ON BOARD NOTATION & DRAFTS AND CALCULATION OF MATURITY DATE

From: Nguyen Huu Duc (DNG)
To: Ha Nguyen Thi (TTTM-HoiSo)
Subject: RE:

Dear Ha,

Thanks for asking for Mr. Old Man’s opinion.

1) ON BOARD NOTATION

You are requested to have a look at UCP 600 Article 20 (a)(ii), which says "A bill of lading, however named, must appear to indicate that goods have been shipped on board a named vessel at the port of loading stated in the credit by:

+ pre-printed wording, or
+ an on board notation indicating the date on which the goods have been shipped on board."

It is understood from the above stipulation that a b/l must indicate that goods have been shipped on board either by pre-printed wording like “Shipped in apparent good order”, “Laden on board”… or by a separate on board notation whether the port of loading is different from or the same as the place of receipt. So if the b/l in question does not contain such a pre-printed wording, then an on board notation is needed. .

To avoid any possible dispute in connection with on board notation, a full detailed on board notation which includes the vessel name and the port of loading and the date of shipment is encouraged, for example:

SHIPPED ON BOARD XYZ VESSEL
AT A PORT, VIETNAM
16 August, 2008

2) DRAFTS AND CALCULATION OF MATURITY DATE

ISBP para. 46 stipulates: “For drafts drawn "at XXX days sight", the maturity date is established as follows:

a. in the case of complying documents, or in the case of non-complying documents where the drawee bank has not provided a notice of refusal, the maturity date will be XXX days after the date of receipt of documents by the drawee bank.

b. in the case of non-complying documents where the drawee bank has provided a notice of refusal and subsequent approval, at the latest XXX days after the date of acceptance of the draft by the drawee bank. The date of acceptance of the draft must be no later than the date the issuing bank accepts the waiver of the applicant.”

As you already know, in LC transactions drafts are normally drawn on the issuing bank (drawee bank). So, if the documents presented are complying, the maturity date will be 30 days after the date receipt of the documents by the issuing bank. In case the documents presented are not complying and the issuing bank has provided a notice of refusal, the maturity date will be 30 days after the date of acceptance of the draft by the issuing bank but the date of acceptance of the must be no later than the date the issuing bank accepts the waiver of the applicant.

Hoping the response is helpful.

Do not hesitate to ask Mr. Old Man if you have further questions.

Best regards,
Mr. Old Man …