AMENDMENT TO EXTEND THE PRESENTATION PERIOD

QUESTION

Hi Mr. Old Man,

Could you please help me with the following case:

We are the beneficiary of a confirmed L/C available with the confirming bank by deferred payment.  After shipment, we made a presentation to the confirming bank that refused to honour because one of the presented documents was discrepant. We could not replace the discrepant document with the corrected one because the time for presentation was over. The confirming bank forwarded the documents as received to the issuing bank.

Notwithstanding the discrepancy, the issuing bank informed the confirming bank that the documents were accepted and the payment would be effected at maturity.

I want to know whether it is possible for the issuing bank to issue an amendment to extend the presentation period so that we can re-present the corrected documents to the confirming bank and get the confirming bank’s undertaking to pay at maturity.

RM

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 ANSWER

Hi,

You may know that an L/C cannot be amended without the agreement of the issuing bank, the confirming bank (if any) and the beneficiary. I am afraid that the confirming bank in your case may not agree to the amendment to extend the presentation period as the presentation has been made late and its payment obligation under the L/C ceases.

The fact that the issuing bank confirms its acceptance of the discrepant presentation and undertakes to pay at maturity is good enough for the beneficiary. There’s no need for any amendment.

As the issuing bank has undertaken to pay at maturity, you may have such payment undertaking discounted by the confirming bank to get the money before due (of course, with the agreement of the confirming bank).

Kind regards,

Mr. Old Man