I need your comments about the extension of expiry date of the L/C after the L/C has already expired.
Although UCP is silent regarding this specific issue, I also bear in
mind that sub-article 10-b of UCP 600 emphasizes that an issuing bank is irrevocably bound by an amendment as of the time it issues the amendment.
Therefore I consider that the extension of expiry date of the L/C after the L/C has already expired is in line with UCP and international
standard banking practice.
However, for the avoidance of doubt, I am looking forward to your comments for this specific issue.
Zeynep Ersamut
extension of validity after the credit has expired
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GlennRansier_
- Posts: 132
- Joined: Fri Apr 05, 2019 5:19 pm
extension of validity after the credit has expired
iT IS NOT UNCOMMON TO EXTEND AN EXPIRY AFTER A LC HAD EXPIRED. WHILE PRACTICE GENERALLY ALLOWS IT SOME CONFIRMERS/BENEFICIARIES MAY REFUSE IT IF IT IS REACTIVATED WELL PAST THE EXPIRY DATE.
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JudithAutié
- Posts: 195
- Joined: Fri Apr 05, 2019 5:20 pm
extension of validity after the credit has expired
Hi
Although it is very common to receive an amendment extending the validity of a credit after the original expiry date, in France we have a different point of view.
Once a credit expires it no longer has a legal existence. Consequently the only possibility is to reissue the credit (albeit with the same references and terms).
This is important particularly if the credit had any sort of "security" such as a deposit or lien on the goods. In such cases, the formalities for securing the deposit or lien must be recreated. If this is not done our courts have decided that the applicant can claim that the "security" was no longer required when the credit was extended.
So it depends on your jurisprudence.
Judith
Although it is very common to receive an amendment extending the validity of a credit after the original expiry date, in France we have a different point of view.
Once a credit expires it no longer has a legal existence. Consequently the only possibility is to reissue the credit (albeit with the same references and terms).
This is important particularly if the credit had any sort of "security" such as a deposit or lien on the goods. In such cases, the formalities for securing the deposit or lien must be recreated. If this is not done our courts have decided that the applicant can claim that the "security" was no longer required when the credit was extended.
So it depends on your jurisprudence.
Judith