Need your help on the below case :
LC states : Bene cert
certifying all the documents has sent to applicant within 3 days.
Bene
cert presented shows "All documents has sent to applicant within 72
hrs" ... Issuing bank has rejected the document stating
Bene cert showing docs sent within 72 hrs I/O 3 days .... Is it a
valid discrepancy ... ???
Thank you ... !!!!!!
Is it really a valid discrepancy???
Hi, smmujeeb.
It is really strange and true how sometimes we find our selves in a situtaion that keeps us confused on a small thing.
1) lc states ''bene cert certyfing all the docs has sent to applicant within 3 days'' so as per the documents on their face they have been sent within 72 hours.
2) if the l/c had had stated ''negotiated documents to include a certificate from the beneficiary stating ''We certify that the documents have been sent to the applicant within 3 working days from the date of bill of lading'' then you could reject the documents saying that certification on benenfifciary's certificate is not as per credit terms.
I think that you should, before rejecting the documents send a copy of the certificate to the applicant and check with him if it is acceptable to him and to let you give his instructions in writing that this discrepancy is acceptable to him.
So i dont think this should be a valid discrepancy.
Good luck and i hope the matters is resolved soon.
asking applicant may not be a good idea
As an issuing bank, you have to honour a complying presentation. If you come to the conclusion that the presentation is not complying then you have to follow the instructions of UCP 600 article 16 in order to fulfil your obligations against beneficiary.
Letter of credit undertaking is given by the banks, not the any other third party including the applicant. As a result, you should not ask a potential discrepancy to the applicant.
Otherwise, you may be facing serious problems. Consider this scenario : Applicant informs you that they will not be accepting the document and you reject the presentation. If beneficiary feels that the presentation is complying they will sue issuing bank for compensation, not the applicant. Also remember that applicants and beneficiaries could have been agreed secretly to falsify the issuing bank.
International letter of credit consultancy services.
Bene Cert - it depends
Hi Smmujeeb,
Of course my answer would be it depends. I would say that it is not a valid discrepancy unless the beneficary certificate required specific language.
The reason that it is not a discrepancy is the interpretation. Think of it this way:
If the shipment was done on Monday, then we would expect that the documents would be sent by Thursday, as we would not count Monday, Tuesday would be day one, Wednesday would be day two and Thursday would be day three.
If the shipment was at noon on Monday, then the documents would be sent by noon on Thursday.
I would also like to add, if the shipment was on Monday, March 1st and the certificate stated that the documents were sent on Thursday March 4th, it would be acceptable.
Once again, if the credit required a specific statement, then it would be a discrepancy. For example, the letter of credit would have stated beneficiary statement reading as follows: "Documents have been sent to applicant within 3 days after shipment."
I hope this helps you out.
Best regards,
LC Sam
For me, discrepency is not valid
if the issuing bank rejects documents just because it was written 72 hours instead of 3 days on the beneficiary's certificate; it is really hard for me to understand this decision.
For me, discrepency is not valid.
i do not want to speculate further on the situations where I have limited information but here is my reason;
* "ISBP Article 17)The term “within” when used in connection with a date excludes that date in the
calculation of the period."
As can be seen above the date of the event must be exculuded from the calculation. As a result 72 hours=3 days and there is no valid reason to reject letter of credit presentation.
Regards,
International letter of credit consultancy services.
It is not a discrepancy!
One should his/her use common sense to determine if the document is complying with the LC terms and conditions.
Regards,
Nguyen Huu Duc