WHETHER THE LC CAN BE AMENDED AFTER THE DOCUMENTS HAVE BEEN PRESENTED TO THE ISSUING BANK

QUESTION

Hi sir,

This is Jawad Ahmed from Askari Bank ltd. Pakistan.

Hope this email finds you well.

I have a question regarding Letter of Credit amendment. I have been seeking  an amendment in Letter of credit where at the time of LC opening the unit price was USD 570 and partial documents were presented against this LC with the same unit price. But today applicant requested an amendment where he presented revised proforma invoice with different unit price of USD 575 and want field to 45 to be amended with this unit price for commodity. I wanted to ask if this amendment can be processed?

Looking forward to your reply

Thank you.

Jawad Ahmed

—-

ANSWER

Hi,

According to sub-article 10 UCP 600, an LC can neither be amended nor cancelled without the agreement of the issuing bank, the confirming bank, if any, and the beneficiary. The terms and conditions of the original LC will remain in force for the beneficiary until the beneficiary communicates its acceptance of the amendment to the bank that advised such amendment. The beneficiary should give notification of acceptance or rejection of an amendment. If the beneficiary fails to give such notification, a presentation that complies with the LC will be deemed to be notification of acceptance by the beneficiary of such amendment. As of that moment the LC will be amended.

In your specific case, the issuing bank can agree to issue the amendment at the request of the applicant. If the beneficiary withdraws the presented documents and makes a new presentation in accordance with the original LC and the amendment thereto, it is considered that the beneficiary accepts the amendment.  If the beneficiary does not make a new presentation, it is considered that the beneficiary has not accepted the amendment.

This provision shall also apply to subsequent amendments.

Best regards,

Mr. Old Man