Should open an L/C in favour of a company named ABC Ltd as beneficiaries. Client requests that the invoices have to be issued by the company ABC ad (both companies are in the same country). We understand that one company is the trading company and the other one the manufacturer. Would this practice be acceptable in your respective banks ?
Roland
issuer of invoice
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RolandLeupi
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- Joined: Fri Apr 05, 2019 5:26 pm
issuer of invoice
Roland,
No it would not, particularly where it was clear they were two different legal entities as appears to be the case here.
Regards, Jeremy
No it would not, particularly where it was clear they were two different legal entities as appears to be the case here.
Regards, Jeremy
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PradeepT_old
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- Joined: Fri Apr 05, 2019 5:25 pm
issuer of invoice
Dear Roland,
Before outrightly rejecting the request, I would tend to ascertain the reasons thereof. Even though commercial invoices must “appear on their face” to be issued by the Beneficiary named in the Credit, under the pretext of “unless otherwise expressly stipulated”, I would not mind opening an LC favouring “A” where invoices are to be issued by “B” as long as Bill of Exchange and/or all other documents are to be issued by “A”. But whether or not, that be the case, there could be cogent reasons therefor, e.g., “A” and “B” may be associates and that might be the arrangement amongst them. It may be noted that the LC is established for account of Applicant who is responsible for his actions and bound to retire the documents if such a clause was inserted at his specific instance. For the same reason, I would accept such LC in the capacity of Advising Bank as well.
Regards,
Pradeep
Before outrightly rejecting the request, I would tend to ascertain the reasons thereof. Even though commercial invoices must “appear on their face” to be issued by the Beneficiary named in the Credit, under the pretext of “unless otherwise expressly stipulated”, I would not mind opening an LC favouring “A” where invoices are to be issued by “B” as long as Bill of Exchange and/or all other documents are to be issued by “A”. But whether or not, that be the case, there could be cogent reasons therefor, e.g., “A” and “B” may be associates and that might be the arrangement amongst them. It may be noted that the LC is established for account of Applicant who is responsible for his actions and bound to retire the documents if such a clause was inserted at his specific instance. For the same reason, I would accept such LC in the capacity of Advising Bank as well.
Regards,
Pradeep
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RolandLeupi
- Posts: 115
- Joined: Fri Apr 05, 2019 5:26 pm
issuer of invoice
Thanks to all,
For Pradeep,
As you mentioned A and B may be associates.......... Much probably but those informations may be known by beneficiaries'bank. My position is that of the opening bank. Would you open something like that ?
Roland
For Pradeep,
As you mentioned A and B may be associates.......... Much probably but those informations may be known by beneficiaries'bank. My position is that of the opening bank. Would you open something like that ?
Roland