> ## Content Index > Fetch the complete content index at: https://blog.financely.io/llms.txt > Use this file to discover other available public pages before exploring further. # Amendments After a Transferable LC Is Split - URL: https://blog.financely.io/amendments-after-a-transferable-lc-is-split/ - Published: 2026-11-13T14:12:10.000Z - Updated: 2026-11-13T16:48:11.000Z - Description: A transferable letter of credit can be passed, in part, to more than one supplier. That split works well when one buyer credit is meant to cover parcels from two or more factories or origin points. It also creates a specific amendment problem: one second beneficiary can accept. - Author: Financely Debt Advisors - Tags: Letters of Credit, Documentary Letters of Credit A transferable letter of credit can be passed, in part, to more than one supplier. That split works well when one buyer credit is meant to cover parcels from two or more factories or origin points. It also creates a specific amendment problem: one second beneficiary can accept a change that another rejects. This guide is about that problem, under UCP 600 Articles 38(d), 38(e) and 38(f), and about the practical point in Article 38(a) that a bank need not transfer except as it consents. It is not a second general guide to how transferable credits work. That overview, including what terms may be reduced on transfer, is already on [transferable letter of credit](https://www.financely.io/transferable-letter-of-credit?ref=blog.financely.io), [transferable LC vs back-to-back LC](https://www.financely.io/transferable-lc-vs-back-to-back-lc?ref=blog.financely.io), and the group page on [how transferable letters of credit work and when to use them](https://www.financely-group.com/how-transferable-letters-of-credit-work-and-when-to-use-them?ref=blog.financely.io). Financely is an advisor and arranger only. We do not transfer credits and we do not advise amendments as a bank. ## Can a transferable letter of credit be split among several suppliers? Yes, if the credit is transferable and partial drawings or shipments are allowed. Article 38(d) then permits a transfer in part to more than one second beneficiary. A transferred credit cannot be transferred onward at a second beneficiary's request. The transferring bank must also consent to the transfer, in extent and in manner, under Article 38(a). Two conditions have to be true before a split is even on the table. The credit must be transferable, which means it has to state that it is transferable, and partial drawings or shipments must be allowed. Article 38(d) then permits a transfer in part to more than one second beneficiary. A second beneficiary cannot have its share transferred onward to a factory or another trader under the same credit. The first beneficiary is not treated as a subsequent beneficiary for that purpose. Even then, a split is not an automatic right. Article 38(a) says a bank is under no obligation to transfer a credit except to the extent and in the manner it expressly consents. Incomplete instructions, an unworkable supplier split, or unclear amendment conditions are common reasons a transferring bank hesitates. The basic structure of the instrument is covered on the live transferable pages, including [transferable letters of credit in commodity trading](https://blog.financely.io/transferable-letters-of-credit-in-commodity-trading/) and [transferable LC structures for commodity intermediaries](https://blog.financely.io/transferable-lc-structures-for-commodity-intermediaries/). This article stays with the amendment problem after a split. ## What the transfer request must say about amendments Article 38(e) requires the request for transfer to indicate if, and under what conditions, amendments may be advised to the second beneficiary. The transferred credit must clearly state those conditions. If this is left vague, a later amendment can stall, be advised inconsistently, or be refused by the transferring bank as outside the consent it gave. Article 38(e) is a drafting point with operational consequences. The request for transfer has to say whether amendments may be advised to the second beneficiary, and on what conditions. Those conditions must then appear clearly on the transferred credit. Parties sometimes agree that amendments are advised automatically, or only with the first beneficiary's consent, or not at all. Each choice has a cost. Automatic advice can put a supplier on a change the trader did not want passed on. A consent requirement can slow a change the applicant has already accepted. Silence is worse: a later amendment can stall, be advised inconsistently, or fall outside the consent the transferring bank gave. The official Article 38 text is in [UCP 600, ICC Publication No. 600](https://library.iccwbo.org/content/tfb/RULES/tfb-ucp600-rules.htm?ref=blog.financely.io). Compact article-by-article notes are also published by [DraftLC](https://guides.draftlc.com/article-38-transferable-credits?ref=blog.financely.io). This article paraphrases those rules and does not reproduce the official wording at length. ## What if one second beneficiary accepts an amendment and another rejects it? Article 38(f) answers this. Rejection by one or more second beneficiaries does not invalidate acceptance by any other second beneficiary. For those that accepted, the transferred credit is amended. For any second beneficiary that rejected the amendment, the transferred credit remains unamended. The first beneficiary can then be left running two versions of the same original credit. The following example is hypothetical. It uses round figures and is not a Financely case. Suppose a transferable credit for USD 2,000,000 is transferred in part to Supplier A for USD 1,200,000 and to Supplier B for USD 800,000\. The applicant later extends the latest shipment date by two weeks. Supplier A accepts the amendment. Supplier B rejects it. Under Article 38(f), Supplier A's transferred credit is amended and Supplier B's transferred credit remains unamended. The first beneficiary is then running two versions of the same original credit, and must still satisfy the master credit, which may itself have been amended. Nothing in Article 38(f) automatically collapses the whole transfer because one supplier said no. The mixed position is the intended result of the rule, and it is the risk that has to be managed. ## Why that split matters in a real shipment The master credit may have changed, while one supplier is still performing under the old dates, quantity or documents. Inspection, insurance and presentation periods can then diverge. The first beneficiary has to control which supplier is on which version, and still make a complying presentation under the master credit. That is an operations problem as much as a legal one. ### Dates, quantities and documents that can diverge Once two versions exist, latest shipment dates, presentation periods, quantities, inspection instructions and insurance conditions can diverge. One supplier may be shipping under the new date, while the other is still bound to the old one. Document checklists can also differ if the amendment touched the required papers. The first beneficiary's operations team has to know, parcel by parcel, which version applies, and has to present in a way that still meets the master credit. ### What the first beneficiary still owes the applicant under the master credit The applicant deals with the first beneficiary under the original credit, as amended if the first beneficiary has accepted that amendment. A supplier's rejection does not rewrite the master credit. If the master credit now requires a later date, a different quantity tolerance, or a new inspection term, the first beneficiary still has to meet those terms on the presentation that goes to the issuing bank. A split transfer that looked tidy at issuance can become an operations problem the moment an amendment is not accepted by every second beneficiary. ## How first beneficiaries can reduce amendment risk before the transfer Transfer instructions should be built early, including the amendment conditions Article 38(e) requires, and they should be complete enough for the transferring bank to consent under Article 38(a). It is usually better not to transfer to more suppliers than the logistics and document control can support. Time should be left in expiry and presentation periods so an amendment, if it comes, can be advised and accepted or rejected without forcing a scramble. The transferring bank is not obliged to repair a vague instruction after the fact. If the supply chain cannot operate a split credit, a different path may be cleaner. A back-to-back structure is one such path, already compared on [transferable LC vs back-to-back LC](https://www.financely.io/transferable-lc-vs-back-to-back-lc?ref=blog.financely.io). This article does not rewrite that comparison. The point is only that an unworkable split should be recognized before the transfer request is made, not after an amendment has already divided the file. ## How this sits next to invoice substitution and assignment of proceeds Invoice substitution, and what happens when it fails, is a different Article 38 problem, covered in [when transferable LC invoice substitution fails](https://blog.financely.io/transferable-lc-invoice-substitution-failure-ucp-600/). Assignment of proceeds under Article 39 is a different act again: it may give a third party a right to receive proceeds, but it does not make that party a second beneficiary and it does not solve a split-amendment problem. See [assignment of proceeds letter of credit](https://blog.financely.io/assignment-of-proceeds-letter-of-credit/). ## How Financely reviews split-transfer files Financely can help a qualified trading company or exporter prepare transfer instructions and the supporting file, including how many second beneficiaries are intended and how amendments should be handled. We advise and arrange. We do not transfer the credit, we do not advise amendments as a bank, and we do not stand in for the transferring bank's consent. Transferring a credit and advising amendments are bank functions. A structure that cannot operate a split amendment cleanly should be reviewed before anyone relies on it. ## Frequently asked questions ### Does a bank have to accept a request to split a transferable credit? No. Article 38(a) says a bank is under no obligation to transfer a credit except to the extent and in the manner it expressly consents. A credit that is transferable is still subject to the transferring bank's operational and credit consent. Incomplete transfer instructions, unclear amendment conditions or an unworkable supplier split are common reasons a bank hesitates. ### Can the second beneficiary transfer its share to a factory or another trader? Generally no. Article 38(d) says a transferred credit cannot be transferred at the request of a second beneficiary to a subsequent beneficiary. The first beneficiary is not treated as a subsequent beneficiary. If the supply chain needs another hop, that is usually a commercial and banking problem to solve another way, not a second transfer under the same credit. ### If one supplier rejects an expiry extension, does the whole transfer fall over? Not automatically. Under Article 38(f), the suppliers that accepted the amendment work under the amended transferred credit, and the supplier that rejected it remains under the unamended transferred credit. The first beneficiary must still satisfy the master credit, which may itself have been amended. That mixed position is exactly the risk this article exists to explain. ### Who pays the charges for a transfer and later amendments? Article 38(c) says that, unless otherwise agreed at the time of transfer, charges incurred in respect of a transfer are for the first beneficiary. Amendment charges depend on the credit, the banks and any agreement at transfer. This article does not publish a fee schedule or typical basis points. ### Is assignment of proceeds a way to add a third party without a transfer? Assignment of proceeds may give a third party a right to receive proceeds, but it does not make that party a second beneficiary or pass the right to perform under the credit. See the [assignment of proceeds letter of credit](https://blog.financely.io/assignment-of-proceeds-letter-of-credit/) guide. It is not a substitute for a consented transfer, and it does not solve a split-amendment problem. ### Does Financely transfer letters of credit or advise amendments? No. Transferring a credit and advising amendments are bank functions, not Financely functions. Financely advises qualified clients, helps prepare transfer instructions and the supporting file, and can introduce the transaction to banks. Submit the structure, including the intended supplier split, at [https://www.financely.io/deal-submission](https://www.financely.io/deal-submission?ref=blog.financely.io) ## Request a review Qualified trading companies and exporters can submit the transferable structure, including how many second beneficiaries are intended and how amendments should be handled. Financely does not transfer the credit. [Submit your deal](https://www.financely.io/deal-submission?ref=blog.financely.io) Sources and references 1. ICC, Uniform Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication No. 600 (UCP 600), Article 38: [https://library.iccwbo.org/content/tfb/RULES/tfb-ucp600-rules.htm](https://library.iccwbo.org/content/tfb/RULES/tfb-ucp600-rules.htm?ref=blog.financely.io). 2. DraftLC Compliance Guides, "UCP 600 Article 38: Transferable Credits": [https://guides.draftlc.com/article-38-transferable-credits](https://guides.draftlc.com/article-38-transferable-credits?ref=blog.financely.io). 3. Globalior, "Transferable Letter Of Credit: UCP 600 Article 38 Explained", for context only: [https://www.globalior.com/transferable-letter-of-credit/](https://www.globalior.com/transferable-letter-of-credit/?ref=blog.financely.io). 4. Financely deal submission: https://www.financely.io/deal-submission If you have a bankable trade file, start with the [USD 500 trade finance eligibility screen](https://www.financely.io/trade-finance-eligibility-check?ref=blog.financely.io) before or alongside deal submission. Financely is an advisor and arranger, not an issuing bank.