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we are bit confused. we issued a letter of credit at the request of our valued client. the credit terms were designed strictly as per request of the client. the credit was issued on 18th. for some reason we were only able to transmit on 19th. on the same day we received a set of document from a bank by DHL. later we realized the matter. the client insist on designing clause as per its request because the documents were already ready and ask the beneficiary to send it being unaware of the fact that the credit was yet to be advised. the document is otherwise in order except the fact the presenting bank certifies on the forwarding letter that all terms and condition of the LC have been complied. our question is -

is this presentation under UCP or URC?
can a bank negotiate and certify so even when the credit is not advised?

1. Is this presentation under UCP or URC?
Ans: If there is any indication in the presentation that the dox were negotiated before advising the credit, the presentation would be under URC, otherwise under UCP.
2. Can a bank negotiate and certify so even when the credit is not advised?
Ans: No.

bdesh wrote:negotiating before the advising of the credit

Negotiating Bank has to endorse original LC.You may clarify with Neg. Bank for the came.

There is no harm to treat the docs. under LC if covering Schedule mentioned under UCP.

jabra wrote: is this presentation under UCP or URC?

Really interesting case friend. What does the remittance letter of the presenting bank indicate? It is expected to contain a clause about which rules that it is subject to. I think URC.

Dear all

dox can either present under ucp and urc rules upto nego bank covering schedule referred.
but in otherhand in case nego bank do not received original l/c which advice from adv bank or
themselves have been present together with other dox for nego at their counter I think
they will not be negotiate under ucp rules but will treat as urc rules.

thks

When issuing bank finds that documents where received before advising the letter of credit, issuing bank can reject the documents stating original lc not presented, if the presentation under the ucp,
on the part of negotitating bank, without receipt of original lc unless the nego bank is advising bank
will not certify the terms, endorsement cannot be done for negotiatibility and their is risk of same lc being usied in different bank for negotiation. hence document wil be sent in urc only

Dear,
Here I furnish below my logic:
according to sub article 7(b) of UCp 600:
"an issuing bank is irrevocably bound at the time of issuance of credit"
the term "issuance" is not define in the UCP, but according to ISP 98 sub article :2.03
a standby is issued when it leaves issuer operational control.......
.
here our present case, credit leaves issuer operational control...... so thereby according to sub article 7(b) of UCP 600, issuing bank irrevovably is always standing from that point. from this moment to later, issuing bank must abide by its undertaking and obligated to honour if presented document constitute complying presentation.
.
Question of endorsement on reverse side is an action between nominated bank and issuing bank. One can not refuse to honour on the pela of that. However, in all cases, if the beneficiary makes a direct presentation to the issuing bank...how come endorsement on the reverse side come into existance.
.
Important note:
1. In our present case, an issuer must take all pre caution as if beneficiary make a direct presentation....
.
awaiting for other reply.
regards
nesar