AboutDavide Andrew Papa Expertise All matters pertaining to assisting Private import export INTERMEDIARIES, AGENTS and BROKERS Regarding International trade Laws and procedures,Letters of credits, as per UCP 600,Presentation, Commissions,International Rules of agency, and Incoterms 2000. All matters pertaining to shipping documents relating to the Import and export of products from one country to another.All matter for buyers and sellers of commodity products relating to the import and export industry.FTN with the introduction of UCP 600 will release the publication "The world is yours"(2004) made specifically for Intermediaries.Current inhouse tra ining manual is "Follow the Yellow Brick Road"(2008) Our advice website is www.ftnexporting.com
Experience FTN exporting founder Davide Papa has been trading for over 20 years- and has dealt with a huge variety of corporate entities including Gold and crude oil suppliers. FTN appeared in a major controversial Newspaper editorial in 1994. FTN Exporting official publication "International Trade and the Successful Intermediary"(ITSI) is about to be released world wide (December 2009) by the prestigious U.K publishing firm Gower's (U.K) and is listed on Amazon.com (Keyword: International Trade Intermediary) ITSI is ostensibly the first uniform intermediary trading doctrine of its kind, and will become the standard intermediary practice world wide in years to come. FTN exporting has created the said doctrine and supporting rules of trade defined as "URPIB" (Uniform Rules and Practice for Intermediaries and Brokers), which will (has?) become the most successful set of private intermediary rules ever created.
Publications The World is Yours and "Follow the Yellow Brick Road" www.ftnexporting.com . Author of "International Trade and the Successful Intermediary " (ITSI) 2009 excepts on http://www.gowerpub.com/default.aspx?page=637&calcTitle=1&title_id=11177&edition_id=12138
Education/Credentials Let school early. Became a master chef . Took up business management and later studied "international Trade at Stott's college Melbourne, Australia.
Question QUESTION: how can advising bank transfer a transferable credit confirmed and available with nominated bank ? and what role can be played by the advising bank?
ANSWER:
Dear Katia,
You need to learn intermediary effective procedures fully to understand the answer , neverthless the answer is provided-
The confirmed credit once issued to the advising bank is a lot different to a non confirmed credit- in that the
confirmed credit can be used as a localized instrument to apply collection proceudres in where the advising bank then obtains reinbursement of funds collected upon- In effrect the advising bank allows collction to apply to the intermediary at a discount rate, in where the end buyers bank does not need to be advised- In a non confirmed credit the advising bank plays no part other than passing documents to the end buyers issuing bank who must inspect and pass doucmetns as being 'Clean" before collection is allowed to apply-
In a transferable credit - the issuing bank Issues the credit to the advising bank- as being transferable and marked accordingly- The intermediary MUST pay expensive transfer fee's in being able to transfer the buy price to the supplier , leaving the different as commission in the account of the Intermediary-
The advising Bank WILL not instigate transfer whether Confirmed or unconfirmed DLC is in use, unless such fees are paid upfront- and the Credit MUST be transferred ONCE only directly to the supplier in possession of goods and cannot be transferred to another misinformed intermediary claiming to have supply , because the credit can only be transferred ONCE- if you transfer it to another "seller" he will not be able to transfer the credit to the supplier and the deal fails (- so no back to back dealing is allowed-)
99.9% OF INTERMEDIARIES ON THE NET HAVE NO IDEA ABOUT THE ABOVE APPLICATION AND HAVE NO IDEA ON HOW TO TRADE EFFECTIVELY-
The intermediary as per our Doctrine and procedures must only use and ask for a UCP600 endorsed credit .
FTN advises its intermediaires if using a transferable credit that such must take advantage of Rule 38 UCP600
which states para phrasing the article- "Unless otherwise agreed upON, all transfer fees is paid by the beneficiary-"
Therefore , the intermediary makes the offer to the end buyer in where the offer states among other thingS- "Price oF goods offered on the condition that the end buyer also payS for the transfer fee" to which the intermediary shall refund such on the sellers invoice if the deal is successfully applied...etc..
FTN EXPORTING TRAINED INTERMEDIARIES OFTEN ASK FOR A NON TRANSFERABLE DLC, and no longer use the transferable application often-
I Hope the above helps - it's a lot more complex than advised but provides the required insight sought-
Kind Regards
Davide Papa
In house education and publication: www.ftnexporting.com
Members site: www.ftnx.net
Published Author: "international trade and the succesful intermediary"
---------- FOLLOW-UP ----------
QUESTION: THANK YOU FOR THE ANSWER , BUT STILL MY QUESTION WAS IF A RECEIVE A TRANSFERABLE DOCUMENTARY CREDIT FROM CONFIRMING BANK IN SAME COUNTRY ISSUING BANK BEING ABROAD IN FAVOR OF MY CLIENT , AND THE ISSUING BANK SAYS CLEARLY THAT THEY ALLOW THE ADVISING BANK TO TRANSFER THE CREDIT , CAN THE ADVISING BANK MAKE A TRANSFER OF THE CREDIT EVEN IF IT IS CONFIRMED BY THE NOMINATED BANK ?
Answer
Dear Katia
You question in ambiguous- and not clear- Let me see if below may give you the answer-
(a) Then inital anser Yes- As per you question: Read my last answer- The act of transferring is one action- the act of confirming the credit is another- the act of compliance is another and the act of reibursement is another-
Who "honours" what is dependent on a number of number of factors-
The advisng bank is allowed to transfer any credit marked as transferable-in where all banks involved is adhering to UCP600 rules - Private issued credits not adghering to UCP600 , then such may apply but might also not applied without added conditions becoming apparent-
You use the term Nominated bank, meaning the bank authoized in the credit to honour such -"Authorize" by the issuing bank-The bank authorizes and allows confirmation to be applied-
and -
(B) A credit Must on its form STATE IN WHICH BANK IT IS AVAILABLE AT - A CREDIT MADE AVAILABLE WITH A NOMINATED BANK - IS AVIALABLE FROM THE NOMINATED BANK, IF THE CREDIT DOES NOT STATE AVIALABILITY ON ITS FORM , THEN IT IS ONLY AVAILABLE FOR COLLECTION FROM THEN ISSUING BANK-
READ THE CREDIT WHE HAT DOES IT SAY??? WHERE IDS THE CREDIT VAVIALABLE FOR COLLECTION-
If it says the issuing bank , the the advising bank has to forward the complying documents to the issuing bank-if the transfer is initated from the advising bank , then the advisng bank is only acting as an agent for the issuing bank-
and
(C) If the documents are presented to the Nominated bank in a manner to indicate complying presentation,then the issuing baNK MUST honour the nominated bank acceptance of presentation document-
The issuing Bank undertaking to reimburse the nominated bank is a independent matter to the issuing Banks obligation to the "beneficiary" of the credit-
If the issuing bank fails to perform in allowing collection to proceeds after complying with presentation the whole idea of a secondary bank being involved a giving it's "confirmation" to the first samller bank upon then request of such is made, is just that- The confirming bank will allow collection to apply and guarantees payment of the issuing bank- if the issuing bank fails to make payment , the confirming bank will honour the payment-
(D) The advisng bank is an agent for other banks- acting on behlaf of the instructions of the beneficiary- It may simply have no part in the transaction nor accept presentation documents in where YOU have not secured a confirmed credit into YOUR account - the bank here simply transfers the credit forwards to the issuing bank the presentation documents - If you did recieve a confirmed credit into YOUR bank account in where your bank is the advising bank, then complying presentation documents only need to be presented to the advising bank to allow collection procedure to be enacted-
Hope it helpd this time- See how you go this time - You answer I suspect is (B) above
