Dear sir,

An L/C has been issued by bank A for importing steel from beneficiary xxxx.

Payment is available by negotiation at sight against shipping documents which include clean on board B/L and shipping company certificate or their agent stating that carrying vessel belong to regular line.

Shipping term is CFR port of discharge confirmed by bank B. Insurance is covered locally as per institute cargo clause c. The documents received by the issuing bank from confirmed bank are strictly complying and the confirmed bank claim reimbursement as per L/C terms,

The applicant refuse to collect documents calming that the carrying vessel has not yet reached the agreed port of discharge although goods have been shipped 3 months before – and still no information about the carrying vessel.

What can the issuing bank can do to recover this loss.

Regards

Form that point on he agreed to those rules, which includes that they are understood and of having knowledge of the fact that under LCs the documents are paid and not the goods and/or services subject to commercial contracts or other type of agreements concluded between the beneficiary and the applicant.

The applicant can in no way invoke such a reason for not paying the value of the documents.

As issuing bank I would debit applicant's account without a blink of the eye

From the text posted I understand no cash collateral was made by applicant for this LC. In some countries, like mine, upon requesting his bank to issue an LC, the applicant's account is debited with the amount of the LC which is blocked in a special account following to be used for payment of complying documents

Best regards,

Bogdan

I am not sure this question is well suited for the single window :-)

Somehow - one need to know the transaction much more detail in order to provide a detailed answer. As far as lcviews we can go as far as the following:

If a complying presentation is made to the issuing bank - that bank must honour. Banks deal with documents ant not with goods - so as such the whereabouts of the goods have no relevance to the banks.

The relationship between the applicant and the issuing bank is regulated by the LC application submitted by the applicant – and it is based on that agreement that such case must be handled.

Best regards

Kim