Mr Old Man Q&A D/P AT XXX DAYS AFTER BL DATE By Mr Old Man Posted on January 22, 2014 4 min read 32 1 16,553 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr QUESTION Dear Mr. Old Man, As far as I know there are only two types of collection: D/P (Documents Against Payment) and D/A (Documents Against Acceptance). However, I’ve just heard about a strange collection: D/P at xxx days after BL date. Please let me know if there is such a strange collection. If there is, what is the difference between D/P at sight and D/P at xxx days after BL date? Looking forward to hearing from you soon. Thanks and best regards, TB —— ANSWER Hi, According to Article 2 URC 522, collection means the handling by banks of documents in accordance with instructions received in order to (i) obtain payment and/or acceptance; or (ii) deliver documents against payment (D/P) and/or deliver documents against acceptance (D/A); or (iii) DELIVER DOCUMENTS ON OTHER TERMS AND CONDTIONS , i.e., – delivery of documents against partial payment; – delivery of documents against promissory notes; – delivery of documents against letters of underatking to pay; – delivery of documents against a trust receipt; – delivery of documents against bank undertaking (bank’s avalization)… – (and of course) delivery of documents against payment of a draft at xxx days sight or after BL date. It is agreed that of the above types of collection, D/P and D/A are the most popular terms. D/P at xxx days sight or xxx days after BL date is not too strange. I sometimes come across such type of collection instruction. Under a D/P collection, the collecting bank can only deliver the documents against the drawee’s payment at sight and must remit the payment to the remitting bank immediately. Under a D/P at xxx days after BL date, the collecting bank should obtain the acceptance of the tenor draft and should retain the draft and commercial documents, including transport documents, until the drawee pays the draft at maturity. The collecting bank has no authority to surrender the documents except upon payment. Please bear in mind the key words “documents against payment” which means that in any case the collecting bank can only release the documents to the drawee when the drawee pays the accepted draft. Kind regards, Mr. Old Man
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
CAN THE ISUING BANK CITE “LATE PRESENTATION” AS A DISCREPANCY SOLELY BASED ON THE DATE OF THE COVER LETTER?
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
CAN THE ISUING BANK CITE “LATE PRESENTATION” AS A DISCREPANCY SOLELY BASED ON THE DATE OF THE COVER LETTER?