Letter of Credit

Question 1

In this transaction, what was the role of Eon Bank? Quote the relevant article(s)

Eon bank will have a role as an advising bank .The main role of an Eon Bank as an advising bank is to check the authenticity of the letter of credit it is advised to the beneficiary. Eon Bank also responsible to communicated the Letter of credit to beneficiary after checking the authenticity of the credit. In UCP600 Article 2 stated that “advising bank means the bank that advised the credit at the request of the issuing bank”.

Question 2

Under UCP 600 what is the obligation of Eon Bank? Quote the relevant article(s).

Eon bank have no obligation to the beneficiary other than to satisfy itself as to the ostensible authenticity of the credit upon which it is advising. In UCP 600 article 9 stated that “A credit and any amendment may be advised to a beneficiary through an advising bank. An advising bank that is not a confirming bank advises the credit and an amendment without any undertaking to honour or negotiate.

Question 3

Under UCP 600 what is the obligation of Along Bank? Quote the relevant article(s).

Along Bank is obliged to advised and honour the LC. UCP 600 Article (7b) stated that “an issuing bank is irrevocably bound to honour as of the time it issues the credit”. UCP 600 Article (8b) stated that “a confirming bank is irrevocably bound to honour or negotiate as of the time it adds confirmation to the credit”.

Question 4

Under UCP 600 what is the obligation of Chartered Bank? Quote the relevant article(s).

Chartered Bank will incur a deferred payment undertaking or accepts the drafts drawn on it as UCP 600 Article (12b) state that “by nominating a bank to accept a draft or incur a deferred payment undertaking, an issuing bank authorizes that nominated bank to prepay or purchase a draft accepted or a deferred payment undertaking incurred by that nominated bank”.

Question 5

Why did Eon Bank ask Harun to...