What Is The Position Of The Issuing Bank?
Posted: Thu Dec 25, 2014 11:31 am
A letter of credit calls for an air waybill evidencing goods consigned to the applicant.
When the issuing bank receives the documents from a nominated bank,
they note a discrepancy therein and provide a refusal notice according to UCP 600 article 16.
However, the applicant takes control over the goods and does not provide a waiver of the discrepancy.
The beneficiary complains that as the applicant has taken control over the goods, the issuing bank must pay un the letter of credit.
--> correct answer : The issuing bank is not in a position to honour.
Why?? I don’t follow.
When the issuing bank receives the documents from a nominated bank,
they note a discrepancy therein and provide a refusal notice according to UCP 600 article 16.
However, the applicant takes control over the goods and does not provide a waiver of the discrepancy.
The beneficiary complains that as the applicant has taken control over the goods, the issuing bank must pay un the letter of credit.
--> correct answer : The issuing bank is not in a position to honour.
Why?? I don’t follow.