Under 1) and 2), the confirming bank is authorized to add their confirmation. Therefore Art. 8 of UCP 600 applies.
Under no. 3 the confirming bank is not authorized to do so and art. 8 does not apply. Therefore, the legal position of the bank silently confirming is much inferior in comparison to a confirming bank under 1) or 2).
Consequently, the price for a silent confirmation may be slightly higher.
Silent confirmations are used for credits without authorization to confirm them, if the beneficiary feels unwell with the rating of the issuing bank or with the political situation in the country of the issuing bank.
If the Applicant/Issuing bank have not requested the advising bank to add confirmation, the advising bank may "Silently" confirm - in other words they will undertake to pay the beneficairy against credit conforming documents should payment not be received from the issuing bank, but without advising the issuing bank that they have done so.
Confirmation types
Concerning confirmations there are three types:
1) add
2) may add
3) without (leading to silent confirmations)
Under 1) and 2), the confirming bank is authorized to add their confirmation. Therefore Art. 8 of UCP 600 applies.
Under no. 3 the confirming bank is not authorized to do so and art. 8 does not apply. Therefore, the legal position of the bank silently confirming is much inferior in comparison to a confirming bank under 1) or 2).
Consequently, the price for a silent confirmation may be slightly higher.
Silent confirmations are used for credits without authorization to confirm them, if the beneficiary feels unwell with the rating of the issuing bank or with the political situation in the country of the issuing bank.
-Each long journey starts with a small step-
Best regards
Frammi
Silent Confirmation
If the Applicant/Issuing bank have not requested the advising bank to add confirmation, the advising bank may "Silently" confirm - in other words they will undertake to pay the beneficairy against credit conforming documents should payment not be received from the issuing bank, but without advising the issuing bank that they have done so.
Peter M