Bank X in Country A, the nominated bank, sets up a counter in Country B for receiving documents from the beneficiary. The documents are scanned to Bank X in Country A for checking. When the documents are found to be complying, Bank X in Country A emails its covering schedule to its counter in Country B, which dispatches the documents to the issuing bank under the covering schedule of Bank X, Country A.
Thus the documents are sent by the nominated bank but from another country. If such documents were lost in transit enroute to the issuing bank, would article 35 apply?
Article 35 and documents sent by nominated bank's overseas a
Article 35 and documents sent by nominated bank's overseas a
Hello;
* Article 35 of UCP 600 covers the situations where complying documents were forwarded by the nominated bank and lost in transit between that nominated bank and the issuing bank or confirming bank, or between the confirming bank and the issuing bank.
* As per article 2 of UCP 600, branches of a bank in different countries are considered to be separate banks.
Based on these two articles, I think article 35 would not apply to the above scenario.
Regards.
Zeynep ERSAMUT
* Article 35 of UCP 600 covers the situations where complying documents were forwarded by the nominated bank and lost in transit between that nominated bank and the issuing bank or confirming bank, or between the confirming bank and the issuing bank.
* As per article 2 of UCP 600, branches of a bank in different countries are considered to be separate banks.
Based on these two articles, I think article 35 would not apply to the above scenario.
Regards.
Zeynep ERSAMUT
Article 35 and documents sent by nominated bank's overseas a
Branches of a bank in different countries are considered to be separate banks. Thus a branch in Country A (Branch A) and a branch in Country B (Branch B) are considered to be separate banks under UCP. However, Branch A's counter set up in Country B is operating as an extension of Branch A, not part of Branch B. Could it not be argued that Branch A and its counter in Country B are the same branch?
Not that I am advocating this idea; I just want to get the views of the experts on this forum.
[edited 7/25/2012 3:15:46 PM]
Not that I am advocating this idea; I just want to get the views of the experts on this forum.
[edited 7/25/2012 3:15:46 PM]
Article 35 and documents sent by nominated bank's overseas a
If the credit is available in Country A only and the documents are presented in Country B, the terms of the credit have simply not been met. Therefore, Bank X is just not entitled to claim the rights of a nominated bank and thus the issuing bank does not owe Bank X any obligation at all. Furthermore, by purporting to the issuing bank that the documents have been presented in country A (assuming this is what is happening) Bank X is acting in bad faith if not fraudulently. Thus, the question of Article 35 is wholly academic.
Article 35 and documents sent by nominated bank's overseas a
Thanks, Zeynep and Jeremy, for your expert opinion. Put in other words, it is the location of the nominated bank that counts -- the documents have to be presented at the nominated bank's location and dispatched from the nominated bank's location.
Regards, Gabriel
Regards, Gabriel
Article 35 and documents sent by nominated bank's overseas a
As I see it, it is the scope of the nomination that counts. Jeremy's response expressly assumes that the LC authorizes presentation to Bank X only in country A. The LC (with or without consideration of isbp) may say otherwise or be ambiguous on this point.
Note that similar issues could arise under Article 7 about a beneficiary's right to honour and a nominated bank's right to reimbursement where the issuer receives the documents after the expiry date.
Regards, Jim Barnes
Note that similar issues could arise under Article 7 about a beneficiary's right to honour and a nominated bank's right to reimbursement where the issuer receives the documents after the expiry date.
Regards, Jim Barnes
Article 35 and documents sent by nominated bank's overseas a
Jim,
If the LC is available with Bank X and does not indicate the place of expiry, the beneficiary may present documents to any branch of Bank X in any location. However, if the LC is available with Bank X and the place of expiry is country A, the beneficiary may only present documents to Bank X in Country A or to the issuing bank.
This discussion pertains to a situation where the LC is available with Bank X and the place of expiry is country A – the documents are presented by the beneficiary NOT to Bank X in country A, but to Bank X in country B. Having determined that the documents are complying, Bank X in country B forwards the documents to the issuing bank, under the covering schedule of Bank X, country A (i.e. the nominated bank in the LC). In so doing, Bank X in country B is not acting in its own capacity but as an “agent” of Bank X in country A. The question is in the event of such documents having been lost in transit before reaching the issuing bank, whether the issuing bank is nonetheless required to honour as provided in article 35.
Regards, Gabriel
If the LC is available with Bank X and does not indicate the place of expiry, the beneficiary may present documents to any branch of Bank X in any location. However, if the LC is available with Bank X and the place of expiry is country A, the beneficiary may only present documents to Bank X in Country A or to the issuing bank.
This discussion pertains to a situation where the LC is available with Bank X and the place of expiry is country A – the documents are presented by the beneficiary NOT to Bank X in country A, but to Bank X in country B. Having determined that the documents are complying, Bank X in country B forwards the documents to the issuing bank, under the covering schedule of Bank X, country A (i.e. the nominated bank in the LC). In so doing, Bank X in country B is not acting in its own capacity but as an “agent” of Bank X in country A. The question is in the event of such documents having been lost in transit before reaching the issuing bank, whether the issuing bank is nonetheless required to honour as provided in article 35.
Regards, Gabriel
Article 35 and documents sent by nominated bank's overseas a
Jim,
Absolutely agree with you that it is the scope of the nomination that counts. My impression is that –in the main- banks continue to restrict honour to a specific bank in a specific country but continue to be a little more flexible with negotiation.
Gabriel,
If not already clear, the answer to your question must be ‘no’ as the documents have not been presented to the nominated bank (which is made up of both its name and its location).
Regards, Jeremy
Absolutely agree with you that it is the scope of the nomination that counts. My impression is that –in the main- banks continue to restrict honour to a specific bank in a specific country but continue to be a little more flexible with negotiation.
Gabriel,
If not already clear, the answer to your question must be ‘no’ as the documents have not been presented to the nominated bank (which is made up of both its name and its location).
Regards, Jeremy
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GlennRansier_olsABN
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Article 35 and documents sent by nominated bank's overseas a
As far as the ICC's view goes they have left the decision to practice, banks and/or courts to decide. See the last line of opinion R655 / TA631rev - 2005-2008.