FULL SET LESS ONE ORIGINAL BL; CLAIMING DISSCREPANCY FEES AFTER REIMBURSEMENT

QUESTION

Dear Mr Old Man,

We would appreciate your comment to the following questions:

Question 1:
LC requires in F 46A: Full set less one original of bill of lading…
Does it comply with the LC requirement if the beneficiary presents two original bills of lading?

Question 2:
LC issued by Bank I states in Field 78 that the negotiating bank is required to send the documents to Bank I and claim reimbursement from Bank R that shall reimburse Bank N after 3 banking days from the date of receipt of the reimbursement claim.

Bank N sent the documents to Bank I and claimed reimbursement from Bank R as instructed. Bank N received reimbursement from Bank R without deduction of discrepancy. However, later Bank I sent Bank N an MT 791 advising of the dicrepancies and requesting Bank N to pay USD50 being the discrepancy fee.

I don’t understand why Bank I instructed Bank R to reimburse Bank N notwithstanding the discrepant documents and now it claimed discrepancy fees from Bank N.

Is Bank I correct?

Thank you.

BD
———————-

ANSWER

Hi,

Question 1:
Full set of bills of lading would consist of three original bills of lading. If the LC requires the presentation of full set less one original bill of lading and the bills of lading presented indicate the number of originals as 3/3, then the fact that the beneficiary presents 2 original bills of lading complies with the LC requirement.

By the way, when an LC requires presentation of less than a full set of original transport documents, (for example, “2/3 original bills of lading”) but does not provide any disposal instructions for the remaining original bill of lading, a presentation may include 3/3 original bills of lading (see para A29 (c) ISBP 745).

Question 2:
A negotiating bank should claim reimbursement from the reimbursing bank when it has negotiated complying documents. If the presented documents contain discrepancies, it should ask for the issuing bank’s approval and authorization to claim reimbursement from the reimbursing bank.

The reimbursing bank shall reimburse if the reimbursement claim complies with its reimbursement undertaking or with the issuing bank’s reimbursement authorization. It does not care whether the documents presented comply with the terms and conditions of the LC.

Back to your specific case. If the documents contain valid discrepancies, Bank I is entitled to claim discrepancy fees from Bank N. In the worst scenario it may refuse and return the discrepant documents to Bank N. If this is the case, then Bank N must refund the reimbursement amount received from Bank R.

It was fortunate for Bank N that Bank I just claimed for discrepancy fees only.

Best regards,

Mr. Old Man