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PAYMENT CLAUSE IN TRANSFERRED LETTERS OF CREDIT

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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

———-
ANSWER

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

 

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