ICC Digital Library Forum

If a credit issued avaliable by negotiation with Bank XXX (not issuing bank) but Exporter presented document to Issuing bank through Bank YYY (without pass Bank XXX).
Can the issuing bank refuse to take up documents since documents are not presented to Nominated bank (Bank XXX) as credit instructed?

In my understand,I think that Exporter can do that since Art.10(b) use the word "or" in 2nd paragraph .

An irrevocable Credit constitutes a definite undertaking of the Issuing Bank, provided that the stipulated documents are presented to the Nominated Bank or to the Issuing Bank and that the terms and conditions of the Credit are complied with.

A beneficiary can present the documents directly to the Issuing bank (bypassing the nominated bank.)

Most standby DC require the beneficiary to present demand for payment directly to the issuing bank. The nominated bank plays no role in such DC.

In your original query, by "Bank YYY (without pass Bank XXX)", do you really mean "Bank YYY (bypassing Bank XXX)"? We just wish to make absolutely sure of this. Otherwise our response does not address to your query.

Are you OK in Afghanistan?

http://www.tolee.com

The liability of the issuing bank towards the beneficiary under the L/C remains intact and is separate from any other bank's liability if there is even a confirming bank involved in the L/C. Therefore a beneficiary may at its own discretion approach the issuing bank directly for the payment of his documents or through another bank not nominated in the L/C. the bank yyy is just an intermediary forwarding documents to the issuing bank.

In you query you said yyy without pass xxx which is to me that the beneficiary presented documents to his bank yyy who in turn forwarded them to xxxx and xxx sent them to the issuing bank, is it so?

GOOD BYE MESSAGE

For the period of 29th Septembner through 11th October 2001, we would be leavinjg Tornoto for Jeddah and Riyadh to conduct Risk Management in Trade Finance 3-day workshops for the Institute of Banking in Saudi Arabia.

However, no hijack or war insurance is available for air travel these days as we were told by our travel agent.

We would join the Discusion Forum upon our return but two DC litigation cases are waiting for us. So our time on the DC Pro may be reduced. Hope everybody understand this.

Until then good bye.

http://www.tolee.com

[edited 11/13/01 4:24:19 AM]

One thing to be added here. In case the nominated bank charges such as advising, amendment etc. are on the beneficiary's account, the issuing bank has to make sure that the beneficiary has paid such charges to the nominated bank otherwise in accordance with article 18 c(ii)the issuing bank will remain liable for the payment of such charges if the nominated bank couldn't collect them from the beneficiary.

When issuing a d/c, it is a definite undertaking of the issuing bank to honor/accept timely presented and credit conform doc.s, therefore, it is still its task even the doc.s have been presented by-passing any nominated bank. However, it may be prudent to advise nominated bank of the status to take necessary measures.
Regards, Cengizhan Kaptan - CDCS cenkap@superonline.com

I have come across instances where a beneficiary, having difficulty with a nominated bank claiming discrepancies which were inconsequential or simply incorrect, merely received the documents back from the Nom bank and presented directly to the issuing bank, who promptly paid.