Discrepancy Charges

[sagar1984]

Lc has a clause stating that discrepancy charges of usd 50 will be deducted in respect of discrepant documents.

Upon presentation of documents discrepancy was advised to negotiating bank and subsequently
Negotiating bank sent rectified documents along with swift message for waiving of discrepancy raised within lc expiry date.

Question :

Upon maturity should discrepancy charges of usd 50 should be deducted from bill proceeds
Or full proceeds should be remitted to beneficiary as revised documents were presented within lc expiry date?

[gt_sen]

If the Rectified documents are acceppted by the issuing bank as CLEAN docs, discrepancy charges should not be deducted.

[shahriar]

what could i say. my bank just received a payment under a transferred LC. we are the 2nd beneficiary's bank and the LC is available with us by negotiation. all banking charges are on 2nd benefciary's account. now here are the charges

1. Negotiation Commission: USD 212
2. Commission Charges: USD 24
3. Postage Charges: USD 54
4.Correspondence Charges: USD 15.00
5. Discrepancy Charges: USD 60.00
6. Transfer LC Charges: USD 348
7. Issuing bank charges: USD 335

hummm...interesting. Transfer charges are more than LC issue charges.

the transferring bank wrote one thing in the LC. we will remit fund only after receving payment from the issuing bank.

[Jackie]

Hello

Sharihar - those charges do seem a little excessive. We often see l/cs which we have requested by advised through a first advising bank as we do not hold RMA with the beneficiary's bankers for which American banks charge "non utilisation charges" of USD150.00 upwards! Easy money me thinks.

As for the original question. Could the discrepancy charge be interpreted as a SWIFT charge? Even if documents have been rectified and are now considered to be clean, the bank has sent a SWIFT and incurred charges?

Jackie

[fionawang]

Although The doc. be rectified, it's not in one set. the discrepancy fee still need to charge.

[loankim]

Hi all,
While i tagree that the issuing bank can deduct a discrepancy fee as some friends mentioned, we can also refer to another consulting opinion in FAQ.16.7 / Collyer Consulting.
Query: "After the issuing bank informed their refusal to honour, due to the discrepancy, the nominated bank presented new document, within the presentation period, which complied with the credit ...Can the issuing bank collect their discrepancy fee as they advised details of the discrepancy at the time of first presentation ? "
Answer: "...The issuing bank would be entitled to deduct a discrepancy fee due to the fact that they had observed an initial discrepancy in the first presentation ".
.
other comments welcomed !

rgds,

[ibnejafar]

Dear All,
Its the matter of services rendered, once the L/C Issuing bank has scruitnized documents and found them discrepant, the charges for that are due and will be deducted from proceeds-its actually not the negotiation b/t charges its the right for services.

Regards,
Ibnejafar

[picant]

Hi Pals,

If the bank works, it has a right to be paid, the problem is when, having written on l/c that discrepant documents will attract a fee of USD...., this bank will deduct USD.. without advising discrepancies to the presenting bank. The issuing/confirming/nominated bank can obtain such money only if they properly act and have costs, otherwise is a ......

Other comments appreciated.
Ciao


PS, In the past banks sent a sort of"Confidential Tariff" for their services, Is it this good behavior still in use, in the bank website, perhaps...