Dear all,
We have a L/C avialable with us by payment, containing reimbursing bank in field 53 and payment instruction are as follows: 'Provided complying presentation is made at your counters you are authorised to reimburse...'
In case that we notice some discrepancies, are we obliged to quote them on our cover letter or could we just send documents and ask issuing bank for authorisation to reimburse.
thanks, Snježana
reimbursment on reimbursing bank
reimbursment on reimbursing bank
Maybe I should clarify what is behind my question.
If we have not accepted to act under our authorisation as nominated bank, what obliges us to qoute discepancies.
Some of my colegees claim that beneficiara could sue us if we don't quote anything on cover letter and we still don't reimburse as per l/c terms, but in practice I have seen many import l/c doing the same (just sending documents, asking for authorisation to reimburse and not mentioning any discrepancy on their cover letter) and I have never seen somebody claiming that this is incorrect or contrary to the ucp 600.
thanks
If we have not accepted to act under our authorisation as nominated bank, what obliges us to qoute discepancies.
Some of my colegees claim that beneficiara could sue us if we don't quote anything on cover letter and we still don't reimburse as per l/c terms, but in practice I have seen many import l/c doing the same (just sending documents, asking for authorisation to reimburse and not mentioning any discrepancy on their cover letter) and I have never seen somebody claiming that this is incorrect or contrary to the ucp 600.
thanks
reimbursment on reimbursing bank
I am not sure if this answers your question.
When a nominated bank examines documents for facial compliance, determines they are discrepant and refuses them, and then is instructed by the beneficiary to send the documents to the issuing bank on an ‘in trust’ / ‘approval’ basis, there is not any requirement for the nominated bank to list the discrepancies in its covering schedule. (One problem with UCP – ISBP is they say nothing about the handling of documents a nominated bank has determined to be discrepant and refused and then sent to the issuing bank on the beneficiary’s instructions. As a result, for example, there is no fixed terminology to describe this process.)
Regarding reimbursement, if a separate reimbursing bank is specified, in the covering schedule you should ask the issuing bank to authorise you to claim reimbursement from the reimbursing bank. (While you could instead simply ask the issuing bank to remit the funds to the a/c specified by you, issuing bank’s tend to ignore such instructions.)
I struggle to see how not pointing out discrepancies could permit the beneficiary successfully to sue the nominated bank. Not pointing them out is in the beneficiary’s interest as the issuing bank may not identify them.
When a nominated bank examines documents for facial compliance, determines they are discrepant and refuses them, and then is instructed by the beneficiary to send the documents to the issuing bank on an ‘in trust’ / ‘approval’ basis, there is not any requirement for the nominated bank to list the discrepancies in its covering schedule. (One problem with UCP – ISBP is they say nothing about the handling of documents a nominated bank has determined to be discrepant and refused and then sent to the issuing bank on the beneficiary’s instructions. As a result, for example, there is no fixed terminology to describe this process.)
Regarding reimbursement, if a separate reimbursing bank is specified, in the covering schedule you should ask the issuing bank to authorise you to claim reimbursement from the reimbursing bank. (While you could instead simply ask the issuing bank to remit the funds to the a/c specified by you, issuing bank’s tend to ignore such instructions.)
I struggle to see how not pointing out discrepancies could permit the beneficiary successfully to sue the nominated bank. Not pointing them out is in the beneficiary’s interest as the issuing bank may not identify them.