When the Beneficiary Bypasses the Nominated Bank

On 20 March 2024, the International Chamber of Commerce published the 9^th in its series of Technical Advisory Briefings concerning letters of credit that are subject to UCP600. The so-called “TABs” are intended to serve as educational materials on topics that are contentious or often misunderstood. (All of the Technical Advisory Briefings can be downloaded for free here.)

Technical Advisory Briefing No. 9 concerns presentation of documents directly to the issuing bank under a letter of credit that allows for presentation to a nominated bank. Although the expectation of the issuing bank is probably that documents will be received from the nominated bank, UCP600 Article 6(a) clearly says, “A credit must state the bank with which it is available or whether it is available with any bank. A credit available with a nominated bank is also available with the issuing bank.” Therefore, an issuing bank cannot refuse to honour a drawing just because documents were presented directly by the beneficiary.