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Late presentation ...

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Mon, 11/16/2009 - 07:56
smmujeeb
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Presentation period : 10 days after onboard date of B/L

Ship on board : 1 Jan 09.

Presenting bank covering scheule shows : 15 Jan 09., and certifying that documents has bee presented within stipulated time mentioned in the credit.

But.,  draft is dated on 13 Jan 09., which is dated after 12 days from B/L onboard date..

My question is, does late presentation effected, as draft dated after 10 days from B/L onboad date or

Do we need to accept presenting bank covering schedule, which certifies dox presented within time limit.

Regards:Mujeeb

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Mon, 11/16/2009 - 15:34
#1
Abrar
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Late presentation

If the draft is dated later than the date of presentation, the presentation is discrepant under Art. 14 i. If the draft is dated the day of presentation (12th), the presentation is discrepant due to the fact that prsentation has been made after the 10 day period. So, in the former, the fact that the bank certifies that documents have been presented within the statutory period of time allowed, is of no consequence. In the latter, the bank's certification would be a false statement. A presentation under either scenario would be discrepant.  

The only instance where a presenting bank may/needs to certify to the issuing bank/confirming bank that documents have been presented within prescribed time limits, is where the latest date for presentation/expiry date falls on a non-banking day, and documents are presented on such latest date. In such cases, the time limit is extended to the next working day. Art. 29 a & b refer. The certification provided by the bank does not in any case, fall into this category, so would have no effect.

The bank is required to determine within a maximum of five banking days, whether the documents comply (Art 14b). If the documents do not comply, the rejection notice must be sent within the five days. UCP600 however does not prescribe any time limits regarding any action to be taken by the negotiating bank if the documents are compliant. If the documents do comply (and is valid at the bank's  counters), it is debatable whether it would be safe to argue that a document schedule dated later than say 21+5 days necessarily implies that "late presentation" has occurred. If the issuing bank/confirming bank has doubts about compliance with the "late presentation" period it can of course ask the question of the negotiating bank. If the negotiating bank certifies that documents had indeed been presented within the prescribed time limits, this certification would be binding on the issuing/confirming bank, unless of course it is patently obvious that (as in the above) this could not have been the case.

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Tue, 11/17/2009 - 07:33
#2
smmujeeb
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Abrar ... disagree with yr statement.

I completely disagree with yr statement that, we should disreagrd the statement on presenting banks cover letter.

Pls, read article 29(b) ..... 

Moreover my question is if draft is dated after 10 days onboard date, can we reject the dox, stating late presentation.

Regards!!!!

Mujeeb :-) 

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Tue, 11/17/2009 - 08:59
#3
LC Sam
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A banks statement

Hello Smmujeb,

To answer your question, yes you may be able to reject the documents, as the date of the draft indicates that it was created after the period allowed for the presentation of documents. However, the bank may be correct in their statement.  To better understand this, let's look at the dates involved.

1- The shipment date - Thursday January 1, 2009.

2. The calculated latest date for presentation - Sunday January 11, 2009.

3. The date of the draft - Tuesday January 13, 2009.

As you can see, the last day for presentation falls on a Sunday, so it is possible that the presenting bank is normally closed on that day.  In this case, I would expect the latest presentation day to be Monday, January 12, 2009.   This is as per Article 29a of the UCP 600.  In this case, the presenting bank must make its statement that documents were received within the presentation period.

The question you have to ask next is whether the presenting bank was closed on Monday, January 12, 2009.  If the bank was to be normally closed, say for a federal holiday, then the first day for presentation would be Tuesday, January 13, 2009.  Once again, this is as per Article 29a of the UCP 600.  In this case, the presenting bank is also required to make its statement that documents were received within the presentation period.

So, given the above scenario, the presenting bank may be correct. It is possible to have the draft dated the same date that it is presented to the bank. This date could be as late as January 13, 2009 or even possibly later. 

Now that you have this, what is your best course of action.  You need to look to your internal procedures to determine the outcome, but here is what I would do.

1.  I would see if I could find out if the presenting bank was closed due to normal course of business (i.e. non-working day and holiday).  If they were closed, then I would not note the discrepancy.

2. If I could find out they were open or if I could not find out any information, I would note the discrepancy. This is the best position to protect my bank.  When noting the discrepancy, I would note the day that I think the presentation should have occurred (i.e. Sunday, January 11, 2009).  In this case the responsbility falls back to the presenting bank to argue that they were in fact closed both of those days.  If they present this arguement, I would accept the documents without any further discussion and without charges of a discrepancy fee or associated telecommunication fees.

The reason that I would not take the presenting banks statement without question is that banks do on occasion make mistakes.  Since you have documentation that is contrary to what would normally be the case, then it is best to ensure that your position is protected.

I know this seems like a lot of work, but it is the best course of action for our bank.  Your bank could of course just rely on the presenting banks statement and accept the documents, and while you may be correct under the terms of the UCP 600,  you may open up the bank to potential liability which is easily resolved.

I hope this helps out.

Best regards,

LC Sam

 

 

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Tue, 11/17/2009 - 10:49
#4
Abrar
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Late presentation

In answer to Smujeeb's reply: But this was the point I was making. The only instance where a bank is permitted to make such a declaration is where the documents are presented within the stipulated period, or on expiry date, but this date happens to be a non-banking day.

Let's suppose the documents were presented on the 10th. The presentation period has been complied with, but the draft is dated later than the presentation period, so under Art 14 i, the presentation is discrepant.

Let's suppose the documents were presented between the 13th and the 15th. The presentation is discrepant as presentation has been made after the 10 days from B/L date.

You can choose to regard the statement on the bank's schedule, but in the first case, the documents would still be discrepant, and in the second case, the assertion cannot be true. For either case, the presentation would be discrepant, with or without the statement.

Whilst I maintain that under the above 2 scenarios the presentation would be discrepant, I nevertheless concede that under the specific illustration provided by LC SAM, the presenting bank's statement would be relevant.

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