Why Date of Expiry and Latest Date of Shipment Cannot be Same?

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umit1492
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Why Date of Expiry and Latest Date of Shipment Cannot be Same?

Post by umit1492 » Sun Aug 27, 2017 9:52 am

dear all

we have a letter of credit in which we are requesting from issuing bank to whrite in mt700 as below:

31d : date and place of expiry : 20/12/2017
44c latest date of shipment : 20/12/2017

the bank insisting that the date of these 2 fields can not be the same but they do not refer to any rules or regulation in UCP or ISBP for this objection .

can any one explain why these 2 fields can not be the same and on which logical basis.

b.regards
omid

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picant
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Ehm......

Post by picant » Mon Aug 28, 2017 9:08 pm

Hi Pal,

if field 31d indicates beneficiary's place, no hamper if the beneficiary will run to the nominated bank with full documentation, including transport document, and so availing correctly the l/c.
Naturally, the gap -date of expiry-shipment date must consider a period of time in delivering goods and obtaining the transport documents..... but.....
Art 14 c UCP600 a defaulting time in 21 days, but this period may be shorter or longer due to origin/destinaton lieus.
Other comments appreciated ciao

PRITISH24
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Post by PRITISH24 » Tue Aug 29, 2017 8:58 am

Theoretically both the dates can be same.
UCPDC does not prohibit the same.

cristiand969
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Calculation

Post by cristiand969 » Wed Aug 30, 2017 4:07 pm

The standard calculation of time involving these two dates is : latest date of shipment + period of presentation = expiry date. Therefore if you allow a certain time of presentation after shipment date these two dates would be different. However, the credit can be issued with both date equals in case the standard calculation makes the credit extended for an additional quarter for which the applicant does not want to be charged.
In this case (with both dates equals) the credit will state in field period of presentation: within xx days, but within credit validity.
That means if the beneficiary chooses to ship the goods on the latest date of shipment, he no longer benefits of the stated period of presentation and should present the documents within the same day. But it does not mean this will be contrary to the provisions of UCP. Remember that art 1 of UCP allows any deviation from the standard rules, provided the L/C will be workable.
Hope it helps you!

LOAN
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Re: latest date of shipment

Post by LOAN » Wed Sep 13, 2017 10:29 am

Neither any art. in UCP600 nor any paragraph in ISBP prohibits a stipulation of that expiry date equals to lastest shipment date. This depends on calculation of time, good will, well cooperations between applicant and beneficiary to raise that frame of time.

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Re: latest date of shipment

Post by SANUSILAMIN » Wed Sep 13, 2017 6:19 pm

DEAR OMID KLILI

I AGREE WITH ISSUING BANK REPLY BECAUSE WHEN YOU LC SHOWN THE SAME DATE IN FILED NO.44C&31D THAT WILL MAKE DISCREPANCY WHEN THE BENEFICIARY PRESENTS THE REQUESTED DOS AS FOLLOWS :
1.LATE PRESENTATION BECAUSE OF PERIOD OF PRESENTATION ACCORDING TO ARTICLE NO.48 ( SEE MT700)
2.STALE DOCUMENTS.
SO I ADVICE YOU TO WRITE THE EXPIRY DATE IN THIS WAY LATEST DATE OF SHIPMENTS PLUS 21 OR 30 DAY.
REGARDS

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Re: latest date of shipment

Post by SANUSILAMIN » Thu Sep 14, 2017 6:12 am

Dear all

IMHO,If the Expiry date of Credit Letter be same with the latest date of shipment , descrapancies will surely happen because the Expiry date equals shipment date that the main reason for late presentation and stale docs.
REGARDS

cristiand969
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Re: latest date of shipment

Post by cristiand969 » Fri Sep 15, 2017 2:23 am

First of all we have to take into account that a quick benef's action in docs presentation of documents on the same date as shipment occurs only in case the shipment is effected on the latest date of shipment as provided in L/C. If shipment is prior to this date, then the period of presentation will prevail provided expiry date is not exceeded.
.
On the second case: LDS = expiry date, in practice beneficiary and shipping agency prepare well in advance docs regarding shipment. Therefore, at the time of goods are on board the vessel, benf' already has B/L released by shipping co and is ready to surrender the set to the bank.
.
On the other hand what's happening in practice differs from theory and rules ..... benef's bank would cooperate with beneficiary confirming receipt of docs in time (shortening therefore their checking time from 5 working days to let's say 3 working days ). Of course this would not be possible if the credit is available with issuing bank only.
.
regards
C

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Re: latest date of shipment

Post by kmahdy » Wed Sep 20, 2017 4:32 pm

Dear Friend ,

UCP states that if no period for presentation is mentioned it will be by default a 21 days ,

they did not mention any thing regarding the gap period between expiry date and latest shipment date

so its subject to the contract and the applicant and beneficiary's arrangement

regards

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Re: Why Date of Expiry and Latest Date of Shipment Cannot be Same?

Post by L59099 » Sat Sep 30, 2017 11:07 pm

it's the practice to have the gap between the expiry date and the latest shipment date so that the Ben have time to prepare docs and present it on time. if the applicant and the beneficiary have a discussion that it's the same day, a bank can issue the Lc to state the expiry date only without indicating the latest shipment date; however LC also show that "the shipment date must be within the validity of LC"

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Re: Why Date of Expiry and Latest Date of Shipment Cannot be Same?

Post by dv01001 » Tue Oct 03, 2017 10:18 pm

it can be the same but LC also needs to show that the expiry date will deem to the latest shipment date so that the bank can check if docs has discrepancy - late shipment or not

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Re: Why Date of Expiry and Latest Date of Shipment Cannot be Same?

Post by dimasnegara » Sun Oct 08, 2017 9:18 pm

in your case, bank should check 3 kind of date:
latest date of shipment
expiry date of LC
latest presentation date
in your case 3 date above should be same so there is no conflict between that date

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