An assignment is an arrangement under an L/C in terms of which the payee assigns or transfers part of the L/C amount to a third party.

Assignment to one or several third parties in a contract is possible in the following business sectors:

• Import L/Cs (LI)
• Export L/Cs (LE)
• Transferable L/Cs (LT)
• Guarantees (GI)

Assignments to up to 10 third parties (roles TP0-TP9) may be entered for each contract. Since the third parties generally are not clients of the bank, these do not need to be set up as database addresses; nevertheless, they do need to be created as temporary addresses.

In the contract overview of the business sectors, the file cover contains a reference to an existing assignment and to the amount assigned.

Assignments may be created, modified, deleted or paid for each business sector. To this end, the business sectors have a dedicated panel “Assignment of proceeds” via which the assignments can be managed.

The following list provides an overview of the processing options available in the business transactions:

Details on creation of messages can be found under DOCEOT Messages.

An assignment can be made directly when opening the contract in the following business transactions:

• Opening an Import L/C,
• Advising / Confirming,
• Opening a Transfer L/C and
• Creating a Guarantee/Standby.

Should the client place the order for an assignment only at a later date, a transaction is available in each of the business sectors mentioned, by means of which an assignment may be created (Assignment of Proceeds, Assignment, Assignment of Proceeds, Assignment). Moreover, an assignment can also be captured in the amendment transactions.

To create an assignment, only the party and the amount for the assignment need to be recorded in the “Assignment of proceeds” panel. The assignment amount can be captured in the “Amount” column. The application uses this to automatically compute the percentage share of the assignment. Alternatively, a percentage may be entered and the application will then compute the percentage of the assignment amount. If a percentage is captured, then it will apply to the contract, i.e. in the course of amendments at a later date, the assignment amounts will automatically be posted according to the relevant percentage share.

An assignment may be amended in

• Amendment transactions (Amending, Advise an Amendment, Amending, Amending) or
• Amendment transactions (Assignment of Proceeds, Assignment, Assignment of Proceeds, Assignment).

An assignment amount already registered is displayed in the “Assignment of proceeds” panel in the “Old amount” column. An increase or reduction of the assignment already registered can be made by entering the value that was used while creating the assignment. This means that if the assignment was created by entering an amount in the “Amount” column, the change can be made only by entering a positive or negative amount. If the assignment was created by entering a “Percentage”, the value must be changed using the “Percentage” column.

In the process, the sum total of all assignments must not exceed the “Maximum amount for all assignments under this contract” available. In addition to the open L/C amount, the maximum amount also takes account of sets of documents that have been registered but not settled as yet.

If a percentage-based assignment is involved, where any amounts are changed the amendment will automatically be taken over into an existing assignment. This means that if the L/C is increased, a prorated increase will automatically be carried out for the assignment so that the percentage share remains preserved. Should this not be desired, the user can delete the proposed assignment amount in the “Amount” column. If only an assignment amount was captured at the time of registering the assignment, no automatic increase / reduction in the assignment amounts will be carried out.

The deletion of an assignment is possible in all transactions in which the assignment panel is available. In order to delete an existing assignment, all that is necessary is to click the [ Reverse] button on the Details panel of the assignment line. As a result, the existing amount in the “Old amount” column is entered in the “Amount” column preceded by a minus sign and is therefore deleted. When closing the contract, the user receives a warning in connection with assignments that have not yet been paid. These are reset by the system before closing the contract.

Generally, the payments assigned to third parties are paid on settlement of the set of documents and, therefore, the amount credited to the payee is reduced accordingly.

• For sight documents, this is carried out in the business transaction “Send, accept and settle Documents” in the business sector of import documents, export documents or assignment documents.
• For usance documents, the calculation is likewise carried out in transaction “Send, accept and settle Documents” since these amounts are taken over into temporary settlement. However, the final settlement and accounting entry is made in the course of final settlement as part of the transactions “Settlement of usance documents on maturity”.
• In the case of utilizations under a Guarantee, the assignment is paid along with the utilization in transaction Paying a Claim.

The assignment amount is automatically computed by the system and entered in the “assignment” panel as the amount to be settled. At the same time, a credit note is entered in the “settlement” panel for the assignment amount to the third party. The calculation is made on a prorated basis, i.e. the assignment amount payable proposed by the system is the percentage share of the documentary amount in relation to the L/C amount. However, the user still has the opportunity to overwrite this automatically computed assignment amount.

In the event that on payment of a set of documents or a Guarantee, the utilization of the assignment is not to be paid out in full or not at all, it is likewise still possible to pay an assignment under the assignment transactions (Abtretung, Assignment, Assignment of Proceeds, Assignment) and in the contract closing transactions(Closing, Closing , Closing, Closing.

If, under an Export set of documents, only the amount reduced by the assignment amount is to be paid in advance to the presenter, the assigment amounts should be registered in transaction Send, Accept and Settle Documents and saved in the form of a temporary settlement. When creating the advance payment, the temporary settlement can then be taken up, with only the reduced amount being paid to payee or beneficiary of the advance payment. The debit entry to the payor will then be carried out as usual for usance documents via transaction Settle Usance Documents at Maturity or via transaction Send, Accept and Settle Documents for sight documents.

When closing the contract, the user receives a warning in connection with assignments that have not yet been paid. These are reset by the system before the contract is closed. If a payment of assignment amounts is to be made, this is possible by entering the amount payable in the “Amount to be settled” column.