Dear all
I want to know about maturity of at sight(not at xxx days sight)
In case of clean docs, we regard end of 5th banking day following the day of presentation as the maturity of sight payment. Therefore we claim the delay charge to issuing bank in case of clean docs. But yesterday IB refuses the delay charge owing to below reason
Sub-article 14,b states that the issuing bank has a maximum of five banking days following the day of presentation to determine if a presentation is complying.
Sub-article 16,c states when issuing bank decides to refuse to honour, it must give a single notice to that effect, and sub-article 16,d states such notice must be given no later than the close of the fifth banking day following the date of presentation.
If the issuing bank fails to act in accordance with the provisions, it shall be precluded from claiming that the documents do not constitute a complying presentation.
UCP 600 provides the above guidelines for the time limit that an issuing bank must act if it decides to refuse to honour. UCP 600 does not provide the same guidelines for the time limit that an issuing bank must honour against complying presentation.
Sub-article 15,a states when an issuing bank determines that a presentation is complying, it must honour.
After the issuing bank gives clean notice or no notice to negotiation bank within 5 working days, if the issuing bank would pay for payment after 7 days , after 15 days, or after 1 month,
Is this practice really right? who should pay for the delay interest in this case?
Is this for beneficiary? or for negotiation bank?
I'd like to know about your advice.
Best regards
[edited 10/19/2007 8:55:27 AM]
When is the maturity date of at sight?
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SOOEYOUNKIM
- Posts: 23
- Joined: Fri Apr 05, 2019 5:14 pm
When is the maturity date of at sight?
My personal opinion is that -unless the credit provides otherwise- where a credit is payable ‘at sight’ settlement must be effected by an issuing or confirming bank (I/CB) once it has been determined the documents are compliant, even if this is the (banking) day of presentation, as this what ‘at sight’ means. Although it ought not to be necessary, sub-Art. 15(a) would also seem to affirm this.
Of course, the I/CB must be allowed a reasonable time to make payment (and to apply a reasonable value date -no later than ‘spot’- to that payment where a ‘foreign’ currency is involved) once it has determined documents are compliant, but I cannot see that much more than an additional banking day would normally be necessary for payment to be made, given what a simple process it generally is. I certainly see no grounds for arguing that because 600 allows a bank 5 banking days to establish compliance etc that an I/CB is entitled to wait 5 banking days before making payment if it has established compliance significantly earlier.
Overall, I would expect that an I/CB would normally be liable to pay interest where it had taken more than two banking days from the date it established the documents were in order to make payment.
[edited 10/19/2007 1:53:34 PM]
Of course, the I/CB must be allowed a reasonable time to make payment (and to apply a reasonable value date -no later than ‘spot’- to that payment where a ‘foreign’ currency is involved) once it has determined documents are compliant, but I cannot see that much more than an additional banking day would normally be necessary for payment to be made, given what a simple process it generally is. I certainly see no grounds for arguing that because 600 allows a bank 5 banking days to establish compliance etc that an I/CB is entitled to wait 5 banking days before making payment if it has established compliance significantly earlier.
Overall, I would expect that an I/CB would normally be liable to pay interest where it had taken more than two banking days from the date it established the documents were in order to make payment.
[edited 10/19/2007 1:53:34 PM]
When is the maturity date of at sight?
My opinion is I/CB can take the time maximum upto 5 banking days (checking period) plus 2 days (spot value) to pay the fund if the document is clean.
Shahed
Toronto
Shahed
Toronto