ICC Digital Library Forum

We recently set up an L/c with a bank in Italy for delivery of furniture for a new hotel.
Partial shipments permitted.
On the schedule of the first set of documents presented they stated 'subject to ICC 522'
We therefore treated them on a collection basis.
We have since been advised that the Italian bank made a mistake and the schedule should have been subject to UCP 500.
Given that the treated the first presentation as a collection are we entitled to treat all future presentations under the L/C as collections?

Dear Peter,

So many rules ...

I take it that you are the issuing bank – and that the L/C is subject to UCP 500. The fact that the Italian bank made a mistake in the first presentation does not change that. You are still bound by your L/C, and must treat future presentations according to UCP 500 and the wording of the credit.

My personal view without responsibility – liability.

Best regards
Kim

Peter,

the applicant is likely to make a dangerous assumption in the given circumstances.
For example - LC opened for $100k,
presentation under URC for $50k. Applicant, if deciding to accept presentation under URC, should only do so upon agreement of the beneficiary to a reduced value by means of amendment to $50k. Otherwise the applicant may assume that his exposure is $100k, but in fact it is $150k ($50k under URC + $100k under UCP). The possible exposure for the bank is obvious.

Laurence