Jeremy, No this is not I'm suggesting. The security of the goods in one of available options (way out) in case of the customer's payment default. Certainly the decision is based on the financial assessment of the customer. However, some banks have their letter of credit facilities approved for sight...

Jeremy, In the case of a customer's credit line approved for sight credits, the issuing bank is looking to the goods as a security to the transaction. However, if such a DC condition is introduced then control of merchandise is hindered and the bank is exposed to an additional credit risk which has ...

Most DC's we see being issued covering sea shipments have as one of their conditions presentation of a full set of B/L's issued to the order of the issuing bank In some DC's, however, the applicant requires 1/3 B/L to be sent to him directly for the reason of expediting release of goods from the por...

Judith, I have seen various versions of such credits where the applicant has the upper hand since he is the one issuing the certificate, be it acceptance or authorization for payment. Unfortunately a lot of them are poorly structured and this why at the time of payment problems arise. I believe ther...

A very happy and prosperous new year to all.

Dimitri

Jason, It is a market practice followed by many applicants/beneficiaries in the Middle East especially with domestic deliveries/local credits. The issues here are: 1. The issuing bank takes a responsibility for the accuracy of the document since it is going to signature-verify it, thus, becoming a p...

Dear Jeremy, As long as the application of Art. 1 “unless expressly modified or excluded in the credit” continues to be “misused” such exclusions won’t stop, e.g. we recently saw an exclusion of sub-Articles 13 (b) & 14 (d) under UCP 500 and certainly we did not confirm the credit! If the issuin...

Dear Abdulkader, Thanks for your note. As you might have noticed I’m now based in Cairo and I’m doing fine. In a recent symposium I attended on UCP 600, Vincent Maulella mentioned that that it would be chaotic if we start amending our credits to be subject to UCP 600 and I would agree with his view....

An issuing bank from a neighboring country sent an amendment via MT 707 that also incorporated the following clause: “This LC is subject to UCP Publication No. 600 of ICC, 2007 Revision”. The DC had been issued in Jun. ’07. It is our opinion that any DC’s issued prior to July 1st and remaining outst...

Jeremy,

By completing step no. 1, the issuing bank is already providing its refusal. What is then the purpose of seeking a waiver from the applicant if it is to be followed by another refusal ?

Regards
Dimitri