Currency of Back to Back Letter of Credit

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SumonAlam
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Currency of Back to Back Letter of Credit

Post by SumonAlam » Tue Apr 25, 2017 1:10 pm

I am going to issue an LC to my supplier. My supplier will issue a back to back LC to his supplier.
My question is, whether I have any scope to include a clause mentioning the currency to be used in back to back LC of my supplier as per UCP or any other applicable rules?

Seeking Suggestion
Md. Sumon Alam

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picant
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IMHO...

Post by picant » Tue Apr 25, 2017 6:38 pm

Hi Pal,

the transactions are not so linked, but the bank issuing a back to back l/c will probably count on the originarly l/c as guarantee, so this bank may require to keep same currency.
Frankly I don't see the issue!
Other commets appreciated
Ciao

SumonAlam
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Currency of Back to Back Letter of Credit

Post by SumonAlam » Wed Apr 26, 2017 12:46 pm

Thanks a lot Picant.

Last year we have issued an LC to one of our supplier. And our supplier issued an LC to his supplier in another currency. Master LC issuing bank (our bank) accepted this issue. But that arises some problem related to endorsement of documents. Thats why now we want include this provision for avoiding complexity.

Sumon Alam

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picant
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Sorry ...

Post by picant » Sat Apr 29, 2017 11:10 pm

Hi Sumon,

what kind of problem? The exchange rate was not sufficent to cover the goods or?
Please explain? Ciao

SumonAlam
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Currency of Back to Back Letter of Credit

Post by SumonAlam » Tue May 02, 2017 10:25 am

Dear Picant,

We have issued LC in USD Currency to our supplier. But our supplier issued LC in EUR to his supplier.
Goods entered in our country in EUR value and we have to endorse documents in EUR Currency, though our LC is in USD.
That is not coincide with our LC currency.

Sumon Alam

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