ICC Digital Library Forum

AAA is the applicant and BBB is the beneficiary of a transferable L/C.
One of the required docuemnt read "Beneficiary's signed statement that 1/3 original B/L has been forwarded to the applicant within 5 days after date of shipment".
Which of the following requirement should be used for advice of transfer?
1) Exactly as per original L/C.
2) BBB's signed statement that 1/3 original B/L has been forwarded to AAA [with full address] within 5 days after date of shipment.
3) Transferee's signed statement that 1/3 original B/L has been forwarded to AAA [with full address] within 5 days after date of shipment.
Note: Transferor is fully aware that buyer and seller's information (except pricing) will be disclosed under the B/L requirement, therefore, disclose of both side information is not a question.
Appreciate your opinion.

[edited 3/4/2005 10:01:43 PM]

See Issue 6 relating to sub-Art 48(c) in ‘Transferable credits and UCP 500’ (Commission on Banking Technique and Practice, October 2002) under ‘ICC Policy Statements’ on the right.

We would request the issuing bank to amend the D/C in " second beneficiaries declaration.." so to be in line with UCP which allow substitution only for the invoice and draft.
This will also avoid any problem in case of negotiation since for the issuing bank the beneficiaries is not the same that the one of the transferring bank

Roland, no offence meant, and I certainly do not want to discourage you from contributing to the discussion forum, but I am surprised at your bank’s practice. Issue 6 etc referred to above -by me- makes quite clear, I believe, that where a transferable credit expressly requires a document to be issued by the ‘beneficiary’, when the credit is transferred that document must be issued by the second beneficiary (and thus the transfer must stipulate this). (“If the credit were to be transferred, the requirements listed under "Issue"* would need to be completed by the second beneficiary …”.) This also seems perfectly logical. As a result I cannot see that there is any risk of not ‘be[ing] in line’ with the UCP. If it is thought that there is any danger of the issuing bank wrongly refusing a document because it is issued by the second beneficiary, surely it is a simple matter to include an explanatory note in the covering schedule?

* “Beneficiary's certificate stating that Original Mills Test certificates have been sent directly to the applicant by DHL courier service within 5 working days from shipment”.

Jeremy
I am not offenced at all, but feel uncomfortable; not discouraged also to participate in the future to the forum because of the received answer. People dealing in the field of our activity always faces problems, new issues, uncertainties. The participation to the forum clearly demonstrates this evidence. I am more concerned about your mentionning "your surprise at our bank's practice". Please take due note that it is not our bank's practice but the practice used by all banks dealing within this specific area.
The issuer of documents under a D/C as well as the data content of the document is clearly specified in the UCP (art,31(iii), art. 21, art. 23 to 30, art. 34 to 36 and art. 37. The fact that a D/C is transferable or transferred does not alter anything to those rules. The presentation to the issuing bank of a first beneficiaries'invoice together with a second beneficiaries'declaration is discrepant. The opinion given with the Issue 6, the Opinion R. 456 or the ruling UCP do not alter my position.
Roland

Roland,

Glad to hear that you are of a robust disposition. No need therefore for me to ‘pussyfoot’ around.

It is not my own banks policy to ‘request the issuing bank to amend the D/C in " second beneficiaries declaration.."’. Therefore your statement that it is ‘the practice used by all banks dealing within this specific area’ is not correct.

If my interpretation of the ICC Policy Statement is correct then that is saying that a document issued by the second beneficiary is acceptable, therefore notwithstanding the general terms of the UCP or the articles that you quote above. Of course, I am quite prepared to consider the possibility that my interpretation is wrong or even that the policy statement is wrong. (Curiously, Issue 6 etc. does not seem to actually reflect Opinion R456, at least as published on DC-Pro.) However, my impression is that you are simply not prepared even to take account of what the ICC Policy Statement actually stays.

Anyway, we’ll just have to agree to dis-agree as to whether the presentation to the issuing bank of a first beneficiaries' invoice together with a second beneficiaries' declaration is discrepant.

Jeremy