In light of the content of sub-articles 6(a), (b) and (d), issuing bank may nominate a bank to pay, incur a deferred payment undertaking, accept or negotiate, or nominate any bank ("nominated bank" as defined in article 2) in the case of a freely negotiable credit, and that credit to be expired at the place of "honour" or ""negotiation". (Such date and place will be deemed to be an expiry date for presentation)
A bank receives a credit, in the capacity of an advising bank, the credit states available with any bank by negotiation, and the expiry date for presentation (for negotiation) to be at the place of the negotiating bank. This bank elects not to negotiate the documents submitted by the beneficiary and handle only examination and deliver same to the issuing bank for payment as agreed by the beneficiary.
Questions:
1) Is this a "Complying Presentation"? (assuming documents are in good order)
2) Do you consider this bank a "Nominated Bank"?
3) If your answer to question 2 is YES, what kind of nomination this bank is nominated for?
4) If your answer to question 2 is NO, what is the capacity of this bank? (except being an advising bank)
5) If you consider this bankis only a "Presenter", where is the place of preentation and expiry when there is no negotiating bank involved?
6) What is the meaning of "or the documents so delivered" under definition of "Presentation". (article 2)
7) Can we still insert "Country of Beneficiary" under SWIFT Field 31D (Place of Expiry) in the credit.
8) Is expiry date for presentation changed to "Country of Beneficiary" making any different?
Happy New Year Every One!
Albert
[edited 12/29/2006 12:05:08 AM]
Article 6
Article 6
Albert,
Question 1: Yes (if they conform)
2. Yes, according to 6 and 12c.
3. The bank is nominated for negotiation even if it does not negotiate. So expiry date is with the nominated bank.
6. it means, in my opinion, the documents (discrepant or not) presented under a credit to the IB or NB
Happy New Year to all
Daniel
Question 1: Yes (if they conform)
2. Yes, according to 6 and 12c.
3. The bank is nominated for negotiation even if it does not negotiate. So expiry date is with the nominated bank.
6. it means, in my opinion, the documents (discrepant or not) presented under a credit to the IB or NB
Happy New Year to all
Daniel
Article 6
Agree with Daniel on all counts. Khalid
Wish every one a happy 2007
Wish every one a happy 2007
Article 6
Firstly, happy New Year to you, Albert, all other forum users and everyone at Coastline.
Secondly, I do not agree that ‘In light of the content of sub-articles 6(a), (b) and (d), issuing bank may … nominate any bank in the case of a freely NEGOTIABLE credit’ [my emphasis]. Under 600 the ability to make a credit freely available with any bank is now extended to sight payment, acceptance and DP as well.
Secondly, as to your questions:
1. Yes (as under 500).
2. Yes. As under 500 the fact that it chooses not to act on its nomination does not mean it is not a nominated bank. However, as under 500, what it does mean is that it is unable to claim the rights of a nominated bank.
3. To negotiate, as under 500, but the nominated bank has chosen not to accept its nomination.
4. N/A
5. Per 6(d) place of presentation may be the nominated bank or issuing bank. In your example, the actual place of presentation of the documents is the nominated bank notwithstanding it has declined its nomination (as it would be under 500).
6. I believe that a nominated bank that acts in accordance with its nomination is automatically a presenter, as it delivers documents under a credit to the issuing bank. In your example, the nominated bank is also a presenter as, although it has declined its nomination, it is still delivering documents under a credit to the issuing bank.
7. My understanding is that notwithstanding 6(d)(ii) rendering the concept of the place of expiry redundant the MT700 message ‘format’ will not be altered (but the ‘definition’ will be ‘fudged’) to reflect this. Thus, this will continue to be a mandatory field so all banks will still be obliged to put a place of expiry notwithstanding 600(d)(ii).
8. Sorry, don’t understand your question.
Regards, Jeremy
[edited 1/2/2007 1:24:09 PM]
Secondly, I do not agree that ‘In light of the content of sub-articles 6(a), (b) and (d), issuing bank may … nominate any bank in the case of a freely NEGOTIABLE credit’ [my emphasis]. Under 600 the ability to make a credit freely available with any bank is now extended to sight payment, acceptance and DP as well.
Secondly, as to your questions:
1. Yes (as under 500).
2. Yes. As under 500 the fact that it chooses not to act on its nomination does not mean it is not a nominated bank. However, as under 500, what it does mean is that it is unable to claim the rights of a nominated bank.
3. To negotiate, as under 500, but the nominated bank has chosen not to accept its nomination.
4. N/A
5. Per 6(d) place of presentation may be the nominated bank or issuing bank. In your example, the actual place of presentation of the documents is the nominated bank notwithstanding it has declined its nomination (as it would be under 500).
6. I believe that a nominated bank that acts in accordance with its nomination is automatically a presenter, as it delivers documents under a credit to the issuing bank. In your example, the nominated bank is also a presenter as, although it has declined its nomination, it is still delivering documents under a credit to the issuing bank.
7. My understanding is that notwithstanding 6(d)(ii) rendering the concept of the place of expiry redundant the MT700 message ‘format’ will not be altered (but the ‘definition’ will be ‘fudged’) to reflect this. Thus, this will continue to be a mandatory field so all banks will still be obliged to put a place of expiry notwithstanding 600(d)(ii).
8. Sorry, don’t understand your question.
Regards, Jeremy
[edited 1/2/2007 1:24:09 PM]
Article 6
Happy New Year to all!
Under UCP 600 Article 6 d ii “The PLACE OF THE BANK with which the credit is available is the PLACE FOR PRESENTATION”. Under a freely negotiable L/C. the place for presentation will be the negotiating bank address. If Bank A negotiates the documents, then its bank address will be the place for presentation. No one would question about this.
However, if Bank A refuses to negotiate, should we consider the PLACE FOR PRESENTATION remains at Bank A location or should it be at the issuing bank location only?
Please note that in practice, many banks that receive freely negotiable L/Cs would not NEGOTIATE the drafts and/or documents. They process the transactions and submit the documents to the issuing bank for payment. Many times, place of expiry would states “country of beneficiary”. Under UCP 600 Art. 6 d ii and the definition for NEGOTIATION under Art. 2, if L/C available with any bank by negotiation but no bank negotiate the credit, where is the place for presentation?
Am I worrying too much?
Best Regards
Under UCP 600 Article 6 d ii “The PLACE OF THE BANK with which the credit is available is the PLACE FOR PRESENTATION”. Under a freely negotiable L/C. the place for presentation will be the negotiating bank address. If Bank A negotiates the documents, then its bank address will be the place for presentation. No one would question about this.
However, if Bank A refuses to negotiate, should we consider the PLACE FOR PRESENTATION remains at Bank A location or should it be at the issuing bank location only?
Please note that in practice, many banks that receive freely negotiable L/Cs would not NEGOTIATE the drafts and/or documents. They process the transactions and submit the documents to the issuing bank for payment. Many times, place of expiry would states “country of beneficiary”. Under UCP 600 Art. 6 d ii and the definition for NEGOTIATION under Art. 2, if L/C available with any bank by negotiation but no bank negotiate the credit, where is the place for presentation?
Am I worrying too much?
Best Regards
Article 6
"Fog up the river, fog down the river" C. Dickens - Bleak House.
My opinion:
The place of presentation is with the bank which sent the documents to the issuing bank . This bank is a nominated bank even if it did not negotiate. This bank is also the presenter as, if I am correct, J. Smith put it.
Daniel
My opinion:
The place of presentation is with the bank which sent the documents to the issuing bank . This bank is a nominated bank even if it did not negotiate. This bank is also the presenter as, if I am correct, J. Smith put it.
Daniel
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KimChristensen
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Article 6
Dear all,
& a happy new year to all of you.
One could ask if the answers given here would have been any different had then been placed under the “UCP 500 section”. I would think not.
In the UCP 600 it has been made crystal clear that in case there is a nominated bank then the beneficiary also has the option to present the documents directly to the issuing bank.
Although not spelled out that way in the UCP 500, to me this has always (“always” in this context being the period which I have know of the existence of LCs
been the case. This option is of course an exception. No doubt the vast majority of beneficiaries would choose to present to the nominated bank for a number of reasons (easier to cure documents, risk of documents being lost in transit etc).
To me the question is not whether or not the nominated bank chooses to (in this example) “negotiate” – but whether or not it accepts to receive the documents and forward same to the issuing bank.
Best regards
Kim
& a happy new year to all of you.
One could ask if the answers given here would have been any different had then been placed under the “UCP 500 section”. I would think not.
In the UCP 600 it has been made crystal clear that in case there is a nominated bank then the beneficiary also has the option to present the documents directly to the issuing bank.
Although not spelled out that way in the UCP 500, to me this has always (“always” in this context being the period which I have know of the existence of LCs
been the case. This option is of course an exception. No doubt the vast majority of beneficiaries would choose to present to the nominated bank for a number of reasons (easier to cure documents, risk of documents being lost in transit etc).To me the question is not whether or not the nominated bank chooses to (in this example) “negotiate” – but whether or not it accepts to receive the documents and forward same to the issuing bank.
Best regards
Kim
Article 6
I have recently responded directly to this (or a very similar question) in the U.S.
1. Yes. A beneficiary presenting complying documents at the counters of a nominated bank within the terms and conditions of the credit is protected - regardless of whether that bank chooses to act upon its nomination. If they choose to not negotiate, the beneficiary is still protected.
2. Yes.
3. Based on the information given, they Nominated to negotiate a freely available credit.
4. NA
5. NA. They are a nominated bank.
6. In this case it means the package of documents, as well as the bank.
Don Smith
1. Yes. A beneficiary presenting complying documents at the counters of a nominated bank within the terms and conditions of the credit is protected - regardless of whether that bank chooses to act upon its nomination. If they choose to not negotiate, the beneficiary is still protected.
2. Yes.
3. Based on the information given, they Nominated to negotiate a freely available credit.
4. NA
5. NA. They are a nominated bank.
6. In this case it means the package of documents, as well as the bank.
Don Smith