LC REQUEST TWO SETS OF DRAFTS

[THI THUY MYT_]

We recently received an sight L/C from a bank in Bangladesh which requires the beneficiary present two sets of drafts. The first one draws on issuing bank, the second one draws on applicant. This is the first time we get such L/C. Please tell me why two sets of drafts must be presented.

[RolandLeupi]

Since L/C are issued by banks and are there irrevocable engagement to pay we hardly understand in Europe why drafts should be drawn on applicants. Furthermore, ICC has already taken position in this connection.
I can only understand or imagine that in the East or Far East countries this is due to a country regulation. As far as Bangladesch regards, when opening import L/C, when they are available there, beneficiaries are quite automatically granted with a kind of advance in percentage of L/C amount. Much probably the draft requested under export L/C is a need of countryl laws
Roland

[THI THUY MYT_]

Dear RolandLeupi
Thank you for your opinion.
Best regards

[POLTERD.]

The best way to find out is to ask issuing bank, also drawing their attn that upon checking docs you will apply art.9a(iv) of ucp500 considering the drafts drawn on applicant as additional document.
regards and good luck,
Bogdan

[JudithAutié]

Bogdan is right, the best way is to ask for clarification from the issuing bank -- but I would be interested in seeing their reply.

Often in certain Middle and Far East countries a draft drawn on the applicants is requested to "materialize" the liability of the applicant under local law.

Now, under UCP 600 this is going to pose a slight problem, since the new rules clearly stipulate that the draft must not be drawn on beneficiaries -- and does not say that is will only be considered as an additional document.

Regards
Judith

[JudithAutié]

sorry read "draft must not be drawn on applicants" -- getting late here after a day discussing the new UCP )
Judith