UCP 500 ARTICLE 13(B) AND 14(D)

[BilselTatar]

Hello,
I need your assistance in below mentioned case.

We are going to issue a confirmed letter of credit requiring the presentation of:
1.comm invoice.....
2.clean on board bill of lading in
2 org ....
3.packing list...
4.benef.signed declaration
stating that 1/3 orginal b/l
and 1 org comm invoice have
been sent directly to the
opening bank within 2 days
after shipment.

When the documents indicated on benef cert is sent to our bank by the benef., are we bound to act as per Art.13(B) and 14(d)?
Thank you

[JudithAutié]

Strictly speaking, I would not consider this as a presentation under the L/C, but the fulfillment of one of the terms of the L/C. Consequently I consider that art 13 and 14 are not applicable.

HOWEVER, since the usual reason for requiring 1/3 original B/L is to obtain quick release of the goods before all the other documents are available under the L/C, you would be in a sticky position if you deliver these documents to the applicant and then find the documents discrepant when presented. All of the banks I have known require the applicant to sign a formal release that the documents are to be accepted as presented. This procedure is not without its pitfalls, as has been pointed out in several articles which have appeared both in DCInsight and elsewhere.

Regards
Judith

[KimChristensen]

Dear Bilsel,

I would agree with Judith that this is not a presentation under the L/C, but I simply fail to understand why you would do it like this?

Best regards
Kim

[Basel]

Bilsel,
without responsibility:
I guess you are in a tricky situation,the applicability of articles 13,14 depends on the form you received the documents required under item 4 mentioned in the l/c.
if the documents presented with a covering letter clearly says that those documents are in fulfillment of item no 4 then articles 13,14 are not applicable, but if the presentation simply made under the captioned l/c then the documents protected by UCP500 articles13,14 and should be checked and refused within time limit.
banks should not use such tricky conditions in their l/cs.

Basel
[edited 11/23/2005 1:55:00 PM]

[NigelHolt]

I do not see how the issuing bank is entitled to examine the documents forwarded directly to it as:
1. It may not be that these are the documents presented to the nominated bank.
2. What may constitute an examination of documents with reasonable care by the nominated bank -and therefore be binding on the issuing bank- may not constitute an examination with reasonable care by the issuing bank if the credit were available with the issuing bank. (Thus, for example, the issuing bank may be obliged to take up documents the nominated bank has found compliant but which the issuing would be obliged to refuse if the credit were available with it.)

Bet 2. above has got you thinking.

[edited 11/23/2005 2:08:38 PM]

[Basel]

the required documents can be presented to the issuing bank directly as per article 9 of UCP500 and the issuing bank has to check those documents in light of articles13,14 to determine whether they comply with l/c tems or not.


Basel

[KimChristensen]

Dear all,

Perhaps someone could be kind enough to enlighten me as to the purpose of this; i.e. that the beneficiary should sent 1/3 b/l directly to the opening bank.

In any case I really think that the issuing bank would be wrong in using these documents as a basis for refusal!

Thanks
Kim

[NigelHolt]

Kim, I would say that it is beyond any dispute whatsoever that -when it comes to COMPLIANCE- a bank is only entitled to examine the documents called for under the credit.

[KimChristensen]

Jeremy, that was my point as well

Best regards
Kim

ps. still thinking like hell about your 2nd point from yesterday's posting