Country Law

LNGUYEN1234 · Post by **LNGUYEN1234** » Tue Jun 17, 2014 1:00 am

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 VIDE 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

[edited 6/17/2014 5:16:20 AM]
[edited 6/17/2014 5:17:00 AM]
[edited 6/18/2014 9:09:56 AM]

LNGUYEN1234 · Post by **LNGUYEN1234** » Mon Jun 23, 2014 1:00 am

Is there any information relating to the above issue?

Best regards,
Lan

HOANGTHIANHTHU_invalid · Post by **HOANGTHIANHTHU_invalid** » Mon Jun 23, 2014 1:00 am

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 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/2010/11/1 ... of-credit/

Regards,
N.H.Duc
[edited 6/23/2014 4:45:28 PM]

LNGUYEN1234 · Post by **LNGUYEN1234** » Tue Jun 24, 2014 1:00 am

Hi Mr. N.H.Duc,

In this case the LC does not indicate the clause as “Unfair Letters of Credit” .

Thank you very much for your comment.