ICC Digital Library Forum

L/C requires that Insurance Cert must stipulate that claims are payable in the currency of the draft.

If the cert (and draft)is in issued in usd:

a) is there need for this statement to mentioned at all

b) is it enough for the cert to mirror the l/c and state verbatim 'claims are payable in the currency of the draft'

c) should it state 'claims are payable in usd'

I'm assuming that such statement is necessary because foreign currency might not be easily available at destination and the buyer, in the event of a claim, might have to receive proceeds in local currency (is this assumption correct?)

I see a lot of certs issued as per b) but believe that c) is the correct form as the statement in b) is meaningless without reference to the currency in which the draft has been drawn.

Therefore I've started to reject these certs but, as anticipated, I am experiencing problems in convincing beneficiaries that this is a discrepancy.

Any views?

Phil
[edited 1/29/2004 1:22:28 PM]

Phil,

Hope things are funkadelic with you.

Personally speaking, and without liability/responsibility, based on the requirements of the credit I agree with your approach, i.e. c) is what the credit stipulates. Your example b) is an illustration of how literal compliance with a credit can create a discrepancy. (Another example being a credit that states ‘shipment from a European port’ and the b/l states ‘Port of loading: European port’.)

Jeremy

I agree with C also. It comes under the same general approach as a letter of credit stating "goods should be new ..etc" and you get a statement saying exactly that. As I once said to a beneficiary "I should be young rich and beautiful -- marry me". The "should" will get you every time !
)

Judith

This is similar to the age old problem of drafts citing "At 30 days B/L date pay...". These are not acceptable & neither are insurance certs. referring to the currency of the drafts, especially when one considers that the draft will not travel to the applicant for comparison, but be retained by the confirming or issuing bank.

Laurence