Article 9c and Article 37c

asamaha · Post by **asamaha** » Thu Jan 03, 2008 12:00 am

Article 9 (c) authorizes an advising bank to utilize the services of a second advising bank to advise the credit and any amendment to the beneficiary.

Article 37 (c) stipulates that a bank instructing another bank to perform services is liable for any charges incurred by that bank in connection with its instructions.
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This means that the issuing bank is ultimately liable to pay those second advising bank charges even though the credit does not indicate any second advising bank thru which the credit is to be advised to the beneficiary.
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Your comments Pls.

My best wishes to all DCPro members

Antoine

BilselTatar · Post by **BilselTatar** » Thu Jan 03, 2008 12:00 am

Dear Antoine;

Since the advising bank has the right to utilize the services of another bank to advise a credit and any amendments thereto, then the advising bank is liable for the charges incurred by the second advising bank as per sub-art. 37-c of UCP 600. Please also note that sub-artc. 37-c does not specifically refer to the issuing bank.

Regards.

asamaha · Post by **asamaha** » Thu Jan 03, 2008 12:00 am

Implicitly it does.

In this sub art. 37c. :

"a bank" means either the issuing bank or the first advising bank,

"another bank" means either the first advising bank or the second advising.

regards
Antoine

NigelHolt · Post by **NigelHolt** » Thu Jan 03, 2008 12:00 am

Antoine,

I agree that 9(c) does appear to allow an advising bank to employ at its sole discretion -i.e. in the absence of any express instruction from the issuing bank- a second advising bank and that as a result of 37(c) the issuing bank would therefore be responsible for the 2AB’s charge.

Regards, Jeremy

THI THUY MYT_ · Post by **THI THUY MYT_** » Tue May 20, 2008 1:00 am

I find out something in connection with this issue.
With Art 37, item c, 3rd paragraph, suppose L/C state that:
”Advising bank's charges are for ben's account. LC must not be released if advising bank can not collect its charges from ben”; in this case, when advising bank release/advise L/C without collect their charges, and then can they claim back their charges from issuing bank?

Pls give me some idea about this case.
Tks in advance for your comment.

JudithAutié · Post by **JudithAutié** » Thu May 22, 2008 1:00 am

Hold it there my friend, don't forget that the UCP article 37c third paragraph also says that the advising of a credit or amendment to the beneficiary should not be conditional on receipt of the various banks' charges.

regards
Judith

THI THUY MYT_ · Post by **THI THUY MYT_** » Wed May 28, 2008 1:00 am

Dear Judith,

I agree with you,it is only encourage us should not do that.
But whatif L/C emphasize that:
"Advising bank's charges are for ben's account. L/C must not be released if advising bank can not collect its charges from ben” (pay attention in "must")

So, it is a conditional!

DanielD · Post by **DanielD** » Fri May 30, 2008 1:00 am

Antoine,

The Commentary (P. 156 second paragraph):" The first paragraph of sub-article (c) makes clear that the issuing OR ADVISING bank is ultimately responssible to the bank to which it transmits a credit and any amendment thereto for any of that bank's charges in connection with the credit, any amendment or any associated services rendered." So advising bank would be liable.
Daniel

SvetlanaS · Post by **SvetlanaS** » Tue Jun 10, 2008 1:00 am

My interpretation is that the advising bank would be liable to the second advising bank but should the advising bank not pay the second advising banks charges then the issuing bank remain liable.

Svetlana