ICC Digital Library Forum

L/C term: Either, 60 days from acceptance ,or 60 days from the B/L date (two different scenario)
Drawee: Issuing bank
Available with any bank by negotiation

Beneficiary presented a credit conform documents to its bank under a commercial L/C (subject to the UCP 600), and requested them to discount the bill, prior to issuance bank's acceptance of it.

My question is can a beneficiary's bank (which is also a nominated bank by virtue of Article 2of the UCP 600) negotiate a bill and pay to beneficiary, and then forward full set of documents to the issuing bank for their acceptance and maturity date.

Ofcourse interest for usance period will be on the beneficiary's account.

In that case will the beneficiary's bank get UCP protection ?

Regards,

Shahed

Your message describes a negotiation by a nominated negotiating bank of a complying documentary time draft drawn on the issuer (and forwarding to the issuer). So, yes, that should obligate the issuer to reimburse on the maturity date under UCP600. Regards, Jim Barnes

Hi Shahed,
What you described in your query is a perfect example of negotiation in the way as it is defined by UCP and as it had been in usage for years and years. Unfortunately, later some banks started to use the term "negotiation" for a number of different things except real negotiation...
So, yes, if you are a nominated bank (and in case of a freely negotiable credit it seems so), you are authorised to negotiate credit conform documents and are eligible to reimbursement by the issuing bank. If you so agree with the beneficiary, then in a perfect case you negotiate before even knowing whether the issuing bank received and/or accepted the draft or documents. If you do not want to take up examination risk, you may as well negotiate after issuing bank's acceptance (there is nothing contrary to it in UCP600), but in such case I believe you did not state in your covering letter that you "negotiated"...
Regards, Radek