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HOW TO PRESENT THE DOCUMENTS WHERE LC IS AVAILABLE WITH A NOMINATED BANK OUTSIDE THE BENEFICIARY’S COUNTRY

By Mr Old Man
Posted on December 19, 2016
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This place is called God’s Well. I came here with some of my biking friends with our bikes on the shoulders. Dare not come back here again!

QUESTION

Dear Mr Old Man,

We  received an L/C with the details as follows:

Sender: ABC Bank Singapore
Receiver: XYZ Bank Vietnam
Expiry date: 1/1/2017 in Vietnam
Available with ABC Bank Singapore by negotiation.

I see that L/C would be normally available with any bank in Vietnam or  with a named bank bank in Vietnam by negotiation. So, the beneficiary can present the documents to any bank or a named bank in Vietnam for negotiation. However, the L/C in this case is available with ABC Bank Singapore by negotiation. We do not know how to present the documents. Would you kindly clarify this matter for me?

Thank you so much!

T.T

———–

ANSWER

 

Hi,

I guess it is an MT710 (Advice of a Third Bank’s or Non-Bank’s Documentary Credit). This message is sent by an advising bank  which has received from the issuing bank or the non-bank issuer, to the bank  advising the beneficiary or another advising bank.

So, it is understood in this case that ABC Bank Singapore is acting both as the advising bank and as the nominated negotiating bank and that XYZ Bank Vietnam is acting as another advising bank.

The beneficiary may present the documents via a bank in Vietnam (e.g., XYZ Bank Vietnam) to ABC Bank Singapore for negotiation. The bank in Vietnam is acting as a presenter making the presentation on behalf of the beneficiary.

Kind regards,

Mr. Old Man

 

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10 Comments

10 Comments

  1. naima dakki

    December 19, 2016 at 5:50 pm

    Hi  Please i want your confirmation about the Language of the documents under an L/C As per the ISPB 2013 , the Informations only in the documents to be in the L/C language As i have some documents that include another language ( Arabic and its translation in English in the certificate Of Origin, The Name of the Company also in Arabic and its translation in English     ).So when the L/C is telling that documents must be entirely in English Language , only the Data thereon . only relates to the informationinserted into the document which proves the fulfillment ofthe terms and conditions of the L/C and the relevant articlesof the UCP600 Thank you

    Reply

    • mroldman

      December 19, 2016 at 8:21 pm

      Hi,

      I think ISBP 745 paragraph A21 is very clear about this issue. It is true that the requirement that documents must be issued in a certain language is in relation to the data only, i.e., only the data required by the L/C are to be in the required language.
      The name of a person or entity, any stamps, legalization, endorsements or similar, and the PRE-PRINTED TEXT shown on a document, such as, but not limited to, field headings, may be in a language other than that required in the L/C.

      Please refer to ISBP 745 paragraph A21

      Quote
      A21) a. When a credit stipulates the language of the documents to be presented, the data required by the credit or UCP 600 are to be in that language.
      b. When a credit is silent with respect to the language of the documents to be presented, the documents may be issued in any language.
      c. i. When a credit allows two or more acceptable languages, a confirming bank or a nominated bank acting on its nomination may restrict the number of acceptable languages as a condition of its engagement in the credit, and in such a case the data contained in the documents are only to be in the acceptable language or languages.
      ii. When a credit allows a document to contain data in two or more acceptable languages and a confirming bank or a nominated bank acting on its nomination does not restrict the language or the number of acceptable languages as a condition of its engagement in the credit, it is required to examine the data in all of the acceptable languages appearing in the documents.
      d. Banks do not examine data that have been inserted in a language that is additional to that required or allowed in the credit.
      e. Notwithstanding paragraphs A21) (a) and (d), the name of a person or entity, any stamps, legalization, endorsements or similar, and the pre-printed text shown on a document, such as, but not limited to, field headings, may be in a language other than that required in the credit.
      Unquote

      Kind regards,
      Mr. Old Man

      Reply

  2. Cheng Yam San

    December 19, 2016 at 8:06 pm

    Dear Mr Old Man

    I am wondering – the place of expiry of the LC is in Vietnam, but the nego bank is in Singapore. If LC is presented on the expiry date 1/1/2017 to the “presenting bank” in Vietnam, but reaches the nego bank the following day, is that considered compliant?

    Further, if the presenting bank is not the nego bank – and if docu goes missing after having been presented to the presenting bank but not received by the nego bank, I assume as bene, I take the risk?

    Thank you for advising.

    Reply

  3. Aline

    December 21, 2016 at 6:46 pm

    Lần đầu tiên em có 1 cái LC xuất khẩu nên lúng túng không biết nên làm gì, kiểm chứng từ thế nào. F46A qui định “PAYMENT WILL BE AVAILABLE BY THE BENEFICIARY’S DRAFT AT SIGHT FOR 95 PERCENT OF THE INVOICE AMOUNT WHEN ACCOMPANIED BY THE FOLLOWING DOCUMENTS….(yêu cầu 17 loại chứng từ khác nhau có DETAILED INVOICE in duplicate)” đồng thời F46A cũng nói “PAYMENT FOR THE REMAINING AMOUNT WILL BE AVAILABLE BY THE BENEFICIARY’S DRAFT AT SIGHT FOR 5 PERCENT OF THE INVOICE AMOUNT (NEGO AMOUNT MUST BE SAME WITH PAYABLE AMOUNT BY SECOND NEGOTIATION OF THE APPLICANT’S ACCEPTANCE CERTIFICATE) WHEN ACCOMPANIED BY THE FOLLOWING DOCUMENTS :
    1)DETAILED INVOICE IN DUPLICATE
    2)ACCEPTANCE CERTIFICATE ISSUED BY THE MAFRA, THE MINISTRY OF AGRICULTURE, FOOD AND RURAL AFFAIRS GOVERNMENT OF THE REPUBLIC OF JAPAN”
    Em muốn hỏi là nhà xuất khẩu phải lập 2 draft : 1 có giá trị 95% invoice và cái kia 5% giá trị invoice đúng không?
    Thứ 2, nhà xuất khẩu chỉ xuất trình 2 bản gốc Detailed Invoice thì có bị thiếu không?
    Thứ 3, Acceptance Certificate có cần được xuất trình cho em luôn không?
    Thứ 4, LC yêu cầu Full set of B/L, trên B/L cũng thể hiện số bản gốc được phát hành là 03 bản, khách xuất trình 3 bản gốc và 2 bản Copy Non-Negotiable thì có được xem là hợp lệ không?
    Thứ 5, có vài chứng từ LC không yêu cầu mà khách vẫn xuất trình thì em có cần phải gửi qua ngân hàng phát hành luôn không?
    Em mất ăn mất ngủ mấy ngày nay rồi hy vọng được anh hỗ trợ càng sớm càng tốt. Cảm ơn anh rất nhiều

    Reply

    • mroldman

      December 21, 2016 at 8:06 pm

      1) Xuất trình lần 1 gồm hối phiếu 95% trị giá invoice cùng các chứng từ yêu cầu; xuất trình lần 2 gồm hối phiếu 5% trị giá invoice cùng các chứng từ yêu cầu.
      2) in duplicate nghĩa là 2 bản (trong đó ít nhất phải có 1 bản gốc) nhưng xuất trình 02 bản gốc cũng được
      3) Dĩ nhiên là có.
      4) Hợp lệ
      5) Không quan tâm

      Reply

      • Aline

        December 22, 2016 at 8:33 am

        Thời hạn xuất trình 21 ngày kể từ ngày on board 30/11/2016. Vậy hạn chót em lập MT 742 là ngày nào ạ? Khách nói Acceptance Cert. chỉ nhận được khi nào nhà nhập khẩu đã nhận được hàng và đem đi kiểm định mà kết quả đạt yêu cầu mà bây giờ bộ chứng từ vẫn chưa gửi được do có vài lỗi phải trả khách sửa lại. Vậy lần xuất trình bộ chứng từ 5% invoice đó có cần phải đáp ứng thời hạn 21 ngày kể trên không ạ vì em e là sẽ không kịp.
        Còn nữa, Insurance Policy không có chỗ nào thể hiện ngày hiệu lực mà chỉ có ngày ký là 14/12/2016 trong khi on board là 13/12/2016. Điều này bất hợp lệ đúng không ạ?Em phải nói khách sửa lại thế nào ạ? Cám ơn anh rất nhiều.

        Reply

        • mroldman

          December 28, 2016 at 9:20 am

          1) Để tránh “late presentation” cho 5% còn lại, L/C nên quy định thêm “chứng từ xuất trình xuất trình sau 21 ngày sau ngày B/L chập nhận miễn là trong thời hạn hiệu lực của L/C”, đồng thời extend thời hạn hiệu lực L/C đến một khoản thời gian hợp lý, tức là thời gian có thể xuất trình Certificate of Acceptance”.

          Nếu L/C chưa quy định như vậy thì cần sửa đổi.

          2) Ngày phát hành BH không được muộn hơn ngày giao hàng trừ phi BH thể hiện có hiệu lực từ một ngày không muộn hơn ngày giao hàng.

          Reply

  4. Trang

    January 18, 2017 at 8:32 pm

    hi
    happy new year mr old man!. i have concern. in the case lc does not state lc must be endorsed, which risks we will face?. And when a bank presents docs, the cover does not state lc is endorsed. what should we do?

    Thanks for your advice

    Trang

    Reply

    • mroldman

      January 23, 2017 at 3:10 pm

      Hi,

      Thank you and wishing you the same!

      The purpose of endorsement on the L/C is to prevent multiple presentations to different negotiating banks.

      As you know, when making a presentation to the negotiating bank, the beneficiary is requested to present the documents and the original L/C and all amendments thereto. When the presentation is negotiated or paid, the negotiating bank will endorse on the back of the L/C the amount drawn/paid. So, the beneficiary cannot make the same presentation to another bank.
      Assuming that the L/C is available with any bank by negotiation and the beneficiary made a presentation to Bank A which negotiated but forgot to endorse the L/C and now the beneficiary makes another presentation with the same (forged) documents to Bank B, Bank B will bear the risk of non-reimbursement from the issuing bank.

      Kind regards,
      Mr. Old Man

      Reply

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