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documents presented under LC

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Fri, 09/10/2010 - 05:16
LB
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The beneficiary presented the documents under LC  with the following insturctions:

"we enclose the following for collection. Please handle this collection in accordance with the URC in effect at the time of this transaction, currently ICC publication URC 522".

 

should the bank check the documents? or approach the applicant as requested by BNF on the collection basis ?

 

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Mon, 09/13/2010 - 09:38
#1
tidy
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I also wanted to find out

I also wanted to find out more about it for official registration of my research papers, thank you for the answers!

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Fri, 09/10/2010 - 09:24
#2
LC Sam
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Since the presentation is identified as a collection

Since the presentation is identified as a collection, it should be processed as a collection. 

If it is possible, you may want to contact the beneficiary to see if their intent was to present the documents on a collection basis before approaching the applicant on the collection basis.

Also when you approach the applicant, you need to make sure that they understand that the obligation of the letter of credit is still outstanding and that by accepting the collection, they are still obligated to pay for compliant documents if they are presented under the letter of credit.

I hope this helps you out.

Best regards,

LC Sam

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Fri, 09/10/2010 - 09:52
#3
LB
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more details

the case is that documents quote LC number, not separate collection reference . So it is obvious that BNF presented them under LC, but as the documents are discrepant BNF asks to deal them like a collection.

My intentions concerning these documents are to check them according to LC terms and UCP. Then advise the applicant about the discrepancies and wait for their response. 

one more issue: BNF presented a draft which was not called at all. i will disregard it, but what should I do if I get approval from the applicant? mark it paid, or just leave it as it is 

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Sun, 09/12/2010 - 10:33
#4
Abrar
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Collection

The sensible course of action would be to follow the process as you suggest, (and as advised by LC Sam). However, viewing this on a theoretical basis, if documents are presented under URC, and clarification as to the inetention of the presenter/remitter is not received, the issuing bank should handle documents under URC instead of UCP. However, as a precaution, confirmation should be obtained from the beneficiary to the effect that any payment effected under the collection item is to constitute settlement of a drawing under the LC, and accordingly, that the available LC balance is thus reduced.

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