A Beneficiary Of L/C Sends Shipping Documents Directly To The Applicant

snk · Post by **snk** » Thu Apr 23, 2015 4:11 pm

Dear Experts,
A beneficiary of L/C sends shipping documents directly to the applicant without troubling banks..? Can an issuing bank release payment directly to BENEFICIARY account..?
If it does so what precautions are there ..?
1.in case a subsequent claim for payment is recieved through banking channel.

Regards,

picant · Post by **picant** » Sat Apr 25, 2015 1:04 am

Hi Pal,

notwithstanding that a credit is valid in any way at issuing bank, this bank may have some problems in paying a direct presentation.
Other comments appreciated
Ciao

mskhan42 · Post by **mskhan42** » Mon Apr 27, 2015 4:19 pm

hi,
Yes, we have effected payment in past, but you have to taking care following:

1. if l/c is avaialble with any particular bank and also beneficiary hold their account with that bank
in payment message i.e. MT103 you have to mention 'payment under l/c ref: ........... effected to the beneficiary
with consent of applicant,beneficiary and issuing bank' and also highlight payment to be credited to the beneficiary's
account after your authenticated swift message that original l/c instrument has been endorsed with USD.... (i.e.
documents value/payment amount)

2. if l/c is avaialble with any bank, in payment message i.e. MT103 you have to mention 'payment under l/c ref: ...........
effected to the beneficiary with consent of applicant,beneficiary and issuing bank' and also highlight payment to be
credited to the beneficiary's account after your (beneficiary's bank) authenticated swift message that original l/c
instrument has been endorsed with USD.... (i.e. documents value/payment amount) and issuing bank can reduce their
undertaking by USD....

Regards,
Muhammad Saqib Khan

snk · Post by **snk** » Wed May 13, 2015 1:43 pm

thank you very much..sir

gegeeee · Post by **gegeeee** » Wed May 13, 2015 4:36 pm

Deat Snk,

It depends on your good Banks internal procedures. In my Bank due to the AML and KYC we should anyway had problem for direct payment. Solution would be to represent it again via Nom bank. Direct presentation to issuing bank is also possbile as if credit is avaialbe with Nom bank is also avaialable with issuing Bnak under ucp but anyway it depends on internal procedures.

Gega

mohiuddin · Post by **mohiuddin** » Tue May 26, 2015 12:17 pm

Hi!

Yes issuing bank may allow make payment. But before payment issuing bank must check:

i) If said LC is available with named bank- then issuing bank must send SWIFT message to the named bank and ensure that issuing bank received document from LC applicant which was sent by Beneficiary's.

ii) AML & KYC, Customs Certified Bill of Entry ( i.e. proofed of received of goods and pass by respective customs authority) etc.

After satisfaction by the issuing bank than allow said payment.

Mohiuddin

Shams · Post by **Shams** » Wed May 27, 2015 10:09 am

Dear sir
As per UCP 600, Article -6 [a] "A credit available with a nominated bank is also available with the issuing bank"
credit is available with the IB beneficiary must present the document as per credit availability. otherwise payment will be hampered. Credit available means beneficiary will get payment from the availability place.

on the other hand, UCP 600 aticle-2 "..................that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation"
Credit means irrevocable and definite undertaking of the Issuing bank. it is not a definite undertaking of the applicant. so Beneficiary must present the documents to issuing bank through nominated bank or directly issuing bank.

Shamsuddin
Bangladesh

Shams · Post by **Shams** » Wed May 27, 2015 9:19 pm

Dear
Yes Issuing bank can do. As per UCP 600. article-2,
Presenter means a beneficiary, bank or other party that makes presentation"
Applicant may be a presenter, If applicant present the document to the Issuing bank, Issuing bank can do, subject to complying presentation.
Precautionary measure
A. Complying presentation
b. Checking Bill of lading

Applicant present the documents to the issuing bank, so presentation already done. Subsequent claim not possible through banking channel.
Shams
Bangladesh