QUERY FROM anilnair1966
hi
under which condition that a confirmed letter of credit subject to UCP 600 may become unconfirmed without the consent of the beneficiary.
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ANSWER
When a confirmed LC becomes an unconfirmed LC?
Hi,
Please find herewith Mr. T.O Lee’s model answer to your query:
QUOTE
The last sentence in sub-article 10 (b) of UCP 600 should give you the condition under which a confirmed letter of credit can become unconfirmed without the consent of the beneficiary.
Let us consider that the seller/beneficiary in New York and the buyer/applicant in Tel Aviv both have their head offices in Hong Kong, China. A letter of credit is issued in Hong Kong for shipment from New York to Tel Aviv covering a chemical that can also be used to make chemical weapons, a WMD (Weapon of Mass Destruction). This letter of credit is confirmed by a bank in New York and is later amended for shipment from New York to Iran. The seller/beneficiary, following instructions from the Hong Kong head office, accepts the amendment nevertheless. But the New York confirming bank does not agree to extend its confirmation to the amended letter of credit for national security reasons. Under such a situation, the confirmed letter of credit becomes unconfirmed without the consent of the beneficiary, as a direct result after application of UCP 600 sub-article 10 (b). The only duty left for the confirming bank is to advise its decision to the beneficiary and the issuing bank without delay.
UNQUOTE
Hope it can be helpful.
Best regards,
Nguyen Huu Duc …
