MATURITY DATE

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QUESTION

Dear Mr. Old Man,

Please advice me for this situation:

We issue a LC tenor: 120 days after sight

On 6 Nov 2014 we received a set of documents from the presenting bank which cited the following discrepancy on its cover letter “Certificate of Origin indicating different invoice”.

On 12 Nov 2014, we informed the presenting bank that we were holding the documents waiting for the presenting bank to replace the certificate of origin with the new one with correct invoice number and that the tenor would be 120 days after we received the correct document instead of 120 days after the day of the first presentation.

On 18 Nov 2014, we received the correct certificate of origin as required, but the cover letter said that the reimbursement instruction remained unchanged.

How should the maturity date be calculated? 120 days after the day of the first presentation or 120 days after the day the correct certificate of origin is re-presented to us?

Thank you so much.

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ANSWER

Hi,

By citing the discrepancy on the cover schedule, the presenting bank appeared to have sent the documents to your bank on approval basis.

Your bank was correct in giving notice of refusal in accordance with Article 16 UCP 600 notwithstanding that the presenting bank cited the discrepancy on its covering letter.

The maturity date will be 120 days after your bank receives correct certificate of origin as required. ISBP 745 paragraph B5 (b) (ii) is also applicable to this case.

Kind regards,

Mr. Old Man