WHERE THE PLACE OF EXPIRY AND AVAILABILITY ARE NOT THE SAME

QUESTION

Dear Mr. Old Man,

I have a case relating to the place of expiry and the availability of LC:

LC states:

Field 31D: Date and place of Expiry: 31082015 Vietnam

Field 41A: Available with…by

Kuveyt Turk Katilim Bankasi A.S., Turkey by Payment

Field 48: Period for presentation

21 days from shipment date but within credit Validity

Beneficiary presents Bill of Lading showing shipment date as 21/07/2015.

As per Article 6 (d) ( ii) of UCP 600, the place of the bank with which the credit is available is the place for presentation

Therefore, in my opinion, the place for presentation is Turkey and period for presentation is 21 days from shipment date (21/07/2015). Accordingly, documents must be presented latest: 11/08/2015 in Turkey

Please give your idea.

Looking forward to receiving your reply

Thank you!

LC

————

ANSWER

Hi,

It is normal that the availability and the expiry place would be one and the same. If Field 41A states “available with the issuing bank by payment or by acceptance or by deferred payment”, then the expiry place in Field 31D should state “at the issuing bank’s counter”.

However, in practice, we sometimes come across LCs available with the issuing bank while the expiry place being in the beneficiary’s country. This practice is uncommon but acceptable.

By so stipulating, the issuing bank intends to allow the beneficiary to make presentation to any bank in the beneficiary’s country and the issuing bank would honour if the beneficiary presents complying documents to the bank in his country within the expiry date irrespective of whether or not the documents reach the issuing bank within the expiry date.

(If the issuing bank intends that it will honour when complying documents are presented to its counter within the expiry date, it should stipulate the place of expiry and the availability to be at its counter, and should not stipulate as in your case)

I hope my answer can help you.

Kind regards,

Mr. Old Man