ICC Digital Library Forum

Hello all,

I would like to hear your opinion regarding the following:
We (as a 2nd dvising/beneficiary's bank) received LC issued by a Columbian Bank and advised to us through another European bank, which added their confirmation
to LC, subject to presentation of complying documents to their counters.

The beneficiary then presented us documents, but the presentation did not comply due to ''late presentation'' and other discrepancies.

In accordance with beneficiary's authorization, we avoided the nominating (confirming) Bank and sent documents for approval directly to issuing bank.

I am interested in hearing what the practice in your bank is in similar situations. Would you send discrepant documents to the nominating bank anyway?
Thank you for your comments.

Mojca


[edited 1/8/2010 9:37:50 AM: better look of post]

I would always send the documents to the transferring bank unless the transferring bank had stated that the first beneficiary has effected a 100% transfer and that documents may be sent direct to the issuing bank.

Mojca,
By adding confirmation, the confirming bank undertakes to honour and will only honour if the documents presented comply with the credit terms and conditions. If the documents do not comply and your bank forwards the documents to the confirming bank on approval basis, the confirming bank must also ask for the issuing bank’s approval to honour the documents.

A credit available with a nominated bank is also available with the issuing bank. To save the time, like your bank many banks choose either (i) to forward the documents directly to the issuing bank on approval basis or (ii) to ask for the issuing bank’s approval and instruction on where to forward the document to.

Jeremy,
It is understood from Mojca’s description that European Bank is not a transferring bank but a confirming bank.

Regards,
N.H.Duc

[edited 1/9/2010 10:57:32 AM]

I clearly did not have my glasses on!

Hi,
N.H.Duc, thanks for your reply and sorry Jeremy if I was not clear enough; we were indeed second advising bank only(not bank of second beneficiary).
Mojca