The Bank may receive a request from the Issuing Bank to add confirmation to the LC issued by the Issuing Bank. Confirmation is asked for when the beneficiary is not comfortable with the financial standing of the Issuing Bank or is doubtful about the country risk of the Issuing Bank.
The request to confirm the LC may also come from the beneficiary. In such instances, the Bank (as an Advising Bank) will require the beneficiary to seek consent from the applicant for the Issuing Bank to instruct the Bank to add confirmation to the LC. Confirmation of the LC constitutes a definite undertaking by the Bank (Advising Bank) to assume the obligations and liabilities similar to and in addition to those of the Issuing Bank thereby guaranteeing payment should the Issuing Bank default in payment. The Confirming Bank is usually the Advising Bank and will also assume the role of the Negotiating Bank.
Important Notice: UCP 600
For Export Letter of Credit, the handling will be subject to the version of the UCP which is stated in the Export Letter of Credit.
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