Could sb explain 'in simple words' the difference between straight and negotiable LC?
Many thanks.
RO
Straight/Negotiable LC
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RomanOsakowski
- Posts: 1
- Joined: Fri Apr 05, 2019 5:26 pm
Straight/Negotiable LC
My strictly personal comments are:
1. A ‘straight’ credit seems to be an expression used by some bankers to describe a credit that is available with the issuing bank alone (see UCP 500 forum item ‘Straight DC’), i.e. there is not a ‘nominated bank’ or the credit is not expressed to be freely negotiable per sub-Article 10bi. I would anticipate that under such a credit any drafts would be required to be drawn on the issuing bank
2. A credit available by negotiation is one that is expressed to be available by negotiation (per sub-Article 9aiv) either (per sub-Article 10bi) with a specified nominated bank or with any bank (‘freely negotiable’). Again, I would anticipate that under a credit expressed to be available by negotiation any drafts would be required to be drawn on the issuing bank (but this is not always the case in practice).
1. A ‘straight’ credit seems to be an expression used by some bankers to describe a credit that is available with the issuing bank alone (see UCP 500 forum item ‘Straight DC’), i.e. there is not a ‘nominated bank’ or the credit is not expressed to be freely negotiable per sub-Article 10bi. I would anticipate that under such a credit any drafts would be required to be drawn on the issuing bank
2. A credit available by negotiation is one that is expressed to be available by negotiation (per sub-Article 9aiv) either (per sub-Article 10bi) with a specified nominated bank or with any bank (‘freely negotiable’). Again, I would anticipate that under a credit expressed to be available by negotiation any drafts would be required to be drawn on the issuing bank (but this is not always the case in practice).