Some banks have a peculiar practice. They advise original lc to the beneficiary without collecting their advising commission from them before. Many times beneficiary gets lc neogtiated from bank other than the advising bank and refuses to pay advising commission to the advising bank. Under UCP that advising bank claims adv commission from issuing bank who passes on these charges to applicant. Is there any way to save applicant from these advising charges? I mean why dont advising banks simply courier non-negotiable copy to bene and hand over original negotiable copy after collecting their charges??????

curious spider man

Replying to [spider man]:

The position as per UCP, article 37 is as follows:

"c. A bank instructing another bank to perform services is liable for any commissions, fees, costs or expenses (“charges”) incurred by that bank in connection with its instructions.

If a credit states that charges are for the account of the beneficiary and charges cannot be collected or deducted from proceeds, the issuing bank remains liable for payment of charges.

A credit or amendment should not stipulate that the advising to a beneficiary is conditional upon the receipt by the advising bank or second advising bank of its charges. "

As you have said, the problem lies in the last paragraph. The whole thing finally boils down to relationships, knowing who the applicant is dealing with.