Not even safe with L/C
Post 1 of 4
Hello friends,
I have a really good friend and mate in China, that is the General Manager of a textile company. Recently we met and he told me an interesting, although unpleasant experience.
His company has agents in Italy, two to be more precise, and he has been working with them for over 10 years. Recently one of the agents, brought in an new Italian client. And after the price was agreed, the client's bank issued an L/C.
Production started and was sent to Italy after a couple of weeks.
Once it got there, the client said that he had made a mistake and that the price he agreed was actually very high and therefore he could not accept the goods, except if it was at half/price.
After contacting his bank, in China, my friend was astonished to know that the Bank in Italy found discrepancies in the L/C ( they can always find them, in this case a spelling mistake on the contract ) and in China my friend was advised to let it go at half price, to avoid extra costs.In fact my friend's bank said that they can always find discrepancies in L/C and even if they don't find, banks have the ability to drag things for a few weeks, and by then storage costs at the Port will most certainly be very high.
Well, the situation is that the container is on the way back to China.
My Best!
I have a really good friend and mate in China, that is the General Manager of a textile company. Recently we met and he told me an interesting, although unpleasant experience.
His company has agents in Italy, two to be more precise, and he has been working with them for over 10 years. Recently one of the agents, brought in an new Italian client. And after the price was agreed, the client's bank issued an L/C.
Production started and was sent to Italy after a couple of weeks.
Once it got there, the client said that he had made a mistake and that the price he agreed was actually very high and therefore he could not accept the goods, except if it was at half/price.
After contacting his bank, in China, my friend was astonished to know that the Bank in Italy found discrepancies in the L/C ( they can always find them, in this case a spelling mistake on the contract ) and in China my friend was advised to let it go at half price, to avoid extra costs.In fact my friend's bank said that they can always find discrepancies in L/C and even if they don't find, banks have the ability to drag things for a few weeks, and by then storage costs at the Port will most certainly be very high.
Well, the situation is that the container is on the way back to China.
My Best!
26 Sep 2007 01:41
Post 2 of 4
Replying to [terraazul]:
I would like to know the name of the Bank in Italy, who made this cheat together with their customer !
rgds
Wilhelm
I would like to know the name of the Bank in Italy, who made this cheat together with their customer !
rgds
Wilhelm
26 Sep 2007 02:22
Post 3 of 4
Replying to [terraazul]: Could not have been to recent, as that would not fly with UCP 600. What did the confirming bank say?
Ranger
Ranger
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27 Sep 2007 00:18
Post 4 of 4
Replying to [terraazul]:
under old UCP 500, I don't think I could classify them as cheater.
They did unethical business behaviour but with old UCP 500, what the issuing Bank did is indeed legal, whether we like it or not.
They could always find a discrepancy when they want to.
But I'm not sure whether this case could still happen if they apply UCP 600
under old UCP 500, I don't think I could classify them as cheater.
They did unethical business behaviour but with old UCP 500, what the issuing Bank did is indeed legal, whether we like it or not.
They could always find a discrepancy when they want to.
But I'm not sure whether this case could still happen if they apply UCP 600
03 Oct 2007 02:23
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