ICC Digital Library Forum

on the second day of receiving an approval basis docs.,the issuing bank rejected them due to a non significant descripancy,after that the negotiating bank refused the issuing bank's rejection for those docs. ,the issuing bank re checked docs. again and found
a significant descripany that negotiating bank can not refuse,and sent
his new rejection on the 9th. working day after receiving dos. , the question is :can the issuing bank reject docs. sent to him on approval basis on the 9th. working day due to a significant
descripancy, after he rejected them earlier on the second working day for a non significant descripancy that was refused by the negotiated bank,,i hope u can understand what i mean here..

In this instance, I am unsure what you mean by the issuing bank "receiving an approval basis docs".

For my reply, I will assume that the documents have been checked by the "negotiating bank" (no discrepancies found) and have been forwarded to the issuing bank.

In response to your question I would like to point you to Article 14 d & e.

I will paraphrase the salient provisions/points in relation to this post:

1. The issuing bank must give notice of refusal of the documents no later than the close of the seventh banking day following the receipt of the documents.

2. Such notice must contain ALL discrepancies in respect of which the bank is refusing the documents.

3. If the issuing bank fails to act accordingly it shall be precluded from claiming that the documents are not in compliance with the terms of the credit.

This query is educational in nature and is already answered well by Mr. Cullen, the administrator.

ALL PAPER PRESENTATION

In a nutshell, a bank cannot advise discrepancies, whether significant or not, by instalments and must give such advice within reasonable time (to be judged by the court rather than by the UCP) not to exceed 7 banking days (which is not the "reasonable time" as certain bankers interpret).

The latest trend is that a bank would be protected by the so called "3 days safe harbor" concept from USA bankers, as far as reasonable time is concerned.

ALL E-PRESENTATION

In the eUCP now under the drafting stage, the reasonable time for exlusive e-presentation (that means no paper documents presented) will be reduced to only 5 banking days.

We are from www.tolee.com

[edited 7/6/01 4:27:05 PM]

thanks for the adminstrator and mr. tolee for their kind replies, but what i ment was: if an issuing bank receives
complied docs. by the negotiating bank
and reject those docs. on the second working day acting as art. 14, but the negotiating bank refuses the descrepancy
that was found by the issuing bank as it was not a major one,then the issuing bank re checks those docs. on the 9th. working day and found again another major descripancy that neither him nor the negotiating bank had
noticed in the first place,so can the issuing bank rely on his past rejection
to those docs. which the was refused by the negotiating bank and make another
rejection to those docs. relying on major descripancy this time ,using his rejection made on the second working day,or we consider this new descripancy was found after the reasonable time (7 days).so can issuing bank match the 2 descripancies found or not?

The issuing bank must list ALL discrepancies in their notice of refusal of the documents.

After giving this notice of refusal, the issuing bank is precluded from re-checking the documents in an attempt to find more discrepancies.

So, even if more discrepancies are found at a future date they can not be taken as reason not to make settlement under the credit.

I support the further opinions from Mr. Cullen. As I have said, refusal notice by instalments is not acceptable. The second refusal notice, even if the new discrepancy is fatal, does not count.

PICTURES SPEAK LOUDER THAN WORDS

The first answers from both of us are quite clear (we hope Mr. Cullen would agree this) and yet our messages cannot go across because we use words not pictures.

Not only that pictures speak louder than words, pictures can increase our recall rate better than words.

Our training experience is that, instead of asking the participants to memorise the "Ten Commandments" in LC operations, we would use an image approach.

SCENE FROM THE MOVIE "HIGH NOON"

Now Mr. MohdKelany, imagine that your enemy, Mr. Bank, has only one silver bullet left in his gun, and he must kill you, Mr. Bene, who also dates his girl friend. If his bullet does not hit you right in the heart or the head, or just hitting your left arm, then you would walk away with his money (the LC drawing) and his girl friend, Miss Interest, too (due to delays in payment, spending too much time arguing through SWIFT messages between the banks).

We hope you will understand better this time (please confirm this). So LC should not necessarily be a boring thing. It all depends on how you treat it.

For Mr. MohdKelany, never mind whether the second bullet fired at the 9th banking day is effective or not. Because there should not be any bullet left in the gun after the first firing on the 2nd banking day. Along wtih a badly aimed first shot, Mr. Bank's silver bullet, after landing on your body, has transformed into a bullet-proof vest made by Preclusion Inc. under a category name of Article 14 (e).

"WALK AWAY WITH THE MONEY AND HIS GIRL FRIEND IF YOU WILL" SHOUTED JOHN WAYNE

You may now take the money and the girl friend if what you told us is the true and complete story with ALL material facts disclosed (that means no other cow boy is also pointing his gun at you). Sometimes a consultancy customer never tells us that another cannon is pointed at him (maybe he is not aware of this). We have to find this out from the documents.

We are from www.tolee.com

[edited 7/8/01 5:26:37 PM]
[edited 10/26/01 3:29:59 AM]