Uncategorized INSURANCE PERCENTAGE UNDER TRANSFERRED LC AND… By Mr Old Man Posted on March 3, 2013 5 min read 6 0 3,075 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr QUESTION Dear Mr. Old Man, I've already seen your picture, still younger than young, so why you or others call you Mr. Old Man? Anyway, I just follow as it is. Hope you're (and the big family) just fine. By the way, I've got some questions concerning UCP 600: 1. Article 38 (Transferable ) g……The percentage for which insurance cover must be effected may be increased to provide the amount of cover stipulated in the credit or these articles. Could you pls give an example? 2. Pls also clarify Art.38 j 3. Article 31 a Partial drawings or shipments are allowed. If a credit indicates partial shipment : prohibited…, is Art. 31a automatically applicable? or should the credit expressly mentions : Article 31 a UCP 600 is not applicable in addition to the statement partial shipment :prohibited. Thank you much for your valuable time spent to respond my three questions. God bless you. PitmanBandung West Java Indonesia————————— ANSWER Dear Pitman, I sometimes receive the same question as yours. “Mr. Old Man” is just a nickname given to me by a young student at a university when I first joined Yahoo! 360 Blog in 2007. The name has become familiar to thousands of students and colleagues, who eat, sleep and breathe L/C and remained unchanged so far. And I like it. 1) Sub-article 38(g) provides: “…The transferred credit must accurately reflect the terms and conditions of the credit, including confirmation, if any, with the exception of: … The percentage for which insurance cover must be effected may be increased to provide the amount of cover stipulated in the credit or these articles”. Here is an example to illustrate the provision: A transferable LC is issued for USD100,000 with insurance policy/certificate required to cover 110% of invoice value. If the LC is transferred for USD85,000, then the insurance policy/certificate is required to cover 129,42% of invoice value. 2) Sub-article 38 (j) says: “The first beneficiary may, in its request for transfer, indicate that honour or negotiation is to be effected to a second beneficiary at the place to which the credit has been transferred, up to and including the expiry date of the credit. This is without prejudice to the right of the first beneficiary in accordance with sub-article 38 (h)”. The purpose of sub-article 38(j), according to Gary Collyer, is to allow the first beneficiary to nominate the second beneficiary to honour or negotiate. However, such a nomination must be agreed by the transferring bank. I just want to add: If it is the case, in accordance with sub-article 38(h) and (k), presentation of documents are required to be made to the transferring bank in order for the first beneficiary to substitute its own invoice and drafts. 3) I see that where LC states partial shipments are prohibited or not allowed, there’s no need for the LC to exclude sub-article 31(a). Best regards,Mr. Old Man
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?