RETURN OF DOCUMENTS

QUESTION

Dear Mr. Old Man,

We have a case that needs your advice.

We, the issuing bank, have received the documents of which all originals of the insurance certificates are not endorsed in blank as required. The applicant informs us that the beneficiary has agreed to replace the discrepant insurance certificates and requests us to return all originals of the insurance certificates (not all the documents) to the presenter.

Our questions:

1. Can we act in accordance with the applicant’s request?
2. If yes, should we return all originals of the insurance certificates or all the documents to the presenter?

Thank you in advance.

Best regards,

Brandy

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ANSWER

Hi,

1. No. The applicant is not a party to the LC; hence, the issuing bank is not obliged to return part of or all documents to the presenter as per the applicant’s instruction or request.

2. If the documents are not complying and the issuing bank decides to refuse to honour, it should give a notice of refusal to the presenter in accordance with UCP 600 sub-article 16 (c)(iii). If option (d) is stated in the notice of refusal, the issuing bank can return all documents as received to the presenter.

The issuing bank can return the discrepant insurance certificates to the presenter as per the presenter’s instruction when the presenter has presented the new insurance certificates to replace the discrepant ones.

Kind regards,

Mr. Old Man