CDCS Questions

[malla]

hi,
could anyone help me to find right answers to these questions?


Q1:
Bank I receives documents under an L/C it has issued on 6th march.Bank finds the documents
to be discrepant.which of the fallowing notice of refusal sent by Bank I is valid?
[7th march is friday,Bank Idoes not work on saturdays and sundays,there are no bank holidays]

a) Amessage sent on 13th march by tele-transmission stating "we received your documents presented
under our L/C.however we refuse to pay as the documents are discrepant.meanwhile we are
holding documents at your disposal.
b) message sent on 12th march by tele-transmission stating "we refuse your presentation a the
documents the fallowing discrepancies-late shipment,partial shipment.we are return the documents
by courier.
c) Amessage sent on 16th march through tele-transmission stating "we refuse payment as the
documents contain the discrepancy late shipment.we are holding documents pending further
instructions.

Q2:
An L/C in which partial shipment is prohibited is issued for USD 100,000 with a tolerance +10%applicable.subsequently an amendment is issued reducing the L/C value to USD 90,000.The beneficiary did not expresssly communicate his acceptance/rejection to the amendment,however ,presented documents for USD 98,000.Then,
a) the beneficiary has accepted the amendment and documents presented are clean.
b) the presentation is clean though beneficiary's acceptance/rejection is not determinable


I HOPE TO GET THE RIGHT ANSWER WITH AN APPROPRIATE REASON.


Regads
malla

[TLO]

Hi Malla,

Question No.1- How many working days in a week in your country? If your country is worked from Monday to Friday, then Ans 1 & 2 are acceptable. Please refer to UCP 600 that L/C issuing bank has 5 working days to decide whether they intend to refuse the documents.

Question No. 2 - If beneficiary unwilling to confirm acceptance of amendment decreasing amount. You can tell from the invoice amount whether they accept the amendment or not. Say if the invoice amount of this transaction is USD89,000.00 then I believe the beneficiary is absolutely accepted the amendment. If the invoice amount is USD108,000.00 that the amendment is definitely refused by beneficiary. For safety sake, it is recommended to ask for a written statement from beneficiary that the amendment is rejected.

Cheers

[Armagedo]

malla

Q1: only (b) is acceptable since only it meets conditions of UCP600 articles 14 (b) + 16 (c) (i) + 16(c)(ii) + 16(c)(iii)(c)

[iLC]

i agree with armagedo on answer of question 1.

on question 2 i will go for answer B.

98000 is within the tolerance limit of both the original LC and the the amendment. since partial shipment is not allowed, we will never know whether the beneficiary has accepted or rejected the amendment. in fact such cases, i do not bother to know that.

[malla]

i agree with armagedo on answer of question 1.

on question 2 i will go for answer B.

98000 is within the tolerance limit of both the original LC and the the amendment. since partial shipment is not allowed, we will never know whether the beneficiary has accepted or rejected the amendment. in fact such cases, i do not bother to know that.

hi
thank you for the replay.but,
if the amendment is not accepted,it would be between USD100,000 to USD110,000.
if the amendment is accepted,it would be between USD90,000 to USD99,000.
beneficiary presented the documents for USD98,000.
then,how would it be within the tolerance?

expecting further clarification

regards
malla

[malla]

malla

Q1: only (b) is acceptable since only it meets conditions of UCP600 articles 14 (b) + 16 (c) (i) + 16(c)(ii) + 16(c)(iii)(c)

HI armagedo,
Thank you for the clear information.but still i have few doubts in my mind.

first thing,in Q1,what exactly the presentatin date? The question is like this"Bank I receives documents under an L/C it has issued on 6th march....."..is 6th march presentation date?
in my opinion,i feel 6th march is L/C issued date so there is no presentation date given.now,
we have to cheack the valid refusal notice as per 16(c) without concerning the five banking days.

second thing,if we treate 6th march is the presentation date,
16(c) says "that the bank is refusing to honour or negotiate".but,in Q1 option (b) says "we refuse your PRESENTATION.....".
what does "refusing presentation" mean?
does it mean refusing honour or refusing negotiation?

appreciate further clarification.
expecting answer for Q2 also



regards
malla