Lesson check0 / 2 answered · 0 correct
Check 1
Does 'non-transferable' automatically mean 'cannot be financed'?
Check 2
Is an amendment the normal way to change issued LC terms?
Confirmation, Transferability and Amendments
Three words that are often mixed together.
Confirmation
Confirmation is an additional undertaking added by a confirming bank, subject to the credit and applicable rules.
It is not the same as the advising bank simply passing the credit to the beneficiary.
Transferable
A credit is transferable only when it clearly says it is transferable under the relevant rules.
Transferability is about substituting another beneficiary through the transferable-credit mechanism.
Assignment of proceeds
Assignment of proceeds is a different idea from transfer of the credit itself.
A non-transferable credit does not automatically answer every question about financing or assignment.
Amendment
If the parties need to change the LC terms after issuance, the change is made through an amendment process.
For SWIFT documentary credits, MT707 is the common amendment message.
Remember thisAdvice, confirmation, transfer and assignment are different ideas.
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