| "A" bank which is a advising bank and a confirming bank at the same time requested a beneficiary of the confirming and advising service fee for the credit notification using EDI method. But the beneficiary became dishonor and couldn't make service fee payment. So the request was sent to the opening bank but the opening bank insisted that since all the service fee is responsible by the beneficiary, the bank rejected the request and created a dispute.
Case study
1. Notification - The responsibility of a confirming bank's action
The opening bank is responsible for the confirming and advising service fee of the advising bank and the confirming bank. Although there is a article declaring "all banking charges outside are beneficiary's account", when the beneficiary is incapable to make payment, the opening bank is entitled to make the payment finally. (The Sub-Article 18(c) of U.C.P. 500 ) Although the service fees are burden by the opening bank, the bank is exempt from responsibility if other instructions are not executed. (The Sub-Article 18(b) of U.C.P. 500)
2. The right of compensation for a beneficiary of the opening bank
The opening bank should instruct the advising bank and the confirming bank and execute using relevant applicant's expense and allotment.(The Sub-Article 18(b) of U.C.P. 500) So the expense paid by the opening bank can be requested to the applicant. (I.C.C. pub 489. case No.220). Since the opening bank can request the compensation to the applicant, the expenses are made by the applicant lastly.
Conclusion
The advising bank and the confirming bank and at the same the negotiating bank may request service fee for confirmation that was never received. And the opening bank may receive compensation from the applicant.
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