Please I have a question. Is about triangular business, and for LC. Let's say that A reseeves purchase order by B, who is willing to pay by LC. A pass the purchase order to C, supplier of goods.
Does A, has also to issue a LC for C? As A will get paid by B's, LC. How A pays the C, supplier? Thank you in advance. However, for this to happen it is necessary that the LC is valid for submission of completion certificate.
In case the LC is not valid till the 90th day , we will have to wait for receipt of balance payment till the end of 90 days from shipment date even if the completion certificate is issued earlier than this date. Or the payment will be done after four shipment? Thanks and regards Ali Surendran Kollerath: On 10 March Hi Ali, Based on terms and conditions agreed mutually, seller is paid amount of export sales. The terms of payment agreed mutually is reflected on LC. Will this possible.
This parrot is no more! He has ceased to be! I bet, that you ask yourself why I talk of dead parrots on lcviews. Well - it is surely not because I am stuck with an LC covering " pcs of dead parrots for retired sailors". No - the reason is that I want to raise the issue of "documents presented under an LC that has expired".
They told us in an email to just go ahead and ship the goods and they will advise their bank to waive the discrepancies. I am confused and I am having a difficult time explaining what this means to my boss who has told me to just ship the stuff; he said it's the buyer's problem once it leaves our dock. Whether you are new with letters of credit or have years of experience, they are a headache.
Here is a key phrase to pass on to your boss: A letter of credit does guarantee payment! An unconfirmed letter of credit is a promise by the buyer's bank in India to pay your firm upon the successful error-free completion and presentation of the documents by a specific date stated in the letter of credit.
If a date is not stated, Article 14 states you have 21 days from the bill of lading date to present your documents. Article 14 is found in a set of rules adopted by the bank and published the by International Chamber of Commerce. Among the documents that must be presented is an international bill of lading showing that the goods were shipped according to the date specified in the letter of credit. Shipping after the date specified in the letter of credit is considered an error or, as a banker will tell you, "A late shipment is a discrepancy.
Your firm is at risk for non-payment if the buyer's forwarder ships the goods on the vessel after the latest shipment date. The Indian bank that issued the letter of credit might not pay you due to the discrepancy. It is also part of the information that we share to our content providers "Contributors" who contribute Content for free for your use.
Learn More Accept. Finance and Banking. Australia: When a letter of credit expires. Your LinkedIn Connections with the authors. To print this article, all you need is to be registered or login on Mondaq.
While the case did not present any significant issue of legal principle, it demonstrated that: Very careful consideration must be given, at a practical level, to the expiry date accepted by the beneficiary of a letter of credit; Strict compliance with the terms of the letter of credit instrument is required to invoke the issuing bank's commitment to make payment under the letter of credit; and Construction of the letter of credit instrument is paramount. The Facts Briefly, 3 letters of credit were provided in accordance with a sale agreement on behalf of the purchaser to secure payment to the vendor of the final instalment of purchase price due by the purchaser on 1 March The issue of construction arose for 3 particular reasons: The scheduled date for payment of the last instalment of purchase price was agreed to be either Saturday, 28 February or Sunday, 1 March , neither of which was a business day; The letters of credit were expressed to expire on Sunday, 1 March ; Monday, 2 March was a public holiday in Western Australia which was the jurisdiction the parties had submitted to in the sale agreement.
Initial Judgement The vendor initially commenced proceedings in the Supreme Court to seek a declaration that presentation of the letters of credit could be made by 1. Justice Hammerschlag made the following findings: All types of letters of credit require the beneficiary to comply strictly with the terms of the letter of credit in order to invoke the issuing Bank's commitment.
In this instance that meant compliance strictly with the requirements set out in clause 2 of each of the letters of credit. The effect of the sale agreement was to provide that the final instalment must be paid on 3 March which was the next business day in Western Australia after 28 February because of the operation of the boilerplate provision at clause 1 g in the sale agreement. The final date by which the letter of credit could be presented when taking into account the expiry date of the letters of credit and the impact of International Standby Practice ISP98 was 2 March The final instalment amount under the sale agreement only becomes due and payable on 3 March and that the vendor would not be able to provide a declaration on 2 March that such amount was due and payable.
The decision reinforces the importance of: allowing sufficient time for a beneficiary to comply strictly with the terms of a letter of credit prior to its expiry; and reconciling the obligations of a party in respect of the underlying transaction document with the mechanism for payment of the credit given in respect of those obligations.
David Murray-Nobbs. Consideration of current electronic execution laws and our recommendation for a safe execution of loan packages. Clients and advisers should review their finance facilities to ensure they are getting the best possible financing deal.
0コメント