PAYMENT CLAUSE IN TRANSFERRED LETTERS OF CREDIT

PAYMENT CLAUSE IN TRANSFERRED LETTERS OF CREDIT

QUESTION

Dear all,

Is the payment clause that we shall pay only when we receive funds from issuing bank under original L/C, usual in transferred letters of credit and the banks are always using such structure of payment clause when transferring L/C or is it something which some banks are using but it is not proper?

Thanks
Snježana

Hi,

Unless the transferring bank is the confirming bank, the transferred L/C would contain the following clause or a clause of similar effect: “We shall pay only when we receive funds from the issuing bank under the original L/C”.

Kind regards,

N.H. Duc

P/s: The Q&A is quoted from DCPro Discussion Forum of 28-29 November, 2016