WHETHER THE SECOND ADVISING BANK IS THE NOMINATED NEGOTIATING BANK

Red Beach, Danang in 1965                               … and now 2014

QUESTION

Hi Sir,

It is me again. Hope that you will be able to provide me with your expertise.

I have received a PRC LC which my bank is the 2^nd advising bank.

1^st advising bank is a local bank in SG.

I.e. MT700 issued to local Bank whereas my bank indicated under F57A: advise through

LC indicated available with “Advising Bank by Negotiation”

In the above scenario, is my bank as 2^nd advising bank is authorized to negotiate the bill?

PS: I noticed that your site no longer carries the “Search” function… If possible, please allow the search as it is a very useful tools for us.

Thanks and regards

Shane Ho

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ANSWER

Hi Shane,

“Advising bank” is defined in Article 2 UCP 600 as the  bank that advises the credit at the request of the issuing bank.

The second advising bank should be understood as the bank that advises the credit to the beneficiary at the request of the (first) advising bank, hence, it is not considered to be the advising bank as defined in Article 2 UCP 600.

If the issuing bank intends that the credit is available with the beneficiary’s bank (i.e., second advising bank), it should expressly states so in the credit.

Kind regards,

Mr. Old Man

P/s:  I use Word Press free of charge. Sometimes I find it difficult to access my blog on Word Press. I’ll check when I have time.