L/C Overdrawn

[bdesh]

HI,
We, the Issuing Bank, have received shipping dox from nego bank having L/C overdrawn by USDxxx.
Due to technical reason we are not willing to receive goods or effect payment for the overdrawn value.
We gave discrepancy/refusal notice to the nego bank mentioning

even if the docs are accepted by the applicant we shall not make payment for the overdrawn amount

Mentionable here that the goods to be imported against Back-To-Back L/C i.e. raw materials to be imported for export purpose. So, excess goods will be troublesome for us.
We mentioned in the notice that unless we receive any contrary msg from nego bank before releasing docs to applicant, we will release docs to applicant.
.
Can we endorse the docs now?
.
bdesh

[picant]

Hi Pals,

Your action is to refuse document in total or not, isn't ?
as per art 16 c iii b you are holding documents and you will deliver them to applicant....... but only if you paid them in full.
please clarify

Ciao

[bdesh]

Hi,
Does the art. 18 b of UCP-600 supersede art 16 c iii ?
Thanks & regards

[picant]

Hi Pal,


Banks may accept a commercial invoice issued for an amount in excess, but the payment of said excess is not contingent to the delivery of documents. This is because L/C could represent a part of the payment of the supply, a part could be paid in advance and/or after in any ways. But the presenter must clearly indicate that balance will be or has settled outside l/c. Naturally, not knowing full details of this transaction, we can give unproper answer.

Let me know.

Ciao