Payment with recourse

svishu · Post by **svishu** » Sun Mar 17, 2013 12:00 am

A beneficiary under an LC has submitted export documents, available with our bank by sight payment. We are authorised to claim reimbursement from issuing bank's newyork office . Since the customer is cash rich, they do not want payment before receipt of proceeds by our bank. what would be our bank's locus standi if we effect payment to the beneficiary immediately on receipt of funds and the issuing bank rejects the documents due to a discrepancy which our bank has missed out. Can we effect payment ( not negotiate ) with recourse? what steps needs to be taken by us to protect our interest ?
Regards
Vishu

asamaha · Post by **asamaha** » Wed Mar 20, 2013 12:00 am

Payment or Negotiation with recourse (or under reserve) are not covered by UCP.
Regards
Antoine

svishu · Post by **svishu** » Wed Mar 20, 2013 12:00 am

Article 8 a ii states about the role of the confirming bank and states that negotiation is without recourse. If the LC is unconfirmed, I presume negotiation is possible with recourse.
Regards

asamaha · Post by **asamaha** » Thu Mar 21, 2013 12:00 am

Negotiation with recourse does not cover anyway the risk of non payment by the issuing for reason of discrepancies overlooked by the negotiating bank.
Regards
Antoine