Home Mr Old Man BILL OF LADING DATED PRIOR TO LC ISSUANCE DATE

BILL OF LADING DATED PRIOR TO LC ISSUANCE DATE

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Kien Pass, Dong Giang

QUESTION

Dear Mr. Old Man

If B/L dated 4 months before LC issuance date, is it acceptable? Do we consider as stale B/L? However, the documents were presented within presentation period as LC called for 21 days from LC issuance date. Special condition also stated that documents issued prior to LC issuance date is acceptable.

Can we take the B/L as good? or Can we mark as a discrepancy? Any risk on negotiating bank?

It’s very unusual to receive such B/L. Need your advice and opinion.

Thanks!

LMK
——–

ANSWER

Dear LMK,

According to sub-article 14(i) a document may be dated prior to the issuance date of the LC, but must not be dated later than its date of presentation. So, unless prohibited by the LC, the described BL is acceptable no matter how long it is issued prior to the LC issuance date. There is no discrepancy.

I do not think the negotiating bank would bear risks if negotiating the documents with such a BL unless the documents are later found not to comply with the LC terms and conditions and rejected by the issuing bank. However, I agree with you that such a BL is very unusual. You need to find out the reason why the BL was issued so early or whether it is a fraud…. If you feel uncomfortable with it, you had better refuse to negotiate.

Best regards,
Mr. Old Man
———–

Dear Mr. Old Man

Thanks for your prompt reply! In fact, I have been waiting very anxiously for your answer!

I can handle with ease now that B/L can also be issued much more earlier as supported by sub art 14 (i) though it is rather unusual. We have nevertheless done diligent check and understood that LC issued late due to some contract issues that cannot be compromised. I must say that your invaluable advice and opinion have definitely helped me a lot to clear my doubts!

Many thanks again for taking your precious time to help me solve the problem! Greatly appreciated!

Have a good weekend!

LMK

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8 Comments

  1. Terence Tan

    May 17, 2016 at 3:18 pm

    Hi Mr Old Man,

    I have an enquiry, LC calls for a set of copied document to be send to applicant. Beneficiary’s certificate required.

    When we presented the documents for negotiation, the highlighted that Bill of exchange should be include in the set of copied documents. So for the date of BE should be dated the same or earlier than beneficiary’s certificate.

    However, I question the bank as the LC doesn’t not called for a draft under 46a.
    Therefore, the nego bank is not valid.

    Need you advice, please.

    Reply

    • mroldman

      May 18, 2016 at 9:56 am

      Hi,

      LC available by negotiation would require presentation of drafts in Field 42C of Swift MT 700. The beneficiary would present the documents including drafts (bills of exchange) to the negotiating bank/the issuing bank for negotiation/payment.
      Where the LC requires presentation of beneficiary’s certificate certifying that one set of copied documents has been sent to the applicant, such a set of shipping documents would not include drafts (bills of exchange).
      I agree that the discrepancy raised by the negotiating bank is not valid.

      Kind regards,
      Mr. Old Man

      Reply

    • Terence

      May 18, 2016 at 6:34 pm

      The lc calls for FULL SET COPIED DOCUMENTS to be sent to applicant.

      The issue is that it mention only copied document instead of shipping documents.

      So can I summarise that if the draft is not under documents required. There is no need for the draft to be include.

      Thank you very much!!
      Mr OldMan

      Reply

  2. Terence Tan

    May 18, 2016 at 11:01 am

    Thanks for your replied, Mr Oldman

    What if under 46a, calls for presentation of Draft?

    Are we required to include the draft in the set of document to be send to applicant?

    Reply

    • mroldman

      May 18, 2016 at 11:21 am

      Draft is not required under Field 46A except for the case where it is drawn on the appilcant for some purpose. If it is the case, it should be included in the documents sent to the applicant.

      However, please note if LC requires Beneneficiary’s cwertificate certifying one set of SHIPPING DOCUMENTS…, the shipping documents do not include drafts.

      Note:
      ISBP 745 para 19(a) explains “shipping documents” as all documents required by the credit, except drafts, teletransmission reports and courier receipts, postal receipts or certificates of posting evidencing the sending of documents.

      Reply

  3. VV

    November 2, 2017 at 10:33 am

    Hi Mr. Old Man,

    What clause we need to mention in the LC of the BL is issued before the LC issuance date.

    Reply

    • mroldman

      November 2, 2017 at 2:46 pm

      Sub-article 14(i) allows documents to be dated prior to the issuance date of the LC unless prohibited by the L/C.
      So, no need to add any clause if you expect B/L to be dated the issuance date of the L/C.
      If you do not want the B/L to indicate the issuance date prior to the issuance date of the L/C, L/C may state the following clause: BL dated prior to the issuance date of the L/C is not acceptable.

      Reply

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