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field 71B L/C

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Sun, 10/09/2016 - 22:36
hwang
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Joined: 10/09/2016
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Hi Experts,

We have the following clause in our L/C but I don't really understand what it means for us:

IF L/C IS NOT UTILIZED ARTICLE 37C OF ICC IS NOT APPLICABLE. OUR CHARGES FOR FIRST UTIL. ARE FOR APPLICANT AND FOR NEXT UTIL. ARE FOR THE BENEFICIARY.

Could you please give me a brief explanation?

Thank you.

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Mon, 10/10/2016 - 01:43
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Abrar
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Joined: 03/12/2009
37C

I am not sure of your role in the LC. IIf you are the beneficiary and have received the LC direct from the issuing bank, the clause is ambiguous.

If you are the beneficiary and have received the LC via an advising bank or if you are the advising bank, the issuing bank is ensuring that if the LC is not utilised, the advising bank will not be able to able to claim its outstanding fees from the issuing bank as would have been the advising bank's right under the provisions of sub-atrticle 37C.

However, the second sentence requires clarification What charges would the issuing bank claim under a second or subsequent utilisation and why should such charges be payable by the beneficiary in any case?  

 

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