early presentation
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YAATULOLAIA
- Posts: 5
- Joined: Fri Apr 05, 2019 5:30 pm
early presentation
You as issuing Bank have to decide. As you mentioned that documents were presented earlier and you have advice discrepancy to Negotiating Bank, then you have to approach the applicant whether they accept dthis discrepancy or not and if they accept it then you may consider to pay negoatiating bank.
early presentation
Could I know why documents must not be presented earlier than 10 days after B/L date?
Regards
Daniel
Regards
Daniel
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ThuHoangAnh_
- Posts: 58
- Joined: Fri Apr 05, 2019 5:28 pm
early presentation
Dear Daniel,
It may take one month or longer to ship the goods, for example, from Long Beach (USA) to Da Nang Port (Vietnam) or vice versus. Hence, if the documents are presented as usual, i.e., right after shipment date, the applicant may pay at least 10 days earlier (while the goods are still somewhere on the sea). Such a provision in L/C may help the applicant delay the payment for 10 days, which means that he may save some money (interest payable due to early payment). Some importers would make full use of this bad practice, especially when the shipment is of high value.
I think that is the reason why sometimes the documents are required to be presented not earlier than 10 days after B/L date.
Best regards,
N.H.Duc
[edited 2/20/2009 3:15:07 AM]
It may take one month or longer to ship the goods, for example, from Long Beach (USA) to Da Nang Port (Vietnam) or vice versus. Hence, if the documents are presented as usual, i.e., right after shipment date, the applicant may pay at least 10 days earlier (while the goods are still somewhere on the sea). Such a provision in L/C may help the applicant delay the payment for 10 days, which means that he may save some money (interest payable due to early payment). Some importers would make full use of this bad practice, especially when the shipment is of high value.
I think that is the reason why sometimes the documents are required to be presented not earlier than 10 days after B/L date.
Best regards,
N.H.Duc
[edited 2/20/2009 3:15:07 AM]
early presentation
Dear N.H. Duc,
I thought so but in that case, it would be easier to arrange a deferred payment
Regards
Daniel
I thought so but in that case, it would be easier to arrange a deferred payment
Regards
Daniel
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ThuHoangAnh_
- Posts: 58
- Joined: Fri Apr 05, 2019 5:28 pm
early presentation
Dear Daniel,
It’s true that arranging a deferred payment or an acceptance L/C is more convenient. I have seen U.S importers who import goods from Asian countries having their LC available at 30 or 45 days sight.
Still, it is not always easy for importers in some countries which are enforcing the policy of foreign debt restrictions to open such a type of L/C. Imports to be paid by deferred payment L/Cs are regarded as one of the forms of foreign borrowings. Therefore, importers in the said countries are not allowed to open deferred payment L/Cs or are allowed with hard-to-meet conditions or with complicated formalities.
I take my country as an example. Fifteen years ago or more my country’s government ever imposed the same policy on deferred payment L/Cs. That is to say, the importer who wanted to open deferred payment L/C had to pledge deposit of 70% of L/C amount to secure the payment right at the time applying for opening L/C. The government did not prohibit importers to open deferred payment L/Cs but it was obvious that wise importers would never open L/Cs with such a condition.
What described above perhaps is strange in your country or at least to you, isn’t it?
The case in the query may have nothing to do with the same situation as described above. The reason may lie in the selling policy of the exporter or in the fact that the exporter, for some reason, feels unsafe with deferred payment L/C. Moreover, you may agree with me that 10 days is much shorter than 30 days sight or after B/L date which is the shortest tenor possibly used in deferred payment or acceptance L/Cs.
Best regards,
N.H.Duc
[edited 2/23/2009 12:30:40 AM]
It’s true that arranging a deferred payment or an acceptance L/C is more convenient. I have seen U.S importers who import goods from Asian countries having their LC available at 30 or 45 days sight.
Still, it is not always easy for importers in some countries which are enforcing the policy of foreign debt restrictions to open such a type of L/C. Imports to be paid by deferred payment L/Cs are regarded as one of the forms of foreign borrowings. Therefore, importers in the said countries are not allowed to open deferred payment L/Cs or are allowed with hard-to-meet conditions or with complicated formalities.
I take my country as an example. Fifteen years ago or more my country’s government ever imposed the same policy on deferred payment L/Cs. That is to say, the importer who wanted to open deferred payment L/C had to pledge deposit of 70% of L/C amount to secure the payment right at the time applying for opening L/C. The government did not prohibit importers to open deferred payment L/Cs but it was obvious that wise importers would never open L/Cs with such a condition.
What described above perhaps is strange in your country or at least to you, isn’t it?
The case in the query may have nothing to do with the same situation as described above. The reason may lie in the selling policy of the exporter or in the fact that the exporter, for some reason, feels unsafe with deferred payment L/C. Moreover, you may agree with me that 10 days is much shorter than 30 days sight or after B/L date which is the shortest tenor possibly used in deferred payment or acceptance L/Cs.
Best regards,
N.H.Duc
[edited 2/23/2009 12:30:40 AM]
early presentation
N.H. Duc,
Thank you for all the information.
A last thing: why would 30 days the shortest possible time period for acceptance or deferred payment?
Best regards
Daniel
Thank you for all the information.
A last thing: why would 30 days the shortest possible time period for acceptance or deferred payment?
Best regards
Daniel
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ThuHoangAnh_
- Posts: 58
- Joined: Fri Apr 05, 2019 5:28 pm
early presentation
Daniel,
Theoretically, a time draft may be drawn at any tenor. However, you may agree with me under L/C transaction a draft at 10 or 15 days after B/L date is almost meaningless.
Frank speaking, during my 18 years working with L/C, I have not yet come across a deferred payment or acceptance L/C which has tenor less than 30 days. That’s the reason why I say “… 30 days sight or after B/L date which is the shortest tenor possibly used in deferred payment or acceptance L/Cs”.
Best regards,
Nguyen Huu Duc
Theoretically, a time draft may be drawn at any tenor. However, you may agree with me under L/C transaction a draft at 10 or 15 days after B/L date is almost meaningless.
Frank speaking, during my 18 years working with L/C, I have not yet come across a deferred payment or acceptance L/C which has tenor less than 30 days. That’s the reason why I say “… 30 days sight or after B/L date which is the shortest tenor possibly used in deferred payment or acceptance L/Cs”.
Best regards,
Nguyen Huu Duc
early presentation
Dear N.H. Duc,
Meaningless? Maybe not anymore, it seems.
Regards
Daniel
Meaningless? Maybe not anymore, it seems.
Regards
Daniel
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THI THUY MYT_
- Posts: 49
- Joined: Fri Apr 05, 2019 5:15 pm
early presentation
Hi Mr Duc,
As yr reply, I can understand if issuing bank will have maximum five working days from date which considered as new date of presentation?(pls be confirmed that new date of presentation is date which set of docs is consider as complying docs) or we must effect payment immediately on that new date of presentation.
.
In case we must effect payment, can we deduct disc fee?
.
Tks much
As yr reply, I can understand if issuing bank will have maximum five working days from date which considered as new date of presentation?(pls be confirmed that new date of presentation is date which set of docs is consider as complying docs) or we must effect payment immediately on that new date of presentation.
.
In case we must effect payment, can we deduct disc fee?
.
Tks much
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ThuHoangAnh_
- Posts: 58
- Joined: Fri Apr 05, 2019 5:28 pm
early presentation
Hi,
As said in my previous post, a fair bank should not make full use of five banking days to delay the payment once the compliance is determined earlier. If the documents are determined to be complying on the new presentation day, the payment is expected to be made in next one or two banking days (representing the time for payment processing, e.g. buying foreign currency).
I do not think the presenter will object if the discrepancy fee is deducted from the proceeds.
Best regards,
N.H.Duc
As said in my previous post, a fair bank should not make full use of five banking days to delay the payment once the compliance is determined earlier. If the documents are determined to be complying on the new presentation day, the payment is expected to be made in next one or two banking days (representing the time for payment processing, e.g. buying foreign currency).
I do not think the presenter will object if the discrepancy fee is deducted from the proceeds.
Best regards,
N.H.Duc