The L/C beneficiary can instruct the nominated bank, in case of complying presentation and on receipt of L/C proceeds to effec t a payment to someone else, probably his supplier and to give advice to the latter. In my country, a bank having receive such instruction, will inform the assignee, without any engagement from its part. Normally the transaction has a happy end .
Used when the L/C beneficiary has no funds to buy raw material to prepare its supply: Shoe factory that buys heels or upper soles to manufacture shoes, etc.
I think that the assignement has plus or minus enforcement following the local laws.
An assignment of proceeds is merely a redirecting of the funds (or part of the funds) to a third party when payment under the LC is made. Many suppliers will not accept this method as they have no control - the beneficiary must provide credit conforming documents in order for the payment to be made and if they don't then there is nothing to assign as no payment is received.
UCP 600 art 39
Hi Friend,
The L/C beneficiary can instruct the nominated bank, in case of complying presentation and on receipt of L/C proceeds to effec t a payment to someone else, probably his supplier and to give advice to the latter. In my country, a bank having receive such instruction, will inform the assignee, without any engagement from its part. Normally the transaction has a happy end .
Used when the L/C beneficiary has no funds to buy raw material to prepare its supply: Shoe factory that buys heels or upper soles to manufacture shoes, etc.
I think that the assignement has plus or minus enforcement following the local laws.
Other commments appreciated
Regards and Ciao
Agreed
An assignment of proceeds is merely a redirecting of the funds (or part of the funds) to a third party when payment under the LC is made. Many suppliers will not accept this method as they have no control - the beneficiary must provide credit conforming documents in order for the payment to be made and if they don't then there is nothing to assign as no payment is received.