Seeking Best Practice on Tracing Standby LC Detrimental Amendments

In a bankers’ discussion this month, conversation focused heavily on standby LCs, particularly the handling of amendments.  One of questions asked: How many times do banks send tracers for detrimental amendments?

For detrimental amendments, multiple specialists favored the approach of incorporating the initial (pending) amendment into a new amendment. It is clear that an issuing bank cannot force the beneficiary to accept or reject an amendment. Hence, the question of sending tracers. But the discussion focused on packaging the existing amendment into a new one, so is that a more effective way of inducing a response instead of repeating the sending one or more tracers? And then there is the possibility of confusion regarding amendment numbering.

Francisco Rodriguez, CDCS – GLS, agreed to share further comments with DCW readers: