Dear sir,
we issued a letter of credit and advised it by SBC UK. later we were asked to confirm the credit and reached negotiation with HSBC Uk. now we need to advise the amendment via HSBC which is also the confirming bank now.my questions are -
do we require to issue an amendment to support this confirmation given that the credit is available with any bank?
if we by pass SCB, what are the potential problems?
if we ask SCB to use HSBC as second advising bank, would it be a violation of UCP 600 9d?
Bypassing an advising bank
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Judith
- Posts: 118
- Joined: Thu Mar 12, 2009 8:59 am
inform all parties
1. do we require to issue an amendment to support this confirmation given that the credit is available with any bank?
A: It is not mandatory for you to amend the credit in this manner. It is up to HSBC to decide if they need this amendment (and in my opinion, they should ask for this amendment!)
2. if we by pass SCB, what are the potential problems?
A: There may be potential problems if the LC is available with any bank. If SCB is under the impression that they are receiving all the amendments and they check the documents against what they think is the “latest version” of the LC, there might be some issues.
However, this can be easily overcome if you inform all parties i.e. SCB, HSBC and the beneficiary that future amendments will be routed through HSBC.
3. if we ask SCB to use HSBC as second advising bank, would it be a violation of UCP 600 9d?
A: In my opinion – no. (Especially, if no other second advising bank was used so far.)
A: It is not mandatory for you to amend the credit in this manner. It is up to HSBC to decide if they need this amendment (and in my opinion, they should ask for this amendment!)
2. if we by pass SCB, what are the potential problems?
A: There may be potential problems if the LC is available with any bank. If SCB is under the impression that they are receiving all the amendments and they check the documents against what they think is the “latest version” of the LC, there might be some issues.
However, this can be easily overcome if you inform all parties i.e. SCB, HSBC and the beneficiary that future amendments will be routed through HSBC.
3. if we ask SCB to use HSBC as second advising bank, would it be a violation of UCP 600 9d?
A: In my opinion – no. (Especially, if no other second advising bank was used so far.)
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bdesh
- Posts: 56
- Joined: Sat Jun 20, 2009 3:01 pm
- First Name: Hafizur
- Last Name: Rahman
- Organization: Southeast Bank Ltd
- Filter: Two Plus Two =: 4
- Location: Dhaka
Bypassing Advising Bank
[*] Yes you require amendment. The amendment for confirmation by HSBC & available with HSBC
[*] As per art. 9d of UCP600, you cannot bypass SCB. If you do so, you that will be violation of UCP600.
[*] No.
[*] As per art. 9d of UCP600, you cannot bypass SCB. If you do so, you that will be violation of UCP600.
[*] No.