Home › Forums › Letters of Credit

Transferable LC

1 reply [Last post]
Wed, 09/08/2010 - 03:10
sameertf2010
Offline
Joined: 04/23/2010
Posts:
Printer-friendly versionPDF version

Dear Experts,

Is SWITCH B/L allowed under a Transferable LC, in terms of Article 38 of UCP 600. Can the transfering bank accept the SWITCH B/L presented by the first bene and replace it with the B/L presented by second bene (L/C calls for an Ocean B/L showing the First Bene as the Shipper)

If not, Kindly advise on how the hide the identity of second bene in the B/L (assuming that the first bene and second bene are in different countries and the first bene does not have its office or any representative in the country of second bene and the motive is to hide the names of applicant and second bene from each other).

Many thanks, Sameer 

 

  

 

‹ CODE 41D Available with wordings of transport documents ›
Top
Wed, 09/08/2010 - 05:06
#1
DC_ken
Offline
Joined: 07/21/2010
Posts:
Transferable?

Well, excuse me for meddling into your future business plans, but first of all the purpose of transferable L/C’s is not to hide the 2-nd beneficiary. Second, all the parties involved in this transaction(except probably yourselfs) would agree that this act can be qualified as attempt of deliberate fraud. Under transferable credit your can substitute draft and/or invoice. Switching B/L is possible highly theoretically(based the provisions in UCP 600 where there is no wording “only” or similar concerning substitution of drafts/invoice) but I am sure no bank in the world will allow this.If you insist for “hiding” you can use back-to-back credit but even in this case completing the transaction will require profound understanding and practical skills of L/C’s and international trade documents which you can’t gain without any effort, simply relying on someone else advise or experience.

Top