Telex authority to negotiate

[GSham]

UCP does not provide for negotiation of discrepant documents on the strength of issuing bank's authorization via authenticated SWIFT. Hence there is a risk that I/B might renege on its authorization, and refuse the documents upon presentation. Is this risk mitigated by the fact that sender of authenticated SWIFT is bound by its undertaking stated therein?

[NigelHolt]

The UCP presumably does not cover this because it should be glaringly obvious that, by definition, if a nominated bank has asked the issuing bank by SWIFT for authority to negotiate or honour non-compliant documents (specifying in the request what are the discrepancies) and the issuing bank grants it, the nominated bank will be in the same position as if it had negotiated or honoured complying documents (provided it has not missed any discrepancies).

You may also find opinion TA.690rev4 of interest.

[edited 2/24/2011 11:15:27 AM]