Letter of Credit Forum

Dear all,

We have enterd into a contract with one of our suppliers providing for payment to be in four equal monthly installments and accordingly passed our request for the issuing bank to issue a L/C in favour of our supplier with such terms:

$xxx,xxx payable one month from B/L date

$xxx,xxx payable two months from B/L date ...etc

One week later a message received by the issuing bank from the confirming bank states that the L/C was advised to beneficiary with out confirmation and requests us (as an applicant) to alter the terms of pymt to read:

$xxx,xxx payable not earlier than one month

$xxx,xxx payable not later than two months ...etc.

As the wording "ealier" and "later" are not mentioned in the UCP600 and constitue a vague statments we do not prefer to use them hence, we replied as follows:

$xxx,xxx payable 30 days, 60days ...etc.

Again a message received from the confirming bank stating that:

Pz note in the absence of your response to our specific quetion we consider that pymt terms to mean 'not earlier than...' and that they are not payable on a specific due date.

We tryed to link the aforesaid words with the UCP600, however, we found the nearst Art. to these wording is Art. 3 Interpretations Para 7 :

The expression "on or about" or similar will be interpreted as a stipulation that an event is to occur during a period of five calendar days before until five calendar days after the specified date ...etc.

And accordingly we replied if the above is the intention of the confirming bank we have no objection to accept that, however, we would prefer to use the same wording of the UCP600 i.e on or about one month, two months ...etc.

A third message from the confirming bank:

Plz note that we cannot unerstand how the term 'not earlier than ' relates to Article 3 of UCP600.

Dear all, please help with following:

Do you think that "not earlier" means not before than the relative number of days for each individual portion, but it can be more than one month, two months, or even more the 10 yeats?

Do you think that "not later" means not more than the relative number of days for each individual portion, but it can be less than one week or even one day?

Why the confirming bank insist to use such phrasing?

Thanks & regards

Ghubshawi