Dear all,
Would you be willing or reluctant to open a DC in favour of several beneficiaries in light of art. 1 (modified) and art. 3 (singular, plural)
Daniel
beneficiary(ies)
beneficiary(ies)
Daniel, the provisions of UCP600 would not affect my willingness to issue a credit (more likely a standby) in favour of more than one beneficiary. I would be more concerned about ensuring the credit's / standby's terms made clear what my bank's obligations were to the various beneficiaries.
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HOANGTHIANHTHU_invalid
- Posts: 189
- Joined: Fri Apr 05, 2019 5:15 pm
beneficiary(ies)
Hi Daniel,
Frankly speaking, never during my 20 years involved in LC world have I seen LC issued in favour of multiple beneficiaries.
Some experts claim it is possible to issue one LC in favour of more than one beneficiary, especially when it is a standby LC, but they also claim that it is too complicated and not practical at all.
To avoid complexities it is advisable to issue a separate LC for each beneficiary.
Best regards,
N.H. Duc
Frankly speaking, never during my 20 years involved in LC world have I seen LC issued in favour of multiple beneficiaries.
Some experts claim it is possible to issue one LC in favour of more than one beneficiary, especially when it is a standby LC, but they also claim that it is too complicated and not practical at all.
To avoid complexities it is advisable to issue a separate LC for each beneficiary.
Best regards,
N.H. Duc
beneficiary(ies)
NHD,
I can ssure you multitple beneficiaries is, in principle, a doddle (= easy).
Regards, Jeremy
I can ssure you multitple beneficiaries is, in principle, a doddle (= easy).
Regards, Jeremy
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HOANGTHIANHTHU_invalid
- Posts: 189
- Joined: Fri Apr 05, 2019 5:15 pm
beneficiary(ies)
Hi Jeremy,
One expert shared in another LC forum his experience in working on an LC that has one applicant and two beneficiaries.
Here is how he did:
1. The letter of credit indicated both parties as beneficiaries.
2. The letter of credit indicated that either party could draw under the letter of credit up to the total amount of the letter of credit less any previous drawings done by either beneficiary.
3. The letter of credit required the presentation of the sole original letter of credit.
4. The letter of credit indicated that the original was sent to beneficiary A and a copy to beneficiary B. It also indicated that the beneficiary that did not hold the original in its possession must collect the original from the other beneficiary for a drawing.
5. The letter of credit indicated that once a drawing was submitted, the letter of credit would be endorsed by the drawing amount and returned to the presenting beneficiary.
I made the same comment to him as I did in this forum. He reacted that it was a very special circumstance which his bank could completely control as the LC was a domestic standby LC which was available with his bank, and that he would not suggest making the issuance of multi-beneficiary LCs a normal practice.
There is also another discussion on “multiple beneficiaries” in this forum. Mr. T.O Lee’s comment is worth reading.
Best regards,
N.H.Duc
One expert shared in another LC forum his experience in working on an LC that has one applicant and two beneficiaries.
Here is how he did:
1. The letter of credit indicated both parties as beneficiaries.
2. The letter of credit indicated that either party could draw under the letter of credit up to the total amount of the letter of credit less any previous drawings done by either beneficiary.
3. The letter of credit required the presentation of the sole original letter of credit.
4. The letter of credit indicated that the original was sent to beneficiary A and a copy to beneficiary B. It also indicated that the beneficiary that did not hold the original in its possession must collect the original from the other beneficiary for a drawing.
5. The letter of credit indicated that once a drawing was submitted, the letter of credit would be endorsed by the drawing amount and returned to the presenting beneficiary.
I made the same comment to him as I did in this forum. He reacted that it was a very special circumstance which his bank could completely control as the LC was a domestic standby LC which was available with his bank, and that he would not suggest making the issuance of multi-beneficiary LCs a normal practice.
There is also another discussion on “multiple beneficiaries” in this forum. Mr. T.O Lee’s comment is worth reading.
Best regards,
N.H.Duc
beneficiary(ies)
Jeremy, NHD,
Thank you very much
Daniel
Thank you very much
Daniel