Confirmation for part of LC amount

HOANGTHIANHTHU_invalid · Post by **HOANGTHIANHTHU_invalid** » Mon Jun 13, 2011 1:00 am

Dear Gabriel,

Sorry for my stubbornness, but for the purpose of discussion I wish to draw your attention to sub-article 10 (a) and (e) which respectively say: (a) a credit can neither be amended nor cancelled without the agreement of the issuing bank, the confirming bank, if any, and the beneficiary; (b) partial acceptance of an amendment is not allowed and will be deemed to be notification of rejection of the amendment.

In view of the above provision, I’m afraid the fact that the confirming bank refuses to add its confirmation to an amendment for increase of LC amount signifies its rejection of that amendment. So, a presentation made for full amount (including original LC amount and increased amount as per amendment) would not constitute a complying presentation in the eye of the confirming bank, and of course, it is not obligated to negotiate without recourse even to the the extent of its confirmation.

Correct me if I am wrong.

Regards,
Duc N.H

GSham · Post by **GSham** » Mon Jun 13, 2011 1:00 am

Dear Duc N.H.

As per sub-article 10(b), a confirming bank may choose to advise an amendment without extending its confirmation and, if so, it must inform the issuing bank without delay and inform the beneficiary in its advice. When this happens, the amendment remains valid albeit it does not carry the confirming bank's confirmation.

Note that confirmation is irrevocable. Hence when a confirming bank declines to extend its confirmation to an amendment, it does not mean that its original confirmation is revoked. Its confirmation remains valid to the extent of the terms of the original LC.

The situation can become quite messy though.

Regards
Gabriel

HOANGTHIANHTHU_invalid · Post by **HOANGTHIANHTHU_invalid** » Mon Jun 13, 2011 1:00 am

Yes, quite messy. Thanks for your patience, Gabriel.

Duc N.H