SUB-ARTICLE 10(b)

QUESTION

Dear Mr. Old Man,

I would like to hear your comments on this issue, regarding Validity of Amendment: “An issuing bank is irrevocably bound by an amendment as of the time it issues the amendment”

Case1:
Date of Amendment: 02 Jan 12
Date of presentation: 01 Jan 12 (as seen on the covering letter)

After checking the docs, iss.bank finds it in complicance with Amendment and LC (therefore non-compliant if regarding LC only). However, ‘cause the docs are presented before Amendment date, so….the amendment wont be count into checking the docs. è the docs are discrepant.

Is it right (discrepant) ? (in my opinion, they are compliant, applying the same logic regarding LC)

Case 2:
1. The iss. bank received a presentation at its counter on Jan 01. The docs are non-compliant according to LC terms.
2. On Jan 03, The iss.bank issued an amendment to the LC. This amendment 's terms help make the a/m docs turn compliant.
3. However on Jan 04, The iss. bank sent a msg to the presenting bank, stating that the docs are discrepant and that disc. fee would be deducted.

Is it (the iss.bank) right ???
(the docs may be discrepant on and before Jan 01, but on Jan 03, they would turn out to be compliant thanks to the amendment. So the iss. bank is incorrect as sending such msg ! ???)

In a word, how should we understand UCP.10.b ?

Your sparing time is highly appreciated !
TTD
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ANWSER

Hi,

I do not see there are any ICC Opinions covering the specific situations as described by yourself.

According to sub-article 10(b), the issuing bank is irrevocably bound by the amendment as of the time it is issued, hence, it should honour if the documents presented are complying with the L/C and the amendment.

So,

Case 1:
I agree with you.

Case 2:
If the issuing bank has intended to refuse the documents, it should not have issued such amendment. It seemed that the issuing bank’s notice of discrepant documents was to collect discrepancy fees rather than to refuse the documents.

Best regards,
Mr. Old Man