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Availability (41a) vs Instructions (78)

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Mon, 10/12/2015 - 01:57
felix_peter
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Dear all,

following issue:

1. We are the beneficiary

2. LC is available with our bank (41a) by payment

3. 42c says drafts at sight

4. drawee is issuing bank

5. field 78 says: "upon receipt of docs at our counters in conformity with terms and conditions of the LC we shall paay you as per your instructions as per payment terms."

6. No confirmation instructions

7. LC is confirmend on a silent basis

In my understunding this is not consistent. However, issuing bank doesn't allow any amendmends to be made. What's you opinion on this?

May there be a situation, which could lead to some trouble? For example: docs are 100% compliant (to our bank). Our bank sends docs to issuing bank and ask for payment. Issuing banks says it won't pay, because LC wasn't used properly. Like our bank was not comliant with LC as it didn't pay right away,

Looking forward to your feedback!

Thanks,

Felix

 

 

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Tue, 10/13/2015 - 22:17
#1
pan
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Joined: 09/13/2007
Opinions

 Hi Friends,

 

the involved opinions are R548(TA566rev) and R651(TA639rev), the opinion cited by Phil recalls the same concept.

Then UCP 600 art 35 is involved too. In few words, in a credit available with nominated bank, a complying presentation to that bank, undertakes issuing bank to reimburse, to pay said bank even if documents are lost in transit.

This overrides the sentence:"On receipt of complying documents to our counters we will......" or the like.

Other comments appreciated

Ciao

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Mon, 10/12/2015 - 22:10
#2
pan
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Joined: 09/13/2007
Payment instructions

Hi Friend,

 

in effect, if the l/c is by payment and you are nominated , the issuing bank must instruct you to effect payment and, immediately obtain cover of your giving. So you have to ask issuing bank to amend such instructions.

Otherwise inform the beneficiary that you will settle the presentation with recourse.

There is an ICC opinion concerning the place where the l/c is available that override any reimbursement instructions, but it is better to be clear at beginning than dispute at the end.

Other comments appreciated

Ciao

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Tue, 10/13/2015 - 04:18
#3
felix_peter
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Joined: 10/12/2015
Thanks for your reply. Do you

Thanks for your reply. Do you know by any chance the reference of the ICC opinion you are refering to?

Or can you quote it?

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Tue, 10/13/2015 - 16:13
#4
phill doran
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Joined: 02/10/2009
possibly ICC TA 717 rev2...

Hello Felix_Peter

It is possibly ICC TA 717 rev2. I do not have a copy of the paper but this link is to an article on the contents.
As hyperlinks do not work in the text on this board, so you will need to 'cut and paste' the following link into your browser.

http://internationaltradeservices.in/availability.htm

My apologies in advance if this is not the paper you seek.

Cheers
phill
“...in the kingdom of the blind; what you see is what you get...”

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