LC Does Not Mention Shipment Period Or Deadline

[shahriar]

dear all,

this is a quote from mr. tolee

Some L/Cs give unclear instructions, which may be due to negligence. But when disputes arise, the banks may use such grey areas to trigger a dishonour. To give an example, I saw an L/C from India that called for presentation of the usual documents, bill of lading, insurance certificate, and so on, but specified no shipment period or deadline. That was to advise separately by an amendment at a later date. This L/C in fact would be inoperative until the issuing bank sent out an amendment to set a shipment period or deadline. If the amendment never came, the irrevocable L/C would actually be working like a revocable L/C. When I asked the client why he accepted such an L/C, he told me frankly that he did not realize the risk until it surfaced. 'Even if I knew about it early I could not do anything about it as at that time, it was the buyer's market,' he added. So avoiding such problems is easier said than done.

could someone make this simpler for me

regd

shahriar

[aziz]

HI! MATE,

Guess it is related to a pre-advise DC.

Forget what customer assumed, the said DC isn't an operating instrument until received of amendment by the advising bank.

May be it was opened with the intention to make fraud.

Client might have stepped in the fraud stars trap.

[shahriar]

Thank you sir. at last someone answered my question!!

regd

shahriar