Negotation Bank Raise Decrepancies Due To Late Presentation

[dua]

dear all,
Our situation
- Our bank represent bills quote dated 17.11.2008 on the covering letter.
- As per L/C stipulated the latest representing is 14.11.2008
and the customer's representation has been complied with the L/C terms and conditions on 14.11.2008
but the negotation bank said that we have decrepancies due to late representation.
As UCP 600, art14 (b), we have a max of 5 banking day following the day of representation to determine if a presentation is complying.
that means we have no derepancies.
what are your ideas about it?
besides, people said that we should certify on the covering letter about complying representation of the customer if we send docs after the latest representation as per L/C stipulated.
do we need do like that?

[shahriar]

Who is actually refusing the presentation? Issuing bank or negotiating bank? Whats the status of your bank in the lc?

[dua]

our bank is the negotiation bank
the issuing bank refuse us due to discrepancies

[shahriar]

dear dua,

i think i will agree with the people. its always a good idea in such cases to write a note ensuring that all terms and condition complies. or else in most cases issuing bank will raise such discrepancies. however things are not over yet. you can still inform the issuing bank that you have received the document on or before the maturity date. i have seen few ICC statement on this issue. in most cases ICC concludes that the issuing bank "should" inquire with the nominated bank unless the nominated bank write on their covering schedule that all terms.....

hope that will help.

regd

shahriar

[dua]

dear shahviar.,
ICC advise that we "should" certify the complying presentation within the time limit.
What do you think when we must certify as above by the return SWIFT to the issuing bank?
thanks

[iLC]

i can say my practice. whenever our covering schedule is dated after the expiry of the LC, i add this clause. you may argue with the 5 day examination clause. but i cant blame the issuing bank if they does come with the discrepancy "late presentation". because unless you tell them, there is no way to know that the document was presented within time. consider a scenario where you received the document day after the expiry, refused to act on our nomination and simply forward the document to the issuing bank on the same date.

however in such cases generally it is said that the issuing bank should "inquire" with the presenting bank. but to meet the 5 days dead line it may be better to raise a discrepancy.

[cristiand969]

Dear ILC,
Very good answer. However, I differ in opinion. it is difficult for the issuing bank to prove late presentation keeping in mind that each bank has 5 working days to determine that presentation is compliant or not. This is the first though the issuing bank should keep when checking documents.
A discrepancy must be made on actual facts an not on the assumption that negotiating bank may have received documents after the date of presentation.
In my view such discrepancy, in the light of described facts, is a payment excuse of the issuing bank.
I know that several banks add the clause about documents are presented in due time, others just say" all terms and conditions comply with' clause which implies also that documents were presented in due time.
From the logical point of view the certification of docs presented in due time is mandatory for the negotiating bank when presentation was made the next working day after expiry date and such expiry date falls on a non-working day and also nego bank sent documents in the fifth working day after presentation. In this case absence of certification clearly implies a discrepancy.
On the other hand it should be noted that late presentation is not a valid discrepancy as late presentation means (see ISBP) docs presented more than xx days after the date of shipment. Rather 'credit expired' would better justify that. In this respect issuing bank has adviced an invalid discrepancy.
regards
Cristian

[iLC]

dear cristian,

i agree that i was but rigid on this issue. i agree with. besides ICC opinion r 373 says the same thing

It must be remembered that the dating of a schedule after the last permitted date for presentation or expiry may not be as a result of the above, but that the "reasonable time" the bank took in handling the documents meant dating the schedule after the permitted date.

about late presentation, i have a weak protest to make.

to me "LC expired" is always a invalid discrepancy. because its not something related to presentation. rather late presentation is more related presentation. i think UCP supports my view in article 6c.

[cristiand969]

Dear ILC,
I am not going to argue on that.
Simply I have quoted some forms of discrepancies which I have found both in CDCS manuals, ICC opinions and other relavant publications. And I together with my staff chose to use them in this line when making discrepancy advice. It is for each bank to choose its way, however in a form recognized in the International Standard Banking and Practice. I do not claim you are wrong. Just justify my position. To expand a little on this topic, let me quote from CDCS manual a relevant position which is true but somehow different on what most of us would practice.
The documents have been presented before the expiry date of the Credit.
Document checkers will be aware that technically an expired Credit is not a discrepancy, but a non-existent Credit. However, most banks, to facilitate the Credit and as an accommodation to the presenter treat ‘ Credit expired’ as a discrepancy and advise the presenter accordingly.

[iLC]

dear cristian,

im not aware of the CDCS guide. im still a poor Non-CDCS
but i think the quote is supporting my view
isnt it?

[cristiand969]

Dear ILC
Just drop it...
Either we are going to debate long time on this issue or we both are philosophers... :lol:

As far as I am concerned I consider the discrepancy ' late presentation' as related to the period of XXX days after the shipment' as the Publications in place make reference to.
regards
Cristian

[iLC]

take care. c u later

[dua]

dear cristiand969
you said that you have CDCS manuals
Would you like to pleasure if I borrow it from you?
If you have soft files, pls remit to me?
thanks so much

[cristiand969]

Dear Dua,
In fact I have both hard and soft copies of CDCS manual.
However due to the fact that is copyrighted and also that I have a great respect for people who worked so hard to produce such document I'm afraid I cannot share it.
I hope you understand my position.
regards
Cristian

[berry]

i have the softcopy (scanned image). but its too big to send by mail about 30MB

[dua]

dear cristiand969
don't worry, thanks

[dua]

dear berry
Can you devide Docs into some parts?
Pls share to me.,
thanks so much