Hi all, I have some points I need to work-out with you friends. If issued LC and transmitted to Beneficiary Bank, and Docs are prepared, my question is :
1)IF this was By Negotiation, Is it Always the tenor is sight, or can by By Negotiation 30 days sight, or 30 days after B/L date..
2)If this was By negotiation Sight, Does the Nominated Bank pays first to Beneficiary by discounting it, or they claim it from Issuing Bank then pay the beneficiary?
3) If this was By negotiation and confirmed, Who pays first to Beneficiary, the Nominated Bank or Confirming Bank or Issuing Bank.
4)If this was By acceptance, 30 days sight, Could it be also negotiated(i.e. discounted) or what is it?
5) At what status will the Nominated Bank and/or confirming Bank pay the beneficiary first then claim it from the Issuing Bank?
THanks^^
answers not exhaustive
Hi Friend,
some answers :
1-I think that negotiation is only at sight, but it is commonly accepted negotiation at .... days.
2-Negotiation means to advance its own funds by granting a credit facility a) if without recourse to the issuing bank, b) if with recourse to the beneficiary/presenting party. If you give the proceeds received from issuing bank, by debiting her or claiming funds from reimbursing bank the l/c is by payment.
3-Beneficiary could receive funds from nominated bank but only as advance, confirming and issuing bank have to honor.
4-yes, as per art 12 b, remember that acceptance means to grant credit facility to issuing bank, a sort of delayed confirmation.
5- IMHO, when credit is available by payment.
As already said, it is complicated to summarize in few lines all the problems you pointed out.
Hoping to have been useful and wait for other, welcome, comments,
Ciao