Another great lesson from Norman and clarifying comments from Vincent ~ with both of whom I've had the pleasure of lecturing for many years. The overarching message is that bank clerks who handle Documentary Credits must be given much more detailed training in order to understand the pitfalls which can and often do threaten their banks or their clients... Jeffrey Blum FCIArb FICS & Education Officer, London and South East Branch, Institute of Chartered Shipbrokers
It is not possible to have two exposures to the same risk. If the LOI is issued then the exposure on the LC is settled simultaneously. Only one exposure should be outstanding. The ultimate risk is if the Invoice under the LC reflects a different amount, presumably higher in value.
Another great lesson from Norman and clarifying comments from Vincent ~ with both of whom I've had the pleasure of lecturing for many years. The overarching message is that bank clerks who handle Documentary Credits must be given much more detailed training in order to understand the pitfalls which can and often do threaten their banks or their clients...
Jeffrey Blum FCIArb FICS & Education Officer, London and South East Branch, Institute of Chartered Shipbrokers
It is not possible to have two exposures to the same risk. If the LOI is issued then the exposure on the LC is settled simultaneously. Only one exposure should be outstanding. The ultimate risk is if the Invoice under the LC reflects a different amount, presumably higher in value.