WHERE A PLACE OF EXPIRY IS THAT OF THE ISSUING BANK

QUERY
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From: Lakshman Edward
Sent: Tue 6/29/2010 1:32 PM
To: Nguyen Huu Duc (DNG)
Subject: Place of Expiry under LC

Hi,

I was quite impressed about some of yr views on Documentary Credit issues. In your opinion what are the practical problems to a beneficiary if the DC indicates a place of expiry that of the issuing bank?

Awaiting yr response.
Thanks & best rgds

Edward
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COMMENT
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From: Nguyen Huu Duc (DNG)
Sent: Wed 6/30/2010 12:51 AM
To: Lakshman Edward
Subject: RE: Place of Expiry under LC

Hi Edward,

If a place of expiry for presentation indicated in the DC is that of the issuing bank, a presentation by the beneficiary or on behalf of the beneficiary must be made to the issuing bank on or before the expiry date, that is to say, the documents must be received by the issuing bank prior to the expiry date.

Please also further note that the fact that the documents are dispatched by the beneficiary prior to the expiry date does not always guarantee that they can be received by the issuing bank prior to the expiry date. It takes time (beyond the beneficiary’s control) for the documents to be forwarded from the beneficiary’s country to the issuing bank’s.

The beneficiary may face the problem that the issuing bank can raise the discrepancy “late presentation” or “DC expired” in case the documents reach the issuing bank’s counter after the DC has expired.

If the place of expiry is indicated in the DC as that of the issuing bank, it also means that the DC is available with the issuing bank. The beneficiary under this type of DC can not negotiate the documents as in the case where the DC is available with any bank by negotiation.

Best regards,
Nguyen Huu Duc

P/s: It’s over mid-night already, exactly 0:50 AM. Good morning!!! Very sorry that Japan lost 5-3 to Paraguay after the penalty shoots-out..