clear protection — but when and to whom does that …

Insurance documents under a Letter of Credit can be tricky — especially when the LC calls for a document “in negotiable form” or “issued to the order of” a bank. What exactly does “negotiable form” mean? When is an endorsement required? And what happens if the LC doesn’t specify who the insured party should be? Below is a detailed question …

INTRO At first glance, it may sound reasonable to make a usance LC “available with any bank.” After all, the more flexibility for the beneficiary, the better—right? But in practice, things are rarely that simple. Under UCP 600, a nominated bank has no obligation to act unless it agrees to do so. That small detail makes all the difference, as …

In documentary collections, banks usually handle the remittance of funds and documents — but does it have to be a bank? What if a finance company steps in to manage the process? Let’s look at how a finance company can act as a remitting bank and how payment can still flow smoothly, even without its own nostro account. Question Dear …

Sometimes, a little phrase like “on behalf of” saves a lot of trouble — as long as it clearly links back to the beneficiary named in the credit. Here’s a case where the bill of lading shows the shipper acting on behalf of the beneficiary. Is that acceptable? _______ Question Dear Mr. Old Man, The LC states that the shipper …

Intro A seemingly small issue, yet one that often stirs debates among LC practitioners: Can a bill of lading and its attached page — signed by different offices of the same carrier — still be accepted under the LC?  Here’s what Mr. Old Man thinks. _____ QUESTION Dear Mr. Old Man, The LC calls for a bill of lading. The …

(A question that often pops up over coffee among trade bankers) Sometimes in LC discussions, what seems like a simple question turns out to be surprisingly layered. A friend recently asked whether an advising bank can discount a deferred payment under a confirmed LC, when the confirmation was added by another bank. At first glance, you might think, “Why not?” …

From time to time, I receive interesting questions from trade professionals that touch on both the letter and the spirit of UCP 600. Here’s one from Mr. C.R. Nishanth about a Certificate of Origin clause that uses the term “legal competent authority.” __________ QUESTION Dear Sir, How’s it going? I have the below clause mentioned in the Letter of Credit: …

Every now and then, exporters face a tricky situation — two letters of credit, same buyer, same goods, same vessel, and the urge to save time by presenting one combined set of documents. Sounds harmless enough, right? Not quite. What looks like a paperwork shortcut can easily turn into a “combined drawing” discrepancy — a frequent headache for both beneficiaries …

Intro  Our friend Thomas from a Korean bank brought up two rather unusual LC situations that would make even the most seasoned trade finance professional pause for a sip of coffee.  In the first, the confirming bank adds its confirmation but signs a side agreement with the beneficiary — allowing recourse if the issuing bank refuses payment due to discrepancies. …