ETD

[KimChristensen]

Hi there,

Short one (the question anyway):

A documentary credit mentions the following description of goods:

100 PCS OF MONITORS PER TRUCK ETD 05.10.2005

How would your “interpret” the ETD part?

I thank you in advance.

Best regards
Kim

[RolandLeupi]

Hi Kim
I've seen ETD under shipment schedule. Now in your case seems that it's part of the good description. I would therefore just request clarification to opening bank what's was their meaning

Roland

[KimChristensen]

Dear Roland,

Thanks – I appreciate your answer more that I think you know

I did in fact ask the issuing bank. They informed me that they meant “Estimate Time of Departure” (Thanks! – so much I had guessed) – and that it indicated the shipping schedule subject to article 46,c – i.e. plus/minus 5 days.

Any comments?

Best regards
Kim

[RolandLeupi]

Dear Kim,
So first of all the ETD indiction is at the wrong place ; should not appear together with the goods description.ETD-ETA are generally used in oil transactions which have a very short life. For the parties involved the tanker's name, the loading port and date are already known. However to avoid problems at negotiation due to an eventual delay in loading (bad wheter conditions, small repairs of the vesse, a.s.o.) L/C foreseen clause like "loading in Ventspils-October 18-23, 2005 or ETD Ventspils October 20, 2005 for ex. This way of doing make sense in those transaction which have a special structure due to the particularity of the commodity involved.
In your case, the goods refers to "monitors per truck" (I hoe technical parts, not uman people). A latest date of shipment would have been more appropriate. It would also avoid any problem for the date of presentation of the documents if there is a transport document requested.
Roland

[KimChristensen]

Hi Roland,

Thanks a lot!

For the sake of good order – there is no latest date of shipment stated in the L/C – and a transport document (CMR) is required.

In that respect, I am not sure that I understand your last sentence regarding the avoidance of problems if a transport document is requested? The way I see it, it must be the other way around: If no transport document is requested, then there is no problem

In any case – I find it rather confusing to use a term like ETD in the credit (wherever stated). To me this is a transport term with no fixed interpretation in L/C transactions. The way I have seen it used is in the shipping lines published sailing schedules (but I thank for your experience, it will be stored in my file of “grain of gold”). These works like a bus timetable: it indicates when the liner vessels/busses are due to arrive and leave certain ports/bus stops. I guess that no +/- 5 days rule apply here
So in order to effectively “activate” article 46,c I would suggest to either use the same term (on or about) – or simply state that shipment should take place no sooner than date XX but no later than date YY.

And by the way: do bankers in general know what ETD means?

Best regards
Kim

[NigelHolt]

Kim,

My understanding is that the ‘goods description’ is -of itself- not a ‘term’ or’ condition’ of the credit. Therefore, I consider that there are no grounds for saying that Article 46 -that deals with ‘General expressions as to Dates for Shipment’- has any relevance. In addition, I cannot see that simply stating the ‘estimated time of departure’ elsewhere in the credit could be considered a ‘term’ or’ condition’ of the credit as an ‘estimate’ is just that- an ‘estimate’. As a result I do not believe that there is any case for saying that the goods must be shipped within any particular time frame. Therefore, provided that the goods are shipped on or before the LSD mentioned in the credit, or if no LSD is mentioned, the expiry date of the credit, there cannot possibly be any discrepancy in relation to the ‘estimated time of departure’. (The documents certainly could NOT be refused on grounds of ‘inconsistency’.)

My conclusion is that the issuing bank does not have a clue as to what it is doing.

Regards, Jeremy

[edited 10/14/2005 9:33:14 AM: A vital 'NOT' missing.]

[AbdulkaderBazara]

I do agree with the group that ETD was indicated in the wrong place and has no exact and measurable timeframe. To avoid any confusion, future misinterpretation or claims, the issuing bank must provide a precise period for dispatch of the goods and delete the expression from the description of goods.