1126rev November 2009 Consolidated Final Opinions

More documents

Recommendations

Info

marked as required in the MT799, taking over protocol showed delivery term FCA instead of EXW named place as it was required in original MT700. Bank A sent an advice of refusal by SWIFT MT734 referring to sub-article 16 (c) (iii) (b) of UCP 600, stating discrepancies which all except one related to the amendment sent by MT 799. After L/C expiration, Bank A contacted Bank B to forward documents required by MT799 in order for applicant to resolve customs formalities and clearing of the goods. Bank B forwarded one of the required documents one month later. After receipt of documents, and having not received a waiver from the applicant in a reasonable time, Bank A returned the documents to Bank B. Bank B contested, for the first time, Bank A’s advice of refusal which was sent two months earlier, on the grounds that Bank`s A MT799 cannot be considered as an amendment and that it was not accepted by the beneficiary. Therefore, in Bank B’s opinion the presented documents should have been examined against the terms and conditions stated in the MT700 and the amendment sent by MT707, and that they should be considered as a compliant presentation against which Bank A should pay. NATIONAL COMMITTEE ANALYSIS 1. Could the MT799 be construed to be an amendment message? Sub-article 11 (a) of UCP 600 states “An authenticated teletransmission of a credit or amendment will be deemed to be the operative credit or amendment, and any subsequent mail confirmation shall be disregarded.” 2. Could Bank B, being the nominated bank under the L/C, and asked by Bank A to add its confirmation, be considered a confirming bank as it failed to advise Bank A that it was not prepared to add its confirmation as required by sub-article 8 (d) of UCP 600? Bank B, on its covering letter accompanying the documents, states that it will pay beneficiary at maturity date thus expressing its undertaking towards the beneficiary. Sub-article 8 (d) of UCP 600 states “If a bank is authorized or requested by the issuing bank to confirm a credit but is not prepared to do so, it must inform the issuing bank without delay and may advise the credit without confirmation.” 3. Was Bank B, at the moment of forwarding documents to Bank A, obliged to advise Bank A of the amendments which have been rejected by the beneficiary? – 39 – Document 470/<strong>1126rev</strong>
Also, in accordance with which terms and conditions it has performed the examination of documents, especially having in mind that there were more than one amendment under the L/C? Sub-article 10 (c) of UCP 600 states ''The terms and conditions of the original credit (or a credit incorporating previously accepted amendments) will remain in force for the beneficiary until the beneficiary communicates its acceptance of the amendment to the bank that advised such amendment, The beneficiary should give notification of acceptance or rejection of an amendment. If the beneficiary fails to give such notification, a presentation that complies with the credit and to any not yet accepted amendment will be deemed to be notification of acceptance by the beneficiary of such amendment. As of that moment the credit will be amended.'' Sub-article 10 (d) of UCP 600 states ''A bank that advises an amendment should inform the bank from which it received the amendment of any notification of acceptance or rejection.'' NATIONAL COMMITTEE CONCLUSION An MT799 is an authenticated teletransmission and as such it is to be considered as an operative instrument. Therefore, Bank B must act upon receipt of the amendment sent by MT799 and advise it to the beneficiary. Bank B, being a nominated bank and asked by Bank A to add its confirmation to the L/C, may be considered as confirming bank as it has advised Bank A that it had contacted beneficiary for confirmation (and thus expressed its willingness to do so, if the beneficiary asked for it) and has never advised Bank A of its refusal to add confirmation. Moreover, it has advised Bank A on its covering letter, accompanying the documents, that it will pay the beneficiary at maturity i.e. that it has undertaken an obligation towards the beneficiary. As confirming bank, Bank B was obliged to advise Bank A from which it has received amendments which amendments have not been accepted by the beneficiary and also amendments, if any, to which it has not extended its confirmation (subarticle 10 (b) of UCP 600) thus providing information both to the issuing bank and to the beneficiary as to what terms and conditions will be relevant for checking of documents in order to ascertain whether the presentation is compliant or not. Although a confirming and issuing bank must, on the grounds of the documents alone, conclude whether documents represent a complying presentation, the confirming bank being in direct contact with the beneficiary and also being responsible for checking of documents should advise the issuing bank what are the valid terms and conditions for checking i.e., which amendments have not been – 40 – Document 470/<strong>1126rev</strong>
Page 1: Subject: Document 470/TA.698rev (UC
Page 5: 3. The conclusion of the national c

1126rev November 2009 Consolidated Final Opinions

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?