CAN AN EXPIRED LETTER OF CREDIT BE AMENDED TO EXTEND THE EXPIRY DATE?

QUESTION

Dear Mr. Old Man,

Can an expired letter of credit (LC) be amended to extend its expiry date?

Is there any rule that explicitly prevents such an amendment?

Thank you,

P.

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ANSWER

Hi P.,

The short answer is: it depends.

Under UCP 600, sub-article 10(a), a letter of credit—unless otherwise stipulated under Article 38 (transferable credits)—cannot be amended or cancelled without the agreement of the issuing bank, the confirming bank (if any), and the beneficiary.

Once a credit has expired and no complying presentation has been made, the issuing bank’s obligation under that LC is considered lapsed.

However, from a practical standpoint, some issuing banks may still consider amending an expired LC to extend the expiry date, provided that the following conditions are met:

1. The bank’s internal policies and regulations allow for such amendments;
2. The applicant (buyer/importer) formally requests the extension;
3. The amendment does not expose the bank to additional risk or compromise the applicant’s repayment ability;
4. The bank has reasonable grounds to believe that:
   • The advising bank will be willing to notify the amendment, and
   • The beneficiary (seller/exporter) will accept the extension.

While amending an expired LC is not explicitly forbidden by UCP 600, it is not standard practice. Most banks would require a new LC to be issued rather than attempt to amend a credit that no longer carries any obligation.

In summary, although there is no specific provision in UCP 600 that prohibits amending an expired LC, it becomes a matter of discretion and internal policy. It’s uncommon, but not impossible—depending entirely on the bank’s risk appetite and relationship with the applicant.

Best regards,

Mr. Old Man