Non-operative L/Cs

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Query from D.C.Y.:
Dear Mr Lee,
As a premium member, I wish to keep you informed of unique situations I encounter while handling L/C documentations in a trading firm.
I have just received an L/C from an Indian bank in which the following condition appear in Field 47A :-
"LC will become operative only after the name of the carrying vessel is incorporated in the L/C through an amendment". I requested this clause be deleted but the applicant refused, the reason being that it is their corporate policy to issue L/Cs which are operative only after the name of the vessel is nominated by way of an amendment.
I thought it is the spirit and intention of the UCP Rules that once the L/C is issued it should be valid and operative, otherwise it is a worthless piece of paper. I am surprised that banks do issue such an L/C which is only operative upon the occurrence of a certain event. Is ICC, Paris, considering revising the UCP Rules to prohibit the issuance of such an I/C ? May I have your valued opinion and views. Thanks.
Regards
D.C.Y.

Response from T.O. Lee:
Dear Mr. Y.,
My comments to your reported case are:
1 The applicant is NOT a party to LC and hence the applicant cannot present any document.
2 The issuing bank or the confirming bank, not the applicant, should control compliance and payment decision according to UCP 600 articles 7 to 8, and 14 to 16.
3 Please report to ICC Banking Commission through ICC Singapore. The issuing bank should not have issued such LC.
Best regards,
T. O.

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