I present one case I have:
IB sent mt700 to a bank (AB) stating l/c is available with AB by payment and that l/c must be advised through another bank (BX). IB then sent 1st amendment making l/c available with any bank in country X by negotiation (country of BX).
At that moment AB decided to pass the l/c (plus amendment) to BX stating that the mssg is only a retransmission of the l/c they received from IB and that they consider the l/c cancelled and they close their files.AB sent the l/c to BX after receipt by AB of the amendment.
What is your opinion in this case ? Did or did not AB act properly ?
I think that:
- to cancel a l/c you have to advise it first.you cannot cancel something that hasn't been advised.Or, AB doesn't consider that their mssg is an advising of l/c but only a retransmission. Furthermore, there is art.9d(i) of UCP500.
I would really appreciate your opinion.
Regards,
Bogdan
1st advising bank
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AbdulkaderBazara
- Posts: 256
- Joined: Fri Apr 05, 2019 5:15 pm
1st advising bank
I believe there is a miscommunication here. As you have rightly said AB can't cancel the LC unless the main parties to the credit i.e. the issuing bank and the beneficiary agree to that. It seems AB's lose of interest in the LC was expressed wrongly.
In this case, AB should contact IB, the instructing party, first and advise it that AB is closing its records for this LC. It may however agree with IB to authenticate and transmit messages received from IB to BX (banks no more provide this type of services). If this is agreed, then IB should send an amendment designating BX as the first advising bank. If no objection received, AB then may authenticate and transmit the messages to BX specifically indicating that it is no more the advising bank. AB's responsibilities of authenticating and transmitting messages to the advising bank is not defined in UCP 500 and thus its action and consequence of the action might be beyond the scope of UCP.
It is worth stating that AB will remain responsible for its previous action as an advising bank.
regards
Abdulkader
[edited 5/4/2007 2:19:20 PM]
In this case, AB should contact IB, the instructing party, first and advise it that AB is closing its records for this LC. It may however agree with IB to authenticate and transmit messages received from IB to BX (banks no more provide this type of services). If this is agreed, then IB should send an amendment designating BX as the first advising bank. If no objection received, AB then may authenticate and transmit the messages to BX specifically indicating that it is no more the advising bank. AB's responsibilities of authenticating and transmitting messages to the advising bank is not defined in UCP 500 and thus its action and consequence of the action might be beyond the scope of UCP.
It is worth stating that AB will remain responsible for its previous action as an advising bank.
regards
Abdulkader
[edited 5/4/2007 2:19:20 PM]
1st advising bank
Dear Abdul
Thank you for your opinion (which I share).
Regards,
Bogdan
Thank you for your opinion (which I share).
Regards,
Bogdan