Handling / Financing Of Documents Under Export Documentary Credit (DC) - Terms And Conditions

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Please take a moment to read through the Terms and Conditions.

Definitions: In these T&Cs, the words “you” or “your” shall be references to DBS Bank Ltd and the words “we”, “us” or “our” shall be references to the customer whose details are set out in the “Handling/Financing of Documents under Export Documentary Credit” application form (the “Form”). Words and expressions defined in the Form shall have the same meanings when used herein.
Without Recourse Financing: In the event where we agree that any financing, discounting or negotiation of the Documentary Credit at our request is made by you (whether as a nominated bank or otherwise) on a without recourse basis, we agree that such financing, discounting or negotiation is made by you on a without recourse basis where you do not receive any payment from the Issuing Bank on the following grounds:

Prior to acceptance of the presentation of documents under the Documentary Credit by the Issuing Bank, if you do not receive any payment from the Issuing Bank on the following grounds:

documents presented under the Documentary Credit do not comply with the terms of the Documentary Credit (other than due to reasons of fraud or forgery) and you have not received payment thereof from any other source; and/or
the insolvency, receivership or liquidation of the Issuing Bank or the seizure of the whole or substantially the whole of the assets of the Issuing Bank; and/or
(in the case only where the Documentary Credit is denominated in the same currency as the Financing Currency) the imposition enactment or passage of any governmental decree law or regulation relating to payment obligations under the Documentary Credit, to which the Issuing Bank is subject to, prohibiting the transfer, conversion or exchange by the Issuing Bank of the amount of the currency for which any draft is drawn under the Documentary Credit. For the avoidance of doubt, this clause 2(a)(iii) shall not apply to any financing, discounting or negotiation where clauses 4 or 5 below applies; and/or
war, strikes, revolts, change of government or local government, riots, terrorist activity or civil unrest in the country where the Issuing Bank has its place of business

After acceptance of the presentation of documents under the Documentary Credit by the Issuing Bank, if you do not receive any payment from the Issuing Bank on any of the grounds set out in sub-clauses (a)(ii), (a)(iii) or (a)(iv) above, but save and except that you shall have full recourse to us in the event that you do not receive full repayment for your financing/discounting/negotiation or any payment from the Issuing Bank for reasons attributable to any cause other than those set out above, including but not limited to the following:

the Issuing Bank is prohibited or restrained from discharging its payment obligation under the Documentary Credit by any order or directive of any court or tribunal having jurisdiction over it, or by any law, regulation, government decree, administrative rule or directive relating to or in connection with the goods shipped under the Documentary Credit or the underlying transactions or contracts relating to such goods;
the non-payment is due to disputes arising out of the underlying contract between the buyer of the goods and us or between the applicant of the Documentary Credit or any other related parties and us; and/or
If the documents and/or drafts presented to you and found to be complying to the terms of the Documentary Credit are subsequently found to be forged, antedated, falsified, irregular, amended without due authorisation (whether by us or some other party) or to contain fraudulent misrepresentation (whether or not to our knowledge) or if an allegation (whether substantiated or otherwise) is made to such an effect and the Issuing Bank has refused to accept the documents and/or drafts as complying presentation for any payment or reimbursement to be made under the Documentary Credit.

With Recourse Financing: In the event where we agree that any financing, discounting or negotiation of the Documentary Credit at our request is made by you (whether as a nominated bank or otherwise) on a with recourse basis, we agree that such financing, discounting or negotiation is made with full recourse to us under all circumstances, including (without limitation) where you do not receive any payment from the Issuing Bank on the following grounds:

documents and/or drafts presented under the Documentary Credit do not comply with the terms of the Documentary Credit and you have not received payment thereof from any other source; and/or
the insolvency, receivership or liquidation of the Issuing Bank or the seizure of the whole or substantially the whole of the assets of the Issuing Bank; and/or
war, strikes, revolts, change of government or local government, riots, terrorist activity or civil unrest in the country where the Issuing Bank has its place of business; and/or
the Issuing Bank is prohibited or restrained from discharging its payment obligation under the Documentary Credit by any order or directive of any court or tribunal having jurisdiction over it, or by any law, regulation, government decree, administrative rule or directive which the Issuing Bank is to comply; and/or
the non-payment is due to disputes arising out of the underlying contract between the buyer of the goods and us or between the applicant of the Documentary Credit or any other related parties and us; and/or
if the documents and/or drafts presented to you and found to be complying to the terms of the Documentary Credit are subsequently found to be forged, antedated, falsified, irregular, amended without due authorisation (whether by us or some other party) or to contain fraudulent misrepresentation (whether or not to our knowledge) or if an allegation (whether substantiated or otherwise) is made to such an effect and the Issuing Bank has refused to accept the documents and/or drafts as complying presentation for any payment or reimbursement to be made under the Documentary Credit.

Currency Mismatch: In the event you have recourse to us in respect of the financing, discounting or negotiation of a Documentary Credit made by you as described in clauses 2(A), 2(B), 2(C) and 3 above and the Documentary Credit is denominated in a currency (the “Documentary Credit Currency”) which is different from the Financing Currency, the following shall apply :

where we are not required to enter into any deliverable or non-deliverable forward foreign exchange transaction (“Hedging Transaction”) with you to hedge against fluctuations in the relevant foreign exchange rate and/or currency convertibility risks in respect of the Documentary Credit, we shall repay to you an amount in the Financing Currency, calculated by converting the amount payable under the Documentary Credit from the Documentary Credit Currency into the Financing Currency at your rate of exchange prevailing on the date you determine the amount payable by us to you, together with interest thereon. For avoidance of doubt, we agree that your prevailing rate of exchange may be a rate determined by you on a spot basis or where applicable, forward basis, and the date on which such rate is determined by you may be different from the date we actually make payment to you; and
where we are required to enter into a Hedging Transaction with you to hedge against fluctuations in the relevant foreign exchange rate and/or currency convertibility risks in respect of the Documentary Credit, we shall repay to you an amount in the Financing Currency equivalent to the original financing, discounting or negotiation effected by you in the Financing Currency, together with interest thereon.

Currency Convertibility, Transferability and Foreign Exchange Risks: In addition and without prejudice to clauses 2, 3 and 4 above, where the Documentary Credit Currency is different from the Financing Currency, the terms set out below will apply.

In the case where we are not required to enter into any Hedging Transaction with you to hedge against fluctuations in the relevant foreign exchange rate and/or currency convertibility risks in respect of the Documentary Credit and we agree that such financing, discounting or negotiation of the Documentary Credit by you is made on a without recourse basis under clauses 2(a) and 2(b) above, you will bear the following risks:

the currency convertibility risks in relation to the convertibility of Documentary Credit Currency into Financing Currency as at maturity of the Documentary Credit and will not have recourse against us where there is any imposition, enactment or passage of any law, regulation, governmental decree, administrative rule, guideline or directive prohibiting the transfer, conversion or exchange of Documentary Credit Currency into Financing Currency at maturity of the Documentary Credit; and
the foreign exchange risks in respect of any loss suffered by you as a result of foreign exchange rate movements between the Financing Currency and Documentary Credit Currency from the time of your financing, discounting or negotiation of the documentary Credit to the maturity of the Documentary Credit, and

in the case where we have or are required to enter into a Hedging Transaction with you, then regardless of whether the financing, discounting or negotiation of a Documentary Credit is made by you on a with recourse or without recourse basis, the following clauses shall apply to us:

Currency Convertibility Risks: We agree that in relation to the Documentary Credit, we will bear all currency convertibility risks in relation to the convertibility of Documentary Credit Currency into the Financing Currency as at maturity of the Documentary Credit. In the event you are unable to convert and/or transfer, for any reason whatsoever (including, without limitation, due to law, regulation, governmental decree, administrative rule, guideline or directive), the Documentary Credit Currency proceeds received from the Issuing Bank under the Documentary Credit at maturity into the Financing Currency to re-pay the financing, discounting or negotiation effected by you together with interests thereon, we shall, on your demand, fully re-pay to you the proceeds in Financing Currency which you would expect to receive had you been able to effect such conversion to facilitate re-payment of the financing, discounting or negotiation effected by you together with interests thereon, in exchange for you remitting to us the proceeds in Documentary Credit Currency which you have received from the Issuing Bank.
Transferability Risks: We agree that in relation to a Hedging Transaction that is a deliverable foreign exchange transaction, we will bear all transferability risks relating to the parties’ payment obligations under the Hedging Transaction, as a result of which we or you may not be able to effect payment under the Hedging Transaction in the agreed currency, in which case such Hedging Transaction will be settled on a non-deliverable basis in an alternate currency.
Foreign Exchange Risks: Where the Hedging Transaction is a non-deliverable foreign exchange transaction, we acknowledge and agree that:

upon your receipt of the proceeds in the Documentary Credit Currency from the Issuing Bank under the Documentary Credit at maturity, you will convert the Documentary Credit proceeds into the Financing Currency at the rate of exchange to be determined by you to repay the financing, discounting or negotiation effected by you together with interests thereon;
the rate of exchange to be determined by you for converting the proceeds in the Documentary Credit Currency into the Financing Currency may be different from the forward rate of the non-deliverable forward foreign exchange transaction entered into between you and us; and
we agree to indemnify you against, and pay to you on demand any short-fall if the proceeds in the Documentary Credit Currency received from the Issuing Bank under the Documentary Credit, after conversion into the Financing Currency, is less than the amount in the Financing Currency you would expect to receive to repay the financing, discounting or negotiation effected by you together with interests thereon. We authorise you to debit any of our accounts with you for such short-fall.

Security: Without prejudice to your rights conferred in these T&Cs or under general law and in consideration of the handling, financing, discounting or negotiation of the Documentary Credit at our request provided by you, we hereby irrevocably, absolutely and unconditionally:

assign to you all rights, receivables, proceeds, choses-in- action, interest and benefits belonging to us or are or may be due or owing to us arising out of or in connection with the Documentary Credit, free of any encumbrance (collectively, the “Proceeds”) and we irrevocably authorise you to give notice of such assignment to the Issuing Bank of the Documentary Credit; and
pledge as continuing security to you all bills of exchange, invoices, carriage documents or documents of title to the goods shipped in connection with the Documentary Credit (collectively, the “Documents”).

Without prejudice to your other rights herein, in the event that we are in default of payment of any amount due from us, you shall be entitled, without notice to us, to sell the goods shipped in connection with the Documentary Credit (the “Goods”) or any part thereof and apply the proceeds of sale in or towards payment of all our indebtedness to you.

Representations: We confirm, represent and warrant to you that:

we have not received any form of financing, discounting, negotiation or other accommodation in respect of the Documentary Credit from any other party;
we have beneficial title to the Proceeds and the Documents;
the Proceeds and the Documents are free from any security interest or encumbrance of any kind and we shall not at any time assign, transfer or create any security interest or encumbrance over it;
there is no dispute or potential dispute arising or which may arise under or in connection with the Documentary Credit or the underlying contract of sale that may compromise, reduce or extinguish our rights thereunder (including, the amount of receivables payable to us);
there shall obtain or procure that any bills of lading required under the Documentary Credit will be blank endorsed or endorsed to your order as you may direct or request; and
we will endorse, and will obtain or procure any bill of exchange under the Documentary Credit to be endorsed in your favour or to your order as you may direct or request.

Full Recourse: Without prejudice to clauses 2 and 3, we further confirm that you shall have full recourse to us in respect of the financing received by us hereunder in the event that:

if for any reason whatsoever the assignment or pledge to be executed by us in your favour hereunder is found or adjudged to be invalid, void or unenforceable;
we have received financing in respect of the Documentary Credit or the underlying sale transaction from any other party including any bank or financial institution; or
we have assigned or agreed to assign the Rights in favour of another party.

Handling of Documents:

You are authorised at your absolute discretion:

to insure the Goods against all risks and to add the premiums and expenses of such insurance to the amount chargeable to us;
to exercise your right of recourse upon the Goods or any part thereof in priority to any other claims thereon and to sell such Goods or part thereof as may be necessary for payment of freight, insurance, warehouse, dock and other charges, without prejudice to our duty to repay any outstanding amount due to you from such proceeds of sale;
to land and store the Goods at any wharf or warehouse selected by you and/or re-ship the same to any other port;
to accept full or proportionate payment before maturity from the drawees and/or acceptors of any bills, or the consignees of the Goods, against delivery of the Goods (or a proportionate part thereof) and/or documents; and
to debit our account with all monies due from us hereunder and with the amount of unaccepted or unpaid Bills of Exchange or of advances against documents of title or other documents for which we are liable to you or any deficiency arising after realization of the Goods.

It is understood and agreed that, having exercised due care in the selection of any correspondent bank to whom the abovementioned documents may be sent, you shall not be responsible for any act, omission (including any failure to endorse or re-endorse bills of lading), default, suspension, insolvency or bankruptcy of any such correspondent or agent thereof, or for any delay in remittance loss in exchange or loss of any documents, item or their proceeds during transmission or in the course of collection, but for responsibility shall be only for your own acts.
We further agree to the following:
1. to meet all charges incurred by you or your correspondent or agent;
2. not to hold you or your correspondent or agents liable in the event that the documents or some of the documents are lost, destroyed or delivered wrongly by the courier service company selected by you or wrongly delivered by the postal office;
3. you are under no duty or responsibility to check the bill(s)/documents enclosed herein unless you agree to check or negotiate the said documents and we shall not hold you responsible nor is your right of recourse prejudiced in any way in the event that any discrepancies are not identified by you, your servants, employees or agents or in the event that the documents are found by a court of law or tribunal to contain discrepancies, whether or not as a result of a wilful or negligent act or omission;
4. should any claim arise under any insurance, you are authorised to recover the full amount thereof, we agree to assign to you the policy or policies for that purpose and to take all necessary steps to effect such assignment. You may apply the proceeds to satisfy all sums and indebtedness due to you hereunder and in connection with the Documentary Credit; and
5. (in the case only where the Documentary Credit is denominated in the same currency as the Financing Currency) if there occurs in relation to negotiation of or advance against the Documentary Credit an Extraordinary Event (as defined below), you shall have the sole discretion to receive payment under the Documentary Credit in any alternative currency at such exchange rate as you may determine in your discretion. Provided that you undertake any such action in good faith, any such action shall be binding on us and we shall be liable for any additional loss, damages, costs, charges and/or expenses incurred by you. An “Extraordinary Event” shall mean any event which you believe to have a material adverse effect, including any form of exchange control restriction or requirement of whatsoever nature affecting the availability, convertibility, credit or transfers of currencies or funds, any form of debt or other moratorium on jurisdictions, individuals or entities, any devaluation, re-denomination or de-monetisation and/or any form of restriction or requirement which in your good faith opinion adversely alters or changes the rights or obligations which you undertook upon negotiation of the Documentary Credit.
In the event that we instruct you to check the documents and to pay us upon receipt of the proceeds of the Documentary Credit from the issuing/confirming bank, you should only be required to check such documents based on your understanding and interpretation of the Uniform Customs and Practice for Documentary Credits (“UCP Rules”), ICC Publication No. 600 (“UCP 600”) (or any other versions of the UCP Rules as stipulated in the Documentary Credit) and international standard banking practice. You should not be liable to us whether in contract, trust or otherwise should the documents be rejected or payment refused by the issuing or confirming bank on the ground that the documents do not constitute a complying presentation, even if the discrepancies raised by the issuing or confirming banks are not similar to those raised by you or if you determine the documents to be a complying presentation.

Further Assurance: We shall sign all documents, do all acts and render all assistance necessary to enable you to perfect your security interests and recover all moneys due under the Documentary Credit by any means deemed expedient by you, including co-operation in any litigation and/or arbitration (whether in our name or jointly with you) against the Issuing Bank, the buyer and/or any other party. Without prejudice to the generality of the foregoing, we shall at your request make available all documents you deem necessary or desirable for such litigation and/or arbitration, as well as procure attendance of relevant witnesses for meetings and hearings.
Indemnity: We agree to fully indemnify you and hold you harmless against all actions, suits, proceedings, claims, damages, costs (including legal costs and disbursements), losses and expenses which may be taken against you or incurred or become payable by you in connection with the financing, discounting or negotiation of the Documentary Credit at our request or arising from our breach of any provision of these T&Cs.
Receipt of Money: In the event we receive any money under the Documentary Credit or the underlying contract, we will forthwith make payment to you of all such sums and pending such payment, hold such money on trust for you in a separate account.
Authority to Debit: We authorise you to deduct, set-off or debit any of our accounts with you (whether in Singapore or elsewhere including your branches outside Singapore, and whether such accounts are held by us alone or jointly with any other person) or from any moneys payable to us by you or at any of your branches outside Singapore for payment to you in advance of all costs, charges, discounts, interests, commission, expenses and fees payable to you pursuant to the financing, discounting or negotiation of the Documentary Credit at our request. The aforesaid advance payment shall be an absolute and unconditional payment and you shall not be obliged, under any circumstances whatsoever, to refund the same to us.
Consent to Disclosure: You may disclose any information relating to us, our account, this financing and/or the Documentary Credit to: (a) any person to whom such disclosure is permitted or required under any law or regulation or rules (including under the Banking Act (Cap.19 of Singapore) or pursuant to any court order; (b) any of your branches or offices, your holding company, subsidiaries and related corporations and their respective branches or offices; (c) any person in connection with a transfer or assignment or proposed transfer or assignment of your rights or obligations under these T&Cs; (d) any person for the purposes of enforcing or protecting your rights or interests in relation to these T&Cs; (e) any court, tribunal, regulatory, supervisory, governmental or quasi-governmental authority; or (f) any person where you in good faith deem it reasonable to make such disclosure.
No Third Party Rights: A person who is not party to these T&Cs has no right under the Contracts (Rights of Third Parties) Act (Cap. 53B of Singapore) to enforce or enjoy the benefit of any terms under these T&Cs.
UCP: These T&Cs and any handling of documents under the Documentary Credit shall be subject to the provisions of the Uniform Customs and Practice for Documentary Credits that are applicable to the Documentary Credit as at the date of the financing, discounting or negotiation of the Documentary Credit.
Governing Law and Jurisdiction: These T&Cs shall be governed by and construed in accordance with the laws of Singapore. The courts of Singapore shall have exclusive jurisdiction to settle any dispute arising out of or in connection with these T&Cs (a “Dispute”). We agree that the courts of Singapore are the most appropriate and convenient courts to settle Disputes and accordingly we will not argue to the contrary. This clause is for your benefit only and you shall not be prevented from taking any proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, you may take concurrent proceedings in any number of jurisdictions.

By printing and submitting to you the Handling / Financing of Documents Under Export Documentary Credit (DC) form which follows, we have read, understood and acknowledged the Terms and Conditions for Handling Of Documents Under DC and fully authorize the Bank to proceed with the provision of the service. We also understand and agree that the Bank may modify the Terms and Conditions for Handling Of Documents under DC without prior notice to us at any time.

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