dear sir,
recently we have received a LC which says that
1. issuing bank reserves the right to deduct 15% from the proceeds, at applicant' instruction, if the goods are not as per the standard of the buyer without any further notice.
2. issuing bank reserves the right to deduct 15% from the proceeds, at applicant' instruction, if the is any unsettled due between the applicant and the the beneficiary without any further notice.
3. the invoice must show this discount. if not shown, issuing bank will deduct it from the proceed.
please advice what should we do with this LC.
right to deduct from proceed
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TLO
- Posts: 19
- Joined: Thu Jan 14, 2010 3:14 pm
- First Name: TONY
- Last Name: LO
- Organization: Societe Generale
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right to deduct from proceed
Hi Nura,
The terms expressed in your question is so called 'conditional L/C'. You can remind the beneficiary whether they have agreed
in their purchase/sale contract or a mutual agreement between them. The best way to do is to alert the beneficiary of the conditions stipulated in the credit or simply ask for a acceptance letter from the benficiary if you are nominated as the negotiating bank.
Cheers
The terms expressed in your question is so called 'conditional L/C'. You can remind the beneficiary whether they have agreed
in their purchase/sale contract or a mutual agreement between them. The best way to do is to alert the beneficiary of the conditions stipulated in the credit or simply ask for a acceptance letter from the benficiary if you are nominated as the negotiating bank.
Cheers