Uncategorized DISCOUNT UNDER TRANSFERRED CREDIT By Mr Old Man Posted on March 5, 2010 2 min read 2 0 2,667 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr QUERY Hi; As per sub-article 38-j of UCP 600 it is possible to make the transferred credit available at the place to which a documentary credit is transferred. Sub-article 12-b of UCP 600 provides for discount authorization simply by the issuing bank nominating a bank to accept a draft or incur a deferred payment undertaking. Taking into consideration of the above sub-articles and sub-articles 7-c and 8-c of UCP 600, could you please provide me with your comments for the below detailed issue: Under a confirmed transferable credit, the confirming transferring bank has transferred the credit to the 2nd beneficiary by making the credit available with the 2nd beneficiary’s local bank. Does the 2nd beneficiary’s local bank has the right to prepay or purcahse a draft accepted by it or a deferred payment undertaking incurred by it on “without recourse” basis under the protection of UCP? I am waiting for your comments… ——————– ANSWER Hi, The second beneficiary’s bank is the bank nominated under the transferred L/C to accept a draft or incur a deferred payment undertaking, hence, in accordance with Article 12 (b) it may, at its own option, discount its own deferred payment undertaking or acceptance on without recourse basis. Best regards,N.H.Duc …
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
CAN THE ISUING BANK CITE “LATE PRESENTATION” AS A DISCREPANCY SOLELY BASED ON THE DATE OF THE COVER LETTER?
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
CAN THE ISUING BANK CITE “LATE PRESENTATION” AS A DISCREPANCY SOLELY BASED ON THE DATE OF THE COVER LETTER?