My query is regarding Article 15. a of UCP600. The Article states "when the issuing bank determines that document is complying, it must honor".
However there is no fixed deadline to "honor" a complying presentation. If a bank has malicious intention and delays willingly to determine the complying presentation, how the beneficiary and/or negotiating bank's interest will be protected?
Timeframe For Honoring Complying Presentation
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Nayeem73
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ak2expert
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As per my Understanding
Hi. Pal,
There are two points to note...1st complying presentation for which issuing bank has 5 days to determine as said by picant...& 2nd point is if presentation is complying then when it would be honoured...for this article 2 point a b & c clearly mentions...
Honour means:
a. to pay at sight if the credit is available by sight payment.
b. to incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment.
c. to accept a bill of exchange ("draft") drawn by the beneficiary and pay at maturity if the credit is available by acceptance.
other's comments welcome...
There are two points to note...1st complying presentation for which issuing bank has 5 days to determine as said by picant...& 2nd point is if presentation is complying then when it would be honoured...for this article 2 point a b & c clearly mentions...
Honour means:
a. to pay at sight if the credit is available by sight payment.
b. to incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment.
c. to accept a bill of exchange ("draft") drawn by the beneficiary and pay at maturity if the credit is available by acceptance.
other's comments welcome...
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Navi
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without delay
Hi everybody,
We consider LC is a sight payment LC.
5 working days period mentioned in UCP to determine whether a presentation is complying but not mentioned any time frame to honour after presentation found complying. In my opinion, applying a fixed time for instance 2 days after determining compliance, would cause payments under LC would delay extra two days. A rule not to permit any time period for payment after compliance, might be impossible due to different time zones, inner procedures of bank or country which may not make it possible to remit any funds on the same day or else.
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In my opinion, after presentation found complying, issuing bank must honour without delay, as soon as possible. İf possible the same value date, otherwise following date.
Other comments appreciated
We consider LC is a sight payment LC.
5 working days period mentioned in UCP to determine whether a presentation is complying but not mentioned any time frame to honour after presentation found complying. In my opinion, applying a fixed time for instance 2 days after determining compliance, would cause payments under LC would delay extra two days. A rule not to permit any time period for payment after compliance, might be impossible due to different time zones, inner procedures of bank or country which may not make it possible to remit any funds on the same day or else.
.
In my opinion, after presentation found complying, issuing bank must honour without delay, as soon as possible. İf possible the same value date, otherwise following date.
Other comments appreciated
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quang
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