It's from Agricultural Bank of China.
In export L/C, we usually pay beneficiary against the documents at beneficiary's risk whether it's negotiable L/C or not. Sometimes we negotiate the documents under the negotiable L/C. We just want to know how you finance your customer in your country. please give comments on the differences between the different operations.
Negotiation under negotiable L/c and payment under other pay
Negotiation under negotiable L/c and payment under other pay
Dear YanW,
I can well understand why your query has generated, up till now, no responses. This is because, I imagine, it requires banks to reveal information that they’d prefer to keep confidential and also could involve quite a lengthy reply.
I shall confine myself to saying:
1. That we would usually confine ourselves to effecting settlement ‘with recourse’ under a credit to where the credit is unconfirmed and expressed to be available by ‘negotiation’ (with us or freely negotiable).
2. I am very surprised that you usually pay the beneficiary against the documents at the beneficiary's risk whether the credit is negotiable or not (I am assuming in all instance ABC is the ‘nominated bank’).
Jeremy Smith
[edited 12/9/2003 11:45:13 AM]
I can well understand why your query has generated, up till now, no responses. This is because, I imagine, it requires banks to reveal information that they’d prefer to keep confidential and also could involve quite a lengthy reply.
I shall confine myself to saying:
1. That we would usually confine ourselves to effecting settlement ‘with recourse’ under a credit to where the credit is unconfirmed and expressed to be available by ‘negotiation’ (with us or freely negotiable).
2. I am very surprised that you usually pay the beneficiary against the documents at the beneficiary's risk whether the credit is negotiable or not (I am assuming in all instance ABC is the ‘nominated bank’).
Jeremy Smith
[edited 12/9/2003 11:45:13 AM]
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larryBacon
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Negotiation under negotiable L/c and payment under other pay
Bearing in mind the reference to financing the customer, is the question from YanW actually about the distinction between discounting a term B/E and discounting a deferred credit ?
Laurence
Laurence
Negotiation under negotiable L/c and payment under other pay
Search me, guv.
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JudithAutié
- Posts: 195
- Joined: Fri Apr 05, 2019 5:20 pm
Negotiation under negotiable L/c and payment under other pay
Acutally, I think that YanW is referring to the very prevalent (note I do not say correct) usage in the Far East to pay the beneficiary immediately, whether the credit is a sight credit or not, and also disregardless of the reimbursement terms. To my understanding from our Far East branches, all such payments are made against the beneficiary's undertaking to reimburse in case of any problem, including but not limited to non-reimbursement by the issuing bank, and (to my surprise) also discrepancies not picked up by the "negotiating bank" even under confirmed credits !
These transactions are very frequently presented to the designated bank through the beneficiary's usual bankers, who also would be implicated in the case of non-payment. The actual instruments used vary from country to country according both to their legal systems and legal cultural heritage (often based on the AngloSaxon common law practices.) The actual assignment of proceeds, as we know it in Europe, does not seem to be formalized as strictly.
Regards
Judith
These transactions are very frequently presented to the designated bank through the beneficiary's usual bankers, who also would be implicated in the case of non-payment. The actual instruments used vary from country to country according both to their legal systems and legal cultural heritage (often based on the AngloSaxon common law practices.) The actual assignment of proceeds, as we know it in Europe, does not seem to be formalized as strictly.
Regards
Judith