Hi all
According to definitions of Negotiation under article 2 of ucp 600 :
Negotiation means the purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under a complying presentation, by advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank.
What does " agreeing to advance funds ... " mean ?
I would be garteful if someone give a clear example in this regard .
regards
agreeing to advance
Dear Mehdik, quite recently I have posted following comment to a similar question: "By agreeing to advance the nominated bank already promises to negotiate but the actual purchase has not yet been effected. An example may be a situation where the beneficiary doesn't really need financing up until maturity but needs to be sure that funds will be credited to its account at maturity date without any delay. In case that's a credit in foreign currency it may take one or two days for the funds to be credited to its account. This would be the case when the nominated bank does not negotiate. When it negotiates by agreeing to advance the funds at maturity date the beneficiary is sure to receive funds with same value. " Kind regards Currer