Uncategorized SUB-ARTICLE 18(B) By Mr Old Man Posted on September 18, 2011 2 min read 4 0 3,014 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr by Old Man on Saturday, September 17, 2011 at 7:22am QUERY FROM GABRIEL.Maximum amount payable under an LC is $100. No tolerance is allowed. Invoice amount is $101. In line with article 18b, beneficiary decides to draw on the LC for $100 only. If the LC calls for a draft drawn for 100% of the invoice value, in this case should the draft be drawn for $100 or $101? Appreciate your advice..Regards,Gabriel———–COMMENT.Hi,.This situation falls into sub-article 18(b) which allows a nominated bank, a confirming bank or the issuing bank to accept an invoice with an amount in excess of the L/C amount provided the bank in question has not honoured or negotiated for an amount in excess of the L/C amount..It is advisable that the bank in question should not pay the L/C amount without the presenter’s agreement which can be shown in the covering schedule as well as in the draft if any. So, the draft in this case should be drawn for an amount equal to the L/C amount only notwithstanding that the L/C calls for a draft drawn for 100% of invoice value..Best regards,N.H.Duc
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
CAN THE ISUING BANK CITE “LATE PRESENTATION” AS A DISCREPANCY SOLELY BASED ON THE DATE OF THE COVER LETTER?
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
CAN THE ISUING BANK CITE “LATE PRESENTATION” AS A DISCREPANCY SOLELY BASED ON THE DATE OF THE COVER LETTER?