Technical Advisory Briefing No. 9
Recently the ICC have issued Technical Advisory Briefing No. 9.
The subject for the briefing is direct presentation of documents to an Issuing Bank under a documentary credit subject to UCP 600.
As always, the Technical Advisory Briefing is published (free of charge) by the ICC and can be found at the ICC Digital library here.
The scope of the new briefing is the situation where a presenter may deliver the LC documents directly to the issuing bank, bypassing the nominated bank.
A main question raised in that connection is if the issuing bank has a responsibility to inform the nominated bank of such “direct” presentation.
Here are some highlights from the new briefing:
Reference is made to ICC Opinion R518 (TA519rev) which states:
“Where a credit has been made available with a nominated bank, the beneficiary may elect to present documents directly to the nominated bank or to the issuing bank. Presentation to the issuing bank is an acceptable act on the basis that it is the issuing bank that has provided its undertaking to honour complying documents.”
If the presentation is made directly to the issuing bank, the undertaking of the issuing bank remains provided a complying presentation is made.
If the documents are presented in two separate lots, both lots must be received by the issuing bank within the expiry date and/or latest date for presentation.
A key issue in respect of making a direct presentation is the risk of documents being lost (or delayed) in transit to the issuing bank. That risk is on the presenter.
For the situation where the documents are presented directly to the issuing bank, UCP 600 is silent on whether the nominated bank should be duly informed. However, according to the briefing, it is good practice, that the issuing bank contact the nominated bank to inform them of the direct presentation.
If documents are not presented via an advising bank, second advising bank or confirming bank, the issuing bank remains liable for payment of their charges if they cannot be collected from the beneficiary.
There may be a clause in the LC to the effect that documents cannot be presented directly to their counters by anyone other than the nominated bank and if so, the presenter should avoid direct presentation to the issuing bank.
For the full wording of the briefing please refer to the link above.
Kind regards
Kim