Trade and Receivables Finance by Stephen A. Jones

Author:Stephen A. Jones
Language: eng
Format: epub
ISBN: 9783319957357
Publisher: Springer International Publishing

Third Parties

The master credit must allow third parties to issue documents, and be named as shipper. This will allow a complying presentation to be made under the master credit, even though the documents may erroneously contain the name of the end-supplier or be issued by parties not specified in the credit.

It is best if the master credit is written in such a way that documents received from the end-supplier could be presented, in case of need, and constitute a complying presentation. This provides contingency should the middle-party fail to present their substituting documents. Third parties should therefore be allowed to issue all documents to include draft and invoice. This risk is reduced when the financier holds the required documents from the middle-party prior to issuing the counter credit. The key for the financier is to have control and contingency to ensure as far as possible that proceeds are received under the master LC as their source of repayment.

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