“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
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&
remember to take care of each other and the LC
Best
regards
Kim