ICC Digital Library Forum

I wish to point your attn to a transferable d/c I received. It is available with any bank by negotiation and states under 47A that:
"This l/c is transferable. Transfer request,if any, are restricted to the advising bank herein designated the transferring bank and any transfer request must be accompanied by the original l/c, and a notation of the transfer must be duly made on the reverse of the original l/c by the transferring bank.
Notice of any transfer, including the name and country of the transferee, must be sent to us by either the transferring bank at the time of transfer or the negotiating/presenting bank must certify that docs presented are from the transferee and no substitution of docs from the 1st bnf is required.
Until such notification is received by us, we will not pay against any draft/invoice issued by a party other than the named bnf of the l/c" .
In my opinion this reflect poor understanding of transferability.
Also I would be tempted to discourage such condition (included by a first rank bank).
Your opinions will be highly appreciated.
Thank you very much and best regards,
Bogdan

Bogdan,

It is unclear to me why you consider that this provision reflects a poor understanding of transferable credits. If you explain why you think this is the case I might be able to comment.

Jeremy

Bogdan,

I suppose that it is the fact that the applicant will know the name of the second beneficiary which is annoying for you.
Daniel.

The following is what I understood from the clause:

Since the LC is transferable and available by negotiation with any bank and in case documents of the 2nd beneficiary must be presented to the issuing bank for payment, the issuing bank seems to require a confirmation from either the document presenting bank and / or the transferring bank that the second beneficiary (stating the name and address) is the party to whom the credit is actually transferred.

In accordance with UCP 600 article 38k, 2nd beneficiary documents must be presented to the transferring bank by or on behalf of the 2nd beneficiary. No direct presentation to the issuing bank by bypassing the transferring bank is anticipated. Therefore, for such situations where the 2nd beneficiary documents must be presented to issuing bank without substitution, by first beneficiary of invoice and draft, the transferring bank is required to confirm to the issuing bank the name and address of the second beneficiary as the party to whom the credit is transferred.

regards
Abdulkader