MUST THE ISSUING BANK PAY IF THE CORRECTED DOCUMENT IS PRESENTED WITHIN THE PERIOD FOR PRESENTATION AND WITHIN THE LC EXPIRY?

Sword Lake, Hanoi

QUESTION

Dear Mr. Old Man,

We made a presentation to the issuing bank. However, the issuing bank refused due to a discrepancy on the invoice and is holding the documents. Can we replace the discrepant invoice with the corrected one?

If yes, please provide us with ICC opinion. We are afraid the issuing bank will not accept the new document.

Thank you very much.

Best regards,

BD

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ANSWER  

Hi,

Don’t worry! If the corrected document is re-presented within the specified period for presentation and within the expiry date, the issuing bank must pay.

I would like to quote hereunder ICC Opinion TA764rev:

QUOTE

The initial presentation was held pending further instructions from the presenter. The beneficiary had until the expiry of the L/C to replace or correct any documents. A bank that is holding documents may return them at any time, as stated in sub-article 16 (e). It should be noted, in the circumstances of this case, that if an issuing bank returns the documents to the nominated bank, but in the meantime the beneficiary has corrected or replaced discrepant documents within the expiry of the L/C or the presentation period, the issuing bank will be obliged to honour when all the documents are subsequently returned to it and determined to be compliant.

UNQUOTE

Kind regards,

Mr. Old Man