transferable l/c

majidm · Post by **majidm** » Wed Jun 06, 2001 1:00 am

i would appreciate to learn whether it is possible a transferable credit to be transfered in diffrend exchange from the principal l/c

larryBacon · Post by **larryBacon** » Wed Jun 06, 2001 1:00 am

By different exchange, I presume you mean different currency, in which case the simple answer is no.
However, please see the ICC decision on the Euro available by clicking on "Search ICC Opinions" on the right-hand side of this screen. This gives some options for credits opened by a Euro-participating currency. These options relate to documents presented, currency paid etc, subject to agreement of the banks concerned.

Laurence A. J. Bacon

T.O.Lee · Post by **T.O.Lee** » Wed Jun 06, 2001 1:00 am

There is a market need to change the currency in the transferred portion of the LC but the UCP 500 Article 48 does not allow such change. A Canadian bank in Toronto entertains such demand from its good customers by doing suitable foreign exchange hedging to cover the risk.

If you try to do something not allowed in the UCP 500 you have to cover the risk yourself.

I am sending this comment from the newly opened Hong Kong Public Library.

I am from www.tolee.com
[edited 2/2/02 7:04:37 PM]

vobrien · Post by **vobrien** » Wed Jun 13, 2001 1:00 am

The original question "whether it is possible for a transferable credit to be transfered in diffrend exchange currency"

The correct answer is Yes it is possible. There can be very practical reasons why this should occur for the benefit of end buyer, middleman and end supplier. So, yes it is possible but to be possible the original transferable credit as issued must stipulate that the credit can be transferred in a different currency.

I deal with this situation on an on-going basis.

Vin

AbdulkaderBazara · Post by **AbdulkaderBazara** » Wed Jun 13, 2001 1:00 am

Agree, this covers two ssues
a)the foreign exchange risk (it will be assumed by the applicant.

b)the possibility of presentation of documents issued in a currency other than that of the LC.

I was involved in similar case as well.

larryBacon · Post by **larryBacon** » Thu Jun 14, 2001 1:00 am

Article 48h specifies permitted changes between terms and conditions applied to the first & second beneficiaries. This does not include a change of currency. Therefore, if this is required, a clause to this effect must be inserted in the original credit and, of course, must be acceptable to the banks concerned.

Laurence A. J. Bacon