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Credit available with confirming bank's branch in the same country

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Wed, 03/10/2010 - 09:45
abdul jaleel
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hi, pls. someone can assist me on this :

we have a L/c stating as CREDIT AVAILABLE WITH .... BY PAYMENT. In this car, do we need to submit the documents in our Banker's counter or at the confirming bank's branch office in our country ? Whether we can request our banker to scrutinise the documents & forward to the confirming bank's branch ?  A quick reply would be appreciated.

‹ Additional clause clause 41-a ›
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Wed, 03/10/2010 - 23:20
#1
nhduc.dng
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Branches of a bank in the same country

Hi,

Branches of a bank in the same country is considered to be the same bank.Please refer to ICC conclusions on a similar query quoted below:

R387:

Branches of the same bank in the same country are considered to be the same bank. If a letter of credit is stated to be available with Bank X Branch Y in Country Z, then the documents may be negotiated by that particular branch or any other branch of that bank in the Country Z.

R506:

Article 2 of UCP 500 is quite clear in stating that for the purposes of the Articles in UCP, branches of a bank in a different country are considered to be another bank. It follows that branches of banks in the same country are considered to be the same bank.

Hope you find it helpful.

Regards,

Nguyen Huu Duc

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Thu, 03/11/2010 - 02:26
#2
mic60
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Branches of a bank in the same country

Yes, i agree, I think ICC has left a loop hole by interpreting

UCP 600 Art. (3) "Branches of a bank in different countries are considered to be separate banks."

What about the branches which are located in same country?

Regards

Manish (Mic)

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Thu, 03/11/2010 - 02:57
#3
nhduc.dng
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Manish

Read carefully the above quoted ICC conclusions: ICC Official Opinions R506 and R356.

Regards,

Nguyen Huu Duc

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Wed, 03/10/2010 - 15:31
#4
Abrar
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Confirmation

I'm not too clear on what is being asked, but if the LC is issued in SWIFT format, field 41 would provide the necessary details regarding how the LC is available, and with whom it is available. 

If the issuing bank requests confirmation to be added, it should be aware that a confirming bank is likely to require place of availability to be at the confirming bank's counters, and so the LC will be issued in this manner.

If the confirming bank is not the beneficiary's bank, the beneficiary could still utilise the services of his own bank to provide a document examination and collection service, without engagement, before presenting to the confirming bank, as the beneficiary's agent.

A confirming bank's branch does not enjoy the same status as the nominated confirming bank itself. Branches of banks are considered to be different banks under UCP600.

It is likely that the advice of confirmation would have been issued by a specific bank and branch, and if the LC is available with such bank, it is to this bank and branch that a presentation must be made for the beneficiary to avail itself of the confirmation commitment. 

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Thu, 03/11/2010 - 00:06
#5
abdul jaleel
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few more points required

As written in the L/c under 41 D, it is AVAILABLE WITH CITIBANK BRANCH OFFICE, BY PAYMENT. What we need to know is whether we can submit the documents through our Banker ? Will our bank scrutinise the documents before sending to citibank ? Will the payment be made by the Citibank branch office or it has to be released by the issuing bank ? Pls. clarify thanks.

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Thu, 03/11/2010 - 01:53
#6
nhduc.dng
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The confiming bank must pay ...

Hi,

If the LC is confirmed by and available with Citibank Branch Office by payment, the documents should be presented to Citibank Branch Office for payment.  The confirming bank, i.e. Citibank Branch Office,  must pay if the documents presented are complying.

The documents can be presented to the counter of the confirming bank either directly by the beneficiary or through the beneficiary’s banker.  

In case the documents are presented through the beneficiary’s banker which is not a branch of Citibank or  is a branch of Citibank but not located in the same country, the beneficiary’s banker is acting as a remitting bank only.  The remitting bank  may or may not check the documents at its own discretion but must ensure that the documents must reach  the counter of the confirming bank by the last day for presentation and within the validity of the LC.  Please note that under LC available with a nominated bank by payment,  the LC would normally expire at the counter of the nominated bank.

Regards,

Nguyen Huu Duc

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Thu, 03/11/2010 - 06:04
#7
abdul jaleel
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Hi

Pls. clarify the following:

In an L/c , we are shipping goods partially and when we make an invoice for the goods shipped, the value per unit works out in fractions like 6780.1666, how can we write in the invoice, can we round it off ? If we round it off, the L/c might result in discrepancy saying that we are claiming more and if we claim less too, it might result in L/c discrepancy, kindly clarify this.

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Wed, 03/10/2010 - 11:55
#8
shrabon
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i am also need to be clear about this matter

can you please anyone CDCS or trade expert give a clarification regarding the matter ?

regards 

shrabon 

 

 

 

 

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