We all know as per UCP 600, banks have a maximum of five banking days following the day of presentation to determine if a presentation is complying.
My question is what is the maximum time period to determine by banks if presentation is complying, under LCs subject to ISP98.
Shahed
Examination of Documents under LC subject to ISP98
Examination of Documents under LC subject to ISP98
Shahed,
7 days
according to ISP 5.01 a if I get it right. According to the official commentary:"Safe Harbor within three banking days".
Daniel
7 days
according to ISP 5.01 a if I get it right. According to the official commentary:"Safe Harbor within three banking days".
Daniel
Examination of Documents under LC subject to ISP98
ISP looks at it from the perspective of refusal rather than compliance.
The relevant piece from Rule 5.01 is copied below:
"a. Notice of dishonour must be given within a time after presentation of documents which is not unreasonable.
i. Notice given within three business days is deemed to be not unreasonable and beyond seven business days is deemed to be unreasonable.
ii. Whether the time within which notice is given is unreasonable does not depend upon an imminent deadline for presentation.
iii. The time for calculating when notice of dishonour must be given begins on the business day following the business day of presentation.
iv. Unless a standby otherwise expressly states a shortened time within which notice of dishonour must be given, the issuer has no obligation to accelerate its examination of a presentation."
The relevant piece from Rule 5.01 is copied below:
"a. Notice of dishonour must be given within a time after presentation of documents which is not unreasonable.
i. Notice given within three business days is deemed to be not unreasonable and beyond seven business days is deemed to be unreasonable.
ii. Whether the time within which notice is given is unreasonable does not depend upon an imminent deadline for presentation.
iii. The time for calculating when notice of dishonour must be given begins on the business day following the business day of presentation.
iv. Unless a standby otherwise expressly states a shortened time within which notice of dishonour must be given, the issuer has no obligation to accelerate its examination of a presentation."
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GlennRansier_
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Examination of Documents under LC subject to ISP98
To paraphrase ISP, 3 banking days from receipt of the presentation is considered a safe harbor. If needed, a bank can take up to 7 banking days however, any refusal past 3 days and not past the 7th day can be challenged and may need to be justified.