we are the applicant for a Standby LC to protect the Beneficiary if we dont pay their invoices.
The bene wants it Advised.
Who pays the Advising Bank Fees?
How does this mechanism work?
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charges will be paid as stipulated in field ( 71b )
but, in case that beneficiary refused to pay any charges or fees the issuing bank remains liable for payment of charges according to article 37 under ucp 600 and consequently will be deducted from applicant's account.
It used to be that overdraft charges were quite simple, in that if a person went into overdraft, instantly a fee of up to $35 per instance was applied. However, big retail banks are beginning to switch to tiered overdraft fees, where the fee amount is dependent upon how much of an overdraft was incurred. Large banks switching to tiered overdraft fees. If you are writing a number of checks and are constantly getting hit with overdraft fees, you might find a different way of paying for things. Tiered fee schedules tend to benefit those who don’t often overdraft, which most consumers actually don’t.
Charges, costs, fees should be contractually stated. Normally applicant pay for the issuing bank costs and beneficiary for the advising bank, a sort of Share, but no hamper to divide them differently. UCP 600 only state who is responsible for this cost, in case of a beneficiary refuses to pay.
Other comments appreciated
Pan, thank you for the response. If the contract value has already been agreed upon and this Advising cost was not included then I believe we will pay it.
Correct me if I am wrong: we issue the SBLC and Bank Advises to bene then bene bank debits our bank for Advising cost who in turn charges us. Do you know if this is correct?
In normal course an SBLC contains a clause for charges, for eg:"ALL BANK CHARGES OUTSIDE THE ISSUING BANK ARE FOR THE BENEFICIARY’S ACCOUNT."...
If you agree to bear the charges as applicant, you may do so by mentioning it while issuing SBLC.
ThankS & Best Wishes
According to reports, banks charged customers fewer overdraft fees in 2011 that in 2010. However, on an average, the fees were higher. The financial research firm Moebs Services released the findings in its latest yearly survey of the overdraft market. You can avoid an overdraft fee if you use an installment loan, which is cheaper most of the time.