QUESTION
Hi Mr. Old Man,
1/ I’ve studied some LCs from the Internet and found out that most of the presentation period is within 10-15 days. Is it enough time considering it may take longer to send the documents overseas? Not to mention that the courier may have some difficulties that may delay the shipment of the docs.
2/ LC requires among other documents:
BENEFICIARY’S CERTIFICATE STATING THAT 1 SET OF ORIGINAL SHIPPING DOCUMENTS INCLUDING 1/3 ORIGINAL BL HAS BEEN SENT DIRECTLY TO ACCOUNTEE BY COURIER
Does this clause potentially harm the seller?
Thank you!
Tengku
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ANSWER
Hi,
1/ Depending on the distance between the port of loading and the port of discharge, the period for presentation of documents may be required to be longer or shorter.
Shipment by sea from Singapore to Vietnam takes only 10-12 days, so a presentation period of 10-15 days is appropriate. Meanwhile, shipping by sea from the US to China can take 30- 45 days, or even longer if the ship goes through many different ports. Thus, the applicant does not care about the long or short presentation period, the longer the better. However, if the LC does not specify otherwise, this period is automatically 21 days after the shipment date, but in any event not later than the expiry date of the LC.
Documents sent by express courier usually take only 2 to 3 days to arrive. Even if the LC stipulates a long presentation period, e.g., 21 days, the beneficiary who wants to receive early payment needs to prepare the necessary documents and present them as soon as possible (2-3 days after shipment).
2/ For shipments that may arrive at the port of discharge before the required documents are sent to the issuing bank, the LC may stipulate that 1/3 original BL will be sent directly by the beneficiary to the applicant so that the issuing bank can endorse the BL for the applicant to take delivery of the goods to avoid paying demurrage charges.
Please note that if the LC requires BL issued to order blank endorsed or to the order of the applicant, the experienced beneficiary never accepts that clause, i.e. do not accept sending 1/3 original BL directly to the applicant because the beneficiary accepting such a term may face the risk of not being paid by the issuing bank when the presented documents contain discrepancies that the applicant has not waived while the applicant may have presented the 1/3 original BL to the shipping line to receive the goods.
Best regards,
Mr. Old Man
