Can we make payment to two benefeciaries in one L/C.
Can we prepare a L/C to allow payment to two beneficiaries in one L/C? For expample suppose the L/C is issued for USD 500,000/- and can we instruct to make the payment to party A USD 400,000 and party B USD 100,000 against submission of one signle invoice of USD 500,000 from the first beneficiary?
If so in which field we need to provide the instructions?
Hi Friend,
In some l/c we are used to pay the exporter and commissions to agents that dealt the transaction. We request a beneficiary's authorization to pay 4 or 5 % of the invoice value to an agent located in ....... or we insert a clause that the l/c is valid for 95% in favour of the exporter and 5% in favour of the agent ....Naturally the invoice has to be issued for 100%. So I think it is possible to effect different payment in one l/c, a part following the the called Compliance Rules as per KYC, atriot Act etc.
Other comments appreciated
Ciao
We can take the beneficiaries authorization. If we take such an authorization, in which field we can frame the payment. If so how?
Or as a second option of 95% in favour of exporter and 5% in favour of agent.. in which field we frame the payment and how?
I understood the invoice for 100% value of the L/C need to be issued by the beneficiary.
Hi Friend
we request, among other documents.
-beneficiary's payment order to credit 5% in favour of M/s....out of proceeds.
So when we pay the l/c we debit the applicant for 100%, we credit the beneficiary for 95% and the agent for 5%.
However, you can build up an l/c, in the way that you need as terms could be changed, but naturally you have to satisfy the need of beneficiary, applicant and banks involved.
Please could you specify your need, your case, so we can give you,probably, a solution?
Ciao
The following are the scenario.
We need to issue an L/C for USD 500,000 which is including the agents commission which is USD 10,000.
The Beneficiary is ready to issue an Invoice for 500,000 and all documents for negotiation shall be prepared by the beneficiary.
We want the agents commission to be paid from the L/C to the agent directly without any interference of the beneficiary.
Instead of getting Beneficiary's payment order, can we put an instruction in the L/C? What, if the beneficiary does not want to issue a payment order how this could be sorted out? Is there any other solution?
Hi Mohandas,
you are describing what happens in my experience. We have to fix who is bearing the costs/ commissons of the Agent. If the invoice is 100% and you receive only 95% costs are for you. if you invoice for 95% and you receive 95% are for you too. If you invoice 100%, you receive 100% and 5% is paid a part its the buyer that bears this cost. When all is clear you can word l/c accordingly. I saw all types of the a.m. ways to solve the problem. In this period of time I sa: Invoice 100%, Agent commission 5%, net proceeds 95%.but in the past: Invoice 100 less 5% discount, paid for net amount, than the issuing bank provide to pay 5% to the agent, probably located in issuing bank's Country.
Ready to help you, naturally free, please contact me at
picchi.antonio@virgilio.it
Ciao
You can achieve this by obtaining an assignment undertaking from the nominated bank in favour of the agent. The bank provides a written undertaking to pay the agent providing they receive funds from the issuing bank under the L/C. Using this method the beneficiary is still responsible for presenting the full credit complying documentation and the nominated bank must pay the agent the agreed sum as long as they receive funds.
The agents risk here is that the beneficiary does not manage to present credit complying documents and the documents and goods are rejected by the buyer.
Assignment of Proceeds is allowed as per UCP. Proceeds can be assigned to different people and performance under the credit should be from one party.(means submission of documents)
This is from new provider i just got agreement to work with. They are highly classified financial players in the world. The leasing Fee is 14% closed to Lessor side. We never and will not entertain long broker chain. If you are the end Lessee or direct to the Lessee, then we can work. If you are direct to your client, then you will need to sign an FPA with the client for your commission. 14% leasing fee is closed to Lessor side. The provider accepts payment plan 8% to be paid once clients recieves and confirms swift MT760 BG and remaining 6% to be paid within 20 - 30 days.
Here is a simple explanation on how our instruments work with our Provider/investor(s) / Procedures;
We will send a package which you will complete and send back to enable the Investor(s)/provider issue a contract. When you are sent a contract from our investor(s) you will be entering into a Joint Venture (JV) instead of a lease as this will help you to better use the instrument for your needs without it being questioned or it called a leased instrument. The sole purpose why our investor(s) do this is to help the clients have a successful transaction on their projects. What our investor(s) require is once you get the JV Contract, have your team and attorney review the contract before signing. Then if you are ready to commit to the JV simply sign the contract and return to us and when you return the contract in to use let us know if you will require an MT199 Invoice of the transaction sent to your bank from our investor(s) bank. This will activate a credit line if you are using one, plus it will let your bank know that a transaction between you and the investor(s) is pending to close, then your bank will need to set up MT103/23 for the retainer fee as per the MT199 instruction/invoice/contract that was sent to your bank from the investor(s) bank and then show confirmation for the MT103/23 being set in place at your bank to cover the fee's of the JV Contract. These fee's are not released until the investor(s) has sent your instrument via SWIFT MT760 and then your bank officer has verify and once verification is done and approved, then the MT103/23 turns hard and the fee's are released to your JV Investor for the use of the SBLC, BG that you contracted for.
If you will take a copy of the JV Contract to your bank, the bank officer can contact the JV's bank officer to let him/her know that an MT103/23 is being placed on behalf of a JV Contract. This JV Contract gives you, the client, value and opportunity because you are now being a JV with a very well known large Investor(s). After you have shown your new JV Partner that you are ready to commit to your JV Contract, the investor(s) is very flexible to help you with completing the contract so that both parties are in a Win-Win and now you will be ready to start your new transaction as you stated from the start of the process.
Remember you are now Joint Venturing with an investor(s) who has the funds you desire to use, so in all purposes, this is not called a lease but instead a JV Partner for proof of funds ability in a form of an SBLC, BG.
Inform of you have interest, genuine and capable with funds to close.
Justin
JB Financial ServicesTel: 0044 2070603236 Mobile: 00 44 702 4055 110www.jbfinancialservice.co.ukwww.bgsblc.homestead.comemail: jonathanberry@jbfinancialservices.orgemail: justin_inc@ymail.com
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