QUESTION
Hi Mr. Old Man.
Long time no see to disturb you again. I have an LC as follows:
Issuing bank: ABC Bank in Columbia
F41A: CITIUS33 by payment
F53: Citius33
F49: Confirm
F78: Docs to be sent to Issuing bank in Columbia and Reimbursement claim to be sent to COTIUS33 and pre advise to Issuing bank before 2 days
QUESTIONs
Is this LC normal? Does the customer need any amendment?
Does LC available by payment at CITIUS33 mean that no bank can negotiate the documents but send the documents to ABC Bank and MT742 to CITIUS33 plus a message to ABC Bank informing them of the same?
Thank you for your advice.
Best regards,
T.V
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ANSWER
Hi,
I must say LC of this kind is quite normal. Under LC available with the issuing bank or a nominated bank by payment, the issuing bank does not authorize another bank to negotiate.
However, if requested by the beneficiary, the beneficiary ‘s bank may consider negotiating the documents on a with recourse basis.
In your specific case, the LC was confirmed by Citibank NY (one of the most reputable banks in the world). If the documents are strictly complying, and the beneficiary has ability to reimburse your bank the negotiated amount plus interest in the event the issuing bank/confirming bank refuses to pay, it may agree to negotiate the document on a with recourse basis.
For reimbursement, act in accordance with the issuing bank’s instructions at Field 78.
Best regards,
Mr. Old Man
