“Pre-summer-vacation-ICC-Opinion-Review” #3


The third “pre-summer-vacation-ICC-Opinion-Review” is R741 / TA700rev that deals with charges – and who is to pay them – and who is not to pay them:

 

Quote

Title: Who is to pay the charges?

 

Links:

UCP 600: article 16 and 37

ISBP 745: N/A

Topic: Fees and charges

 

Details of the query and ICCs answer:

Who is to pay the charges in the following situations?

 

Situation A:

The LC states:

 “all charges outside country X are for account of beneficiary”

(“Country X” is the country of the issuing bank)

 

There is no reference to other charges to be for account of beneficiary.

Documents were forwarded with discrepancies to the issuing bank, and subsequently refused by issuing bank notice.

Upon payment the issuing bank deducted a discrepancy fee.

Is the issuing bank entitled to deduct these charges?

 

ICCs answer:

If issuing bank want to deduct a discrepancy fee, then this must be stated in the LC.

 

Situation B:

The LC states

 “All charges outside country X are for account of beneficiary”

(“Country X” is the country of the issuing bank)

There is no reference to other charges to be for account of beneficiary.

 

Upon payment the issuing bank deducted “Telex / SWIFT” and “reimbursement commission”.

Is the issuing bank entitled to deduct these charges?

 

ICCs answer:

Charges for effecting the payment under the LC should not be for account of the beneficiary. If a fee is to be levied it should be charged to the applicant.

 

 

Situation C:

The LC (available with the issuing bank by deferred payment) states:

“All charges outside country X are for account of beneficiary”

(“Country X” is the country of the issuing bank)

There is no reference to other charges to be for account of beneficiary.

 

A complying presentation was forwarded to the issuing bank. The covering letter stated

“Please confirm that you incur your undertaking to pay stating maturity date by authenticated SWIFT”.

 

Upon payment the issuing bank deducted “Telex / SWIFT” costs.

 

Is the issuing bank entitled to deduct these charges?

 

ICCs answer

There is no difference of opinion between different types of availability.

Charges incurred based on actions taken by the issuing bank, at the request of the presenter, are for account of the presenter. This applies even where such charges are not expressly referred to in the LC for account of the beneficiary.

 

Situation D:

The LC states

“All charges outside country X are for account of beneficiary” and

“For documents presented with discrepancies, issuing bank’s discrepancy fee of USD 50, shall be deducted from remittance”

(“Country X” is the country of the issuing bank)

 

Documents were forwarded with discrepancies to the issuing bank, and not refused by the issuing bank.

Upon payment the issuing bank deducted a discrepancy fee of USD 50.

Is the issuing bank entitled to deduct these charges?

 

ICCs answer:

The issuing bank is entitled to a discrepancy fee as outlined in the LC.

They should however inform the presenter of the discrepancies. This can be either in the advice of payment or in a separate communication.

Note that the issuing bank is not required to refuse the presentation if they contact the applicant for a waiver and receive same.

Article 16(f) does not apply in this case.

 

 

Full transcript

This review is written by LC Views.

For the full transcript of the Official ICC Opinion please contact ICC Books or DC-Pro.

Reference:

Official Opinion R741 / TA700rev - 2009-2011

Unquote

 

There are other ICC Opinions that deals with charges. Links to reviews of those can be found at the lcviews premium page “UCP 600 Article 37 Disclaimer for Acts of an Instructed Party”

 

For more information: http://www.kimsindberg.com/lcviewspremium.html

Sign up for lcviews: http://lcviews.com/index.php?page_id2

 

& remember to take care of each other and the LC

 

Best regards

Kim

 



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LCViews - “Pre-summer-vacation-ICC-Opinion-Review” #3