Mr Old Man Payment Q&A Negotiation Credit with Expiry in the Issuing Bank’s Country: Where Should Documents Be Presented? By Mr Old Man Posted on 6 seconds ago 4 min read 0 0 0 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr A negotiation credit is normally expected to expire in the beneficiary’s country, where the nominated bank is located. But what happens when an L/C is available by negotiation with any bank in the beneficiary’s country while the place of expiry is stated in the issuing bank’s country? This question highlights an unusual drafting issue that could expose the beneficiary to the risk of a late or expired presentation. Let’s examine the practical implications under UCP 600. Question Hello Sir, I have a question regarding an MT700. An L/C is issued by a bank in London. The beneficiary is in India. In field 31D, the place of expiry is stated as London. The credit is available by negotiation with any bank in India. Where should the beneficiary present the documents? What if the L/C expires before the documents reach the issuing bank? Mohammad Waseem _______ Answer Dear Mr. Waseem, Thank you for your question. As a matter of international banking practice, when a credit is available by negotiation with a nominated bank in the beneficiary’s country, the expiry place is normally stated in the beneficiary’s country, not in the country of the issuing bank. In your example, the beneficiary should first request the issuing bank to amend the credit so that the place of expiry is changed from London to India. If no amendment is made, the beneficiary should not wait until the last moment. Instead, the documents should be presented to a nominated bank in India, preferably the beneficiary’s regular bank, as early as possible for negotiation. Although the credit is available with any bank in India, the place of expiry remains London. Therefore, if the documents do not reach the issuing bank by the expiry date due to courier delays or other unforeseen circumstances, the issuing bank may refuse the presentation on the grounds that the credit has expired. In short, this is a drafting issue that should ideally be corrected by amendment. If that is not possible, the beneficiary should present the documents to a nominated bank well before the expiry date, allowing sufficient time for the documents to reach the issuing bank if necessary. Best regards, Mr. Old Man