Uncategorized WHETHER THE ISSUING BANK CAN REFUSE THE COMPLIED DOCUMENTS… By Mr Old Man Posted on June 24, 2014 2 min read 4 0 2,390 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr Da Nang, Vietnam QUESTION Hi, I do need comments from someone who knows about Bangladesh Laws relating to refusal of documents. We have received MT799 from the issuing bank with the content as follows: “PLS BE INFORMED THAT WE ARE OBLIGATED TO FOLLOW THE FOREIGN EXCHANGE POLICY IMPOSED BY OUR CENTRAL BANK AS WELL AS THE PREVAILING LAWS OF OUR COUNTRY. THE LAWS STATES THAT BEFORE RELEASING THE FOOD ITEM THE GOODS MUST BE EXAMINED BY THE DEPARTMENT OF AGRICULTURE (PLANT PROTECTION WING). AFTER EXAMINATION THEY HAVE FOUND THAT THE SHIPPED CONSIGNMENT ARE NOT AS QUALITY AS PER DESCRIPTION OF THE ORIGINAL CREDIT. THE APPLICANT HAS INSTRUCTED US VIA THEIR LETTER DATED 08.06.2014 TO RETURN BACK THE ORIGINAL SHIPPING DOCUMENTS TO YOUR END IMMEDIATELY.” Can the issuing bank refuse the complied documents because of the above mention? Best regards, Lan ————– ANSWER Hi, If the LC does not contain such unfair provision/clause, then according to Article 7 UCP 600, the issuing bank must honour the complying presentation. It cannot return the documents based on the applicant’s instructions or even on Department of Agriculture’s examination result. If the LC does not contain such provision then only the court’s decision can be binding on the issuing bank. Regarding LCs with such unfair clause or similar, please click the following to read my article “Unfair Letters of Credit” published in Trade Services Update in 2010: http://nhducdng.wordpress.com/2010/11/16/unfair-letters-of-credit/ Regards, N.H.Duc ———– P/s: The Q&A is quoted from DCPro Discusssion Forum of June 23, 2014
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?