Dear all,
We would like to have your opinion on collection D/P xxx days after shipment date
- As per Article 7c, URC522: "If a collection contains a bill of exchange payable at a future date and the collection instruction indicates that commercial documents are to be released against payment, documents will be released only against such payment and the collecting bank will not be responsible for any consequences arising out of any delay in the delivery of documents".
1.Can presenting bank release docs to the drawee against their deposit/mortgage and make payment on the maturity date
2.In case the drawee only accept to take docs against payment at the date after maturity date, how can the presenting handle this case
3.Can you clarify the differences between D/P and D/P xxx days after shipment date?
D/P xxx days
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PhanThanhNhan
- Posts: 102
- Joined: Fri Apr 05, 2019 5:23 pm
D/P xxx days
A D/P collection that includes unaccepted bills payable on a future date is an unscrupulous attempt to make the presenting bank take the payment risk on their customer, the drawee.
The answers to your question are:
1. No, not under URC522.
2. Either tell the remitting bank and seek further instructions or contravene the collection instructions and take the payment risk on the drawee (e.g. in the manner you suggest in your question 1).
3. I am not sure I understand your question. However, in case it helps, one has ‘proper’ D/P collections where payment is due immediately and one has ‘improper’ D/P collections (in contravention of sub-Art. 7(a)) where payment is due on a future date but the documents may only be released against payment.
The answers to your question are:
1. No, not under URC522.
2. Either tell the remitting bank and seek further instructions or contravene the collection instructions and take the payment risk on the drawee (e.g. in the manner you suggest in your question 1).
3. I am not sure I understand your question. However, in case it helps, one has ‘proper’ D/P collections where payment is due immediately and one has ‘improper’ D/P collections (in contravention of sub-Art. 7(a)) where payment is due on a future date but the documents may only be released against payment.
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HOANGTHIANHTHU_invalid
- Posts: 189
- Joined: Fri Apr 05, 2019 5:15 pm
D/P xxx days
Hi,
1. According to ICC Guide to Collection Operations for ICC URC 522 by (Lakshman Y. Wickremeratne) the collecting bank should obtain the acceptance of the tenor bill and should retain the bill of exchange and commercial documents, including transport documents, until the drawee pays the bill at maturity. The collecting bank has no authority to surrender the documents except upon payment.
2. I agree with Jeremy. Ask for further instructions from the remitting bank.
3. It’s not clear enough but Lakshman Y. Wickremeratne says: “Such payment and delivery terms may be necessary as a result of exchange control requirements in the exporter’s country”.
Regret that I do not have time to quote in full what Lakshman Y. Wickremeratne explains about D/P collections with drafts drawn payable at a future date.
Regards,
N.H.Duc
1. According to ICC Guide to Collection Operations for ICC URC 522 by (Lakshman Y. Wickremeratne) the collecting bank should obtain the acceptance of the tenor bill and should retain the bill of exchange and commercial documents, including transport documents, until the drawee pays the bill at maturity. The collecting bank has no authority to surrender the documents except upon payment.
2. I agree with Jeremy. Ask for further instructions from the remitting bank.
3. It’s not clear enough but Lakshman Y. Wickremeratne says: “Such payment and delivery terms may be necessary as a result of exchange control requirements in the exporter’s country”.
Regret that I do not have time to quote in full what Lakshman Y. Wickremeratne explains about D/P collections with drafts drawn payable at a future date.
Regards,
N.H.Duc