What are Wachovias procedures on Transferable Letters of Credit?
A transferable letter of credit is one that can be transferred by the original (first) beneficiary to one or more second beneficiaries (Article 38, UCP600). It is normally used when the first beneficiary is a middle man only, and not involved with manufacturing the merchandise. Transferable letters of credit are a tool used by trading companies, or other third parties, to facilitate a trade transaction. This type of credit can only be transferred once. For example, the second beneficiary (or manufacturer) cannot transfer to a third beneficiary. The transfer must be effected in accordance with the terms of the original credit, subject to the following exceptions: • The name and address of the first beneficiary may be substituted for that of the applicant for the credit • The amount of the credit and any unit price may be reduced; this would enable the first beneficiary to allow for his profit • The period of validity and the period for shipment may be shortened It should be noted that a
