UCP 600 Article 9: Advising of Credits

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Article 9 UCP 600 is a combination of Article 7 and Article 11b UCP 500. Article 9 however emphasizes stronger than before that a bank advises "without any undertaking to honour or negotiate".  

 

The obligation of the advising bank remain: 1) examine that the credit or an amendment are apparently authentic(see Article 9 b), and2) check that the advice "accurately reflects the terms and conditions of the credit or amendment received." The revision stipulates that the advising bank should satisfy itself in regards to the apparent authenticity. This language is stronger than Article 7 b UCP 500 which only required that it "shall take reasonable care to check the apparent authenticity of the Credit which it advises".

 

If the advising bank cannot satisfy itself as to the apparent authenticity of the credit it must inform, without delay, the bank from which the instructions appear to have been received (see Article 9 f UCP 600). The duty to inform  without delay applies equally in case a bank asked to advise a credit elects not to do so (Article 9 e UCP 600). 

 

An innovation is the concept of a second advising bank (Article 9 c UCP 600): "An advising bank may utilize the services of another bank".

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Case Banco BPN Portugal (100% Caixa Geral de Depositos)

Dear All,

Look at the subject case by clicking on http://www.forfaiting.ch/sfc/ and then "case BPN". This is a 100% governmental owned bank in Western Europe. For your information documentation was accepted and acceptance protocol duly signed from the Portuguese importer. This case proves that the commitment to pay from issuing banks under the "Latest ICC - UCP Rules" is by far too weak. This LC is still unpaid since 2007!

Banco BPN (100% Caixa Geral de Depositos), Lisboa

Dear All,

Look at the subject case by clicking on http://www.forfaiting.ch/sfc/ and then "case BPN". This is a 100% governmental owned bank in Western Europe. For your information documentation was accepted and acceptance protocol duly signed from the Portuguese importer. This case proves that the commitment to pay from issuing banks under the "Latest ICC - UCP Rules" is by far too weak. This LC is still unpaid since 2007!

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The concept of the second advising bank is relatively new and I don't think it helps much, it just makes the bureaucracy work even slower than before. Thanks for keeping us informed though, I know that I'll need this kind of information, even sooner than I planned since I am now considering credit card consolidation.

First advising bank didn't advise to second advising bank

Dear L/C Specialist,

 

I have a question regarding to the first advising bank holding L/C without advise L/C to the beneficiary through the second advising bank.

At the beginning of June our issuing bank has sent one L/C to its intermediate bank in Singapore but at the end of June the beneficiary complain they have not been advise. After we check we found out that the first advising bank hold this L/C and try to contract the beneficiary directly event in filed 57D stated clearly about who is the second advising bank. Now, the goods has not produce and the shipment will be delay. Our client will penalty about $5,000.00 coz of this delay. So it’s possible to claim this damage from the first advising bank or claim direct from our issuing bank. Please advise me who will responsible for this damages, and which article state about this responsible in UCP or ISBP.

 

Thanks for your kindly feedback. I’m looking to hearing from all of you soon.

 

Best regards,

Issarariddhi,

 

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