Can documents received from a nonnominated bank be considered discrepant for that reason?
Will place and date of expiry remain in this case in the country of the nominated bank or both be automatically shiftedto be at the counters of the issuing bank ?
Non nominated Bank
-
KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Non nominated Bank
As for the first part kindly explain a bit more. I am sorry but I am not sure I understand what you are aiming at.
As for the second part I think you will find your answers in UCP 600 article 6.
Best regards
Kim
As for the second part I think you will find your answers in UCP 600 article 6.
Best regards
Kim
Non nominated Bank
Hi AAtiyeh,
The answer to your first question is "no". The definition of Presenter in UCP anticipates that documents may be presented through a third party that is not a party to the credit, whether this be a bank or a non-bank entity. It's the documents that are important, not who presented them.
Your 2nd question indicates that in the example you have the L/C is available and expires at the counters of a nominated bank. This will not change but Art 6 states "A credit available with a nominated bank is also available with the issuing bank".
Furthermore, UCP Art. 7a states that the issuing bank must honour if the documents are presented to either the nominated bank OR the issuing bank.
The issuing bank must honour such a presentation if the documents comply with the credit.
You should not, however, make payment to a third party unless you have due diligence on them and you have an assignment of proceeds from the beneficiary.
Rgds
The answer to your first question is "no". The definition of Presenter in UCP anticipates that documents may be presented through a third party that is not a party to the credit, whether this be a bank or a non-bank entity. It's the documents that are important, not who presented them.
Your 2nd question indicates that in the example you have the L/C is available and expires at the counters of a nominated bank. This will not change but Art 6 states "A credit available with a nominated bank is also available with the issuing bank".
Furthermore, UCP Art. 7a states that the issuing bank must honour if the documents are presented to either the nominated bank OR the issuing bank.
The issuing bank must honour such a presentation if the documents comply with the credit.
You should not, however, make payment to a third party unless you have due diligence on them and you have an assignment of proceeds from the beneficiary.
Rgds
-
GlennRansier_
- Posts: 132
- Joined: Fri Apr 05, 2019 5:19 pm
Non nominated Bank
If your bank is not a nominated party then you have no protections under UCP 600 to honour or negotiate the documents (Any prepayment actions you take would be between you and the beneficiary only). You can be a presenting bank but the documents must reach the expiry place on or before the expiry date and you and the beneficiary will have no protections should documents become lost in transmission because the documents were not mailed by the nominated bank.
These are the considerations when you are not a nominated bank.
These are the considerations when you are not a nominated bank.
Non nominated Bank
Dear Kim Christensen - Denmark
Suppose that you have issued an L/C in favour of a beneficiary in country X and got same advised through a nominated bank in the same country. The beneficiary elected to make his presentation to a non nominated bank in country X who despatched the presentation to you within the L/C validity and presentation period . upon examining that presentation you had not noticed any discrepancy except that presentation has been made to the non nominated bank.
can you now reject this presentation on this basis arguing that you are now the nominated bank under the protection of article(6DII) and accordingly place and date of expiry are automatically shifted to be at your counters ?
Suppose that you have issued an L/C in favour of a beneficiary in country X and got same advised through a nominated bank in the same country. The beneficiary elected to make his presentation to a non nominated bank in country X who despatched the presentation to you within the L/C validity and presentation period . upon examining that presentation you had not noticed any discrepancy except that presentation has been made to the non nominated bank.
can you now reject this presentation on this basis arguing that you are now the nominated bank under the protection of article(6DII) and accordingly place and date of expiry are automatically shifted to be at your counters ?
-
KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Non nominated Bank
I guess that technically speaking dispatching documents to a non-nominated bank is not a presentation (see the definition in UCP 600 article 2).
If there is a nominated bank (which may be “any bank”), the beneficiary can choose between presenting the documents to the nominated bank or directly to the issuing bank. A presentation to a non-nominated bank does not “trigger” the obligation of the issuing bank to honour the presentation. However; if the documents are subsequently presented within LC validity/presentation period to the issuing bank by that non-nominated bank and complies with the LC – the issuing bank is obligated to honour.
The fact that the presenter is not a nominated bank is surely not a reason to refuse the presentation.
So to quote K.T. Fung from the latest DCI (available on DC-Pro right now): “Any party including a non-bank, can act as a presenter”.
Best regards
Kim
Ps. Beneficiaries should be aware (as Glenn suggests) that dispatching documents to a non-nominated bank who are to present to the issuing bank – may provide unexpected situations; e.g. if the documents are lost in transit … but I guess that is another discussion.
If there is a nominated bank (which may be “any bank”), the beneficiary can choose between presenting the documents to the nominated bank or directly to the issuing bank. A presentation to a non-nominated bank does not “trigger” the obligation of the issuing bank to honour the presentation. However; if the documents are subsequently presented within LC validity/presentation period to the issuing bank by that non-nominated bank and complies with the LC – the issuing bank is obligated to honour.
The fact that the presenter is not a nominated bank is surely not a reason to refuse the presentation.
So to quote K.T. Fung from the latest DCI (available on DC-Pro right now): “Any party including a non-bank, can act as a presenter”.
Best regards
Kim
Ps. Beneficiaries should be aware (as Glenn suggests) that dispatching documents to a non-nominated bank who are to present to the issuing bank – may provide unexpected situations; e.g. if the documents are lost in transit … but I guess that is another discussion.
Non nominated Bank
Dear Kim Christensen,
what if beneficiaries handed over his documents to the non nominated bank who despatched same to the issuing bank within the relative L/C validity and presentation period,but received at the counters of the issuing bank after the expiry date ? Is the issuing bank still obligated to honour ?
what if beneficiaries handed over his documents to the non nominated bank who despatched same to the issuing bank within the relative L/C validity and presentation period,but received at the counters of the issuing bank after the expiry date ? Is the issuing bank still obligated to honour ?
-
KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Non nominated Bank
On that subject, see also Opinions 84-86 R95, 87-88 R150 and 95-01 R416
Regards
Daniel
Regards
Daniel
Non nominated Bank
It is also possible for a credit to be available with an issuing bank in one country but to expire at the counters of a bank in the country of the beneficiary.
This is a different set up to the norm as expiry and availability have been separated, i.e., credit usually expires where the credit is available.
In such a case, the beneficiary can present documents to the bank in the country where the credit indicates that it is to expire.
(Not a nominated bank)
The documents are then forwarded to the Issuing Bank by this bank. The issuing bank should honour if the documents comply - even if received after the expiry date.
Such a set up is unusual but possible and depends on the wording of the credit.
This is a different set up to the norm as expiry and availability have been separated, i.e., credit usually expires where the credit is available.
In such a case, the beneficiary can present documents to the bank in the country where the credit indicates that it is to expire.
(Not a nominated bank)
The documents are then forwarded to the Issuing Bank by this bank. The issuing bank should honour if the documents comply - even if received after the expiry date.
Such a set up is unusual but possible and depends on the wording of the credit.