LC EXPIRED

QUERY
LC Expired! What should I do?

Hello All!

I find myself in a bit of a tough situation. I have an LC that a customer opened to me and it has expired 2 days ago. I am still waiting on one of the documents from my supplier (SDR) in order to submit the entire package to the bank. Since the LC has already expired, what do I need to do in order to collect payment?

Craig, MIAMI, FL
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COMMENT

L/C expired

Hi Craig,

(1) Contact the applicant to have L/C expiry date and/or the last day for presentation extended; or
(2) Ask your bank to forward the documents to the issuing bank on approval basis.

The first solution is safer and much better as you may negotiate the complying documents with the nominated bank.

I do not mean the second is worse as L/C by nature is a payment instrument rather than a means of refusal, and that importers open L/Cs is to receive and not to refuse the goods unless the price of goods drops dramatically. If you are a reliable customer, the nominated bank will also agree to negotiate the discrepant documents, of course, on a with recourse basis.

Best regards,
Nguyen Huu Duc
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