DISCREPANT DOCUMENTS SENT ON APPROVAL BASIS

QUERY
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From: Khang Nguyen []Sent: Tue 6/15/2010 8:48 PM
To: Nguyen Huu Duc (DNG)
Subject: chung tu Lc chuyen qua nho thu

Anh Duc oi, neu bo chung tu LC co sai sot ma chuyen qua xu ly theo nho thu co duoc khong anh? Neu ngan hang phat hanh, nguoi thu huong dong y chuyen qua nho thu nhung khong ghi ro la tuan theo URC 522, thi phai ap dung quy dinh nao de xu ly chung tu?

Xin loi vi co lam phien anh, em co hoi 1 vai nguoi (voi kha nang co the) nhung ho khong tra loi dc.

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COMMENT
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From: Nguyen Huu Duc (DNG)
Sent: Wed 6/16/2010 4:13 PM
To: Khang Nguyen
Subject: RE: chung tu Lc chuyen qua nho thu

Hi,

Được nhưng không nên.

Lý do: Khi chuyển qua xử lý nhờ thu theo URC 522, trách nhiệm của NHPH không còn nữa.

Do vậy, hãy xử lý theo một trong hai cách sau:

1) Gửi chứng từ đến NHPH đòi tiền như trong trường hợp chứng từ phù hợp, không cần xác nhận chứng từ phù hợp hoặc sai sót.
2) Gửi chứng từ đòi tiền trên cơ sở approval, tức là có nêu sai sót và đề nghị NHPH chấp nhận.

Tham khảo comment dưới đây của Mr. Old Man để hiểu thêm về vấn đề này:

UNDER RESERVE Vs ON APPROVAL BASIS
Tuesday, 16. March 2010, 07:33:47
under-reserve-vs-on-approval-basis

QUERY FROM AJIT

What is the difference between "Under Reserve" and "On Approval Basis"? Are both same? At our end, if docs. need to be forwarded under reserve, we do not scrutinise the documents as per LC terms but forward them to issuing bank for examination as per LC. If docs. need to be forwarded on Approval Basis, then we list all discrepancies on Remittance Letter and seek approval from issuing bank. Is our understanding correct?

Regards, Ajit

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COMMENT FROM MR. OLD MAN

Under Reserve vs On Approval Basis

Dear Ajit,

Under Reserve Vs. On Approval Basis

“Under reserve” is normally used in connection with negotiation. If the documents are found to contain discrepancies, the negotiating bank may negotiate (them) under reserve against a letter of indemnity from the beneficiary. “Under reserve” means that if the issuing bank refuses to take up the discrepant documents and eventually refuses to reimburse, the beneficiary must reimburse the negotiating bank the advance.

The phrase “on approval basis” is normally used in the event the documents presented by the beneficiary are found to contain discrepancies and the beneficiary’s bank forwards the discrepant documents to the issuing bank for approval and payment. Sometimes the terms “in trust” or “on collection” are used instead of “on approval basis”. However, please note that the term “on collection” may lead to misunderstandings that the presentation is subject to URC 522 whereas the documents in fact are still under the protection of UCP. It is, therefore, advisable to use the following phrase “The documents are presented for payment against the DC under UCP 600” to avoid the said misunderstandings.

In practice, some banks that forward the discrepant documents to issuing banks for payment neither state if the documents are discrepant nor list their discrepancies.

Best regards,

Nguyen Huu Duc

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