EXPIRY DATE

Prabhuseetharaman's Query on Expiry Date

Hi,

I have a doubt regarding expiry date. Let us take the following case:
L/C available with ABN AMRO Bank, China By Acceptance. Expiry date is 25/01/08.
Benefeciary presented the docs to ABN AMRO, China on 25/01/08.
In the above case what time limit does the nominated have to check the docs and forward the docs to the issuing bank. Since the credit is expiring on 25/01/08

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Mr. Old Man's Response to Prabhuseetharaman's Query on Expiry Date

Dear Prabhuseetharaman,

Expiry date is understood as the last day for the beneficiary to present the documents to the nominated bank/issuing bank. The nominated bank has a maximum of five banking days following the day of presentation to determine if the presentation is complying.

As in your example, the beneficiary presented the documents on the expiry date, i.e., 25 Jan, 2008, the nominated bank (ABN AMRO) has five-banking days following the date of presentation to examine the documents. The deadline for ABN AMRO to determine whether or not the documents are complying is 1 Feb, 2008 (23 & 24 Jan, 2008 are not calculated as banking days as they fall on Saturday and Sunday).

UCP has no articles stipulating the deadline for the nominated bank to forward the documents to the issuing bank. Thus, it can be understood that the nominated bank is not compelled to forward the documents within the time frame of the five banking day rule. However, the nominated bank should forward the complying documents to the issuing bank as soon as possible. There are reasons for this: (i) the nominated bank may receive the reimbursement from the issuing bank earlier; (ii) the beneficiary may have the documents (bill of lading) to receive the cargo in time.

Regarding extension of expiry day or last day for presentation, you are requested to further refer to Article 29.

Best regards,
Nguyen Huu Duc …