Drafts and who to draw on

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surge1977
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Joined: 05/05/2009
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Apologies for needing further clarification on this but if anyone could definitively fill in the blanks here iw ould be very grateful.

1. Usance Confirmed l/c available with confirming bank by negotiation. Drafts should be drawn on.......?  

2. Usance Confirmed l/c available with confirming bank by acceptance. Drafts should be drawn on.......?

Thanks

uplift
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Joined: 05/14/2009
Drafts and drawees

This posting is just written to uplift an interesting theme above the fraudulent entries.

Many thanks fr your understanding

Uplift

phill doran
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Joined: 02/10/2009
no text (done to move topic up forum)

cheers

phill doran

one hill at a time, please

tulsi's picture
tulsi
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Joined: 04/09/2008
Draft on Confirming Bank

I am supporting Mr. Peter.

Regards

Tulsi 

 

Peter M
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Joined: 09/02/2008
Drafts

In both cases they should be drawn on the confirming bank because they are confirming.

nhduc.dng
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Joined: 06/14/2007
Draft drawn on confirming bank

Dear Peter M,

1) Under an LC available by negotiation with the confirming bank, the draft should be drawn on the issuing bank or another bank other than the confirming bank. This requirement is complying with the definition of negotiation in UCP 600 Article 2, which says " Negotiation means the purchase by the nominated bank of drafts (DRAWN ON A BANK OTHER THAN THE NOMINATED BANK) ... ". 

However, in practice the fact that the draft is requested to be drawn on the confirming bank under LC available by negotiation is quite common.

If the draft is on the confirming bank, the confirming bank must PAY (not negotiate) though the L/C is available by negotiation.

2) It is agreed that the draft should be drawn on the confirming bank under the L/C available by acceptance.

Best regards,

Nguyen Huu Duc

Tradeknowledge
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Joined: 02/22/2009
Draft on Confirming Bank

Nguyen Huu Duc comments are correct. Old habits never change and training is sparce. When drafts are drawn on you, the obligation is that the drawn on party must "pay" them, you cannot "buy" an obligation you already have.

Frammi
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Joined: 08/17/2007
Agreed!

But under export L/Cs also look at the relevant fiields of the credit. It will stipulate on whom the drafts are to be drawn.

   -Each long journey starts with a small step-

Best regards

Frammi

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