Some sellers require Fully Funded DLC.
What's the difference between that and the common DLC?
Also, some sellers require unconditional DLC. Does unconditional DLC mean that the seller will be able to cash the DLC regardless of whether he is able to meet the specified conditions of the the DLC? I question the seller and he say it's not like that. He say unconditional in this case means the buyer cannot change the terms of the DLC such as from revolving to non-revolving etc.
Is this true?
Fully funded credits / unconditional credits
Dear grabmail
"Fully funded DLC" are known to me if a bank of reasonably low reputation asks another bank to act upon its nomination i.e. to confirm a letter of credit for a considerable amount and is not prepared to do so without getting a deposit as a security. The seller could ask for it to get a confirmation of the credit.
Maybe that in some local practice the "fully funded credit" has another meaning.
"Unconditional" is usually used in connection with bank guarantees. Whether in this connection or used in connection with credits "unconditional" always only means that the applicant should have no possibility to block the payment by himself. In this respect, joker-clauses such as a document to be issued and/or signed by applicants were not acceptable.
quote
He say unconditional in this case means the buyer cannot change the terms of the DLC such as from revolving to non-revolving etc.
unquote
This is never possible. Under all ICC rules that I know, UCP 400, UCP 500 and UCP 600, the beneficiary has to agree to an amendment which has negative effects for him.
-Each long journey starts with a small step-
Best regards
Frammi