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validity of the credit

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Tue, 01/31/2012 - 02:10
ERA
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I have letter of credit and expiry at beneficiary’s country. I mentioned clause number 48 as below,

 

Document should present within 7 days but validity of the credit.

 

Then supplier may present 7th days to avoid the discrepancies. But when receive original documents to applicant’s bank it will take 04 to 5 days.

 

In this situation I have to ask two questions-

 

1.If applicant apply shipping guarantee clearance due to not received original documents, applicant bank is asking lc amendment for expiry. Then should we amend the LC..?? because expiry at beneficiary’s country

2.If applicant bank received original documents after expiry. Before the release of documents applicant’s bank asking the lc amendment for the expiry. should we amend the LC..?

 

Kindly reply.. I have a big augments with my banker.

‹ What is Original BL & Surrender BL & telex release overdrawn presentation ›
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Tue, 01/31/2012 - 05:58
#1
Abrar
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Transit

Sorry, but this is a bit confusing, and if we knew your status, it might be a bit clearer

If the LC expires in the beneficiary's country, then, provided the beneficiary presents within the expiry, he has complied under the LC, and the subsequent transit time from the presenting bank to the issuing bank is immaterial, and is no longer governed by the LC. Consequences of delays, or loss in transit, is borne by the issuing bank/applicant, and the LC does not need niot be extended to accomodate the transit period.

In this situation, letters of indemnity, or the like, to obtain clearance and mitigate against demurrage is a matter for the applicant, and no longer a matter for the beneficiary, or a matter under the LC.

Apologies in advance if I've misread the question

             

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Tue, 01/31/2012 - 21:47
#2
ERA
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validity of the credit

thanks you very much for the comments

actually I'm little bit confuse still.

Example

 L/C will be expiry at Hong Kong   10/02/2012 . Beneficiary will present original BL & other documents to advising bank on 10/02/2012.then there is no discrepancies .however advising bank will get 01 days and they will courier it issuing bank within another three days. Meanwhile vessel already arrived and applicant’s need to clear this shipment on arrival on bank guarantee due to not received original document.

Now problem is coming….. when applicant go to apply shipping guarantee to issuing bank  they refuse to allow bank guarantee due to expiry letter of credit.  But as per the lc clause 48 expiry at beneficiary’s country. The why we should extend the LC..???

Kindly confirm

 

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Thu, 02/02/2012 - 23:50
#3
trangnq
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Joined: 02/02/2012
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ANSWER

Hi,

In my opinion, it is unnecessary to extend the LC because that presentation complys with LC.

As in yr example, Expiry: 10/02/2012 in beneficiary's country -> place and time of expiry for presentation is in ben's country.

When the shipment is delivered to the discharge port but the docs doesn't still come, depending on the trust of the applicant, they can request for a bank guarantee through a fax/copy of B/L, Notice of arrival, Commercial Inv,...to take the goods.

 

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