Calculation of maturity

[cristiand969]

Appreciate your view in the following matter:

An LC was opened indicating terms of payment 120 days after shipment date.

Among the document requested and presented there are a BL and a custom export declaration.

The B/L is in form of 'received for shipment (no onboard preprinted) bears NO ONBOARD notation just an issuance date.

The customs declaration indicate date of customs formalities 2 days latter.

The remitting bank indicated maturity a fixed date (120 after issuance of transport document although I cannot establish to be correct having no on board notation).

From the two documents above it is clear that shipment could not be made prior to customs formalities.

Any suggestions how I can establish maturity in case applicant decides to waive discrepancies.

[nesarul]

Dear,
From my point of view, the issuing bank must have to contact with the another prime party i.e. beneficiary and confirming bank if any to establish the maturity date otherwise "principle of irrevocablity" will not be maintained.
Regards
nesar

[ajoy]

Hi

Dear,
From my point of view, the issuing bank must have to contact with the another prime party i.e. beneficiary and confirming bank if any to establish the maturity date otherwise "principle of irrevocablity" will not be maintained.
Regards
nesar

Do you mean to say that that if there is ambiguity in the calculation for some reason..Issuing bank should not take a unilateral decision but should make sure that the decision is taken after consulting the bene and the confirming bank. OR

simply that Issuing bank must inform the confirming bank etc of the correction immediately OR

are you saying that Issuing bank should simply accept the maturity date given by Confirming bank in such cases.

The original question remains though.. What is the maturity date in this case?

Is it 120 days from BL issuance date as advised by remitting bank or is it 120 days from custom declaration ( i.e 2 days later)?

I wouldnot want to deabate the remitting bank on a difference of 2 days, in practice.
On the other hand logically custom export decalration seems to suggest that the actual onboarding would have taken place at least 2 days later. So what is correct answer technically speaking?

Cheers

[kirti]

HI,

just a suggestion...not sure how it will work with the banks:

"An LC was opened indicating terms of payment 120 days after shipment date. "

Since the Bl is Received for Shipment I/O customs declaration, etc......why not ask the shipping company to issue a letter stating
"Cntr. Nr. .... was shipped on board vessel...... dated...."
The same declaration can be attached with other documents
This should be good enough for banks to calculate maturity at 120 days from shipment date

[cristiand969]

Dear kirty,
At the time of opening LC I have requested a marine Bill of lading so our expectation was that consistent function of document and with payment details on onboard date should have been evidenced.
.
However issue solved by asking applicant that upon giving his waiver of discrepancies to confirm his agreement of payment at the maturity requested by remitting bank.

[ajoy]

However issue solved by asking applicant that upon giving his waiver of discrepancies to confirm his agreement of payment at the maturity requested by remitting bank

There's a saying in my part of the world ' if both the bride ( bene) and the groom (applicant) say 'I do' the priest ( IB) cant do much ...( except solemninzing the marriage)....

Well seems the priest got the applicant to say ' I do' and so the issue is resolved

Thanks for the update..

but am still curious what would be the technicaly right answer to the original question? Or maybe I dont have enough work today...

Cheers

Ajoy

[nesarul]

Dear Ajoy,
I refer to my posting on above question.
I want to emphasis that since issuing bank is unable to find the shipment date from the face of the document, It can not established any maturity date on its own disrcetion. [due to maturity date must have to calculate from the exact date]. If it does so.... I think its violate the irrevocable right of other counterpart.
from my point of view,
issuing bank must provide a message to the concerning party [i.e. confirming bank ,if any, the beneficiary and/or nominated bank] by mentioning its intend to determine the possible maturity date. after reaching an agreement at a fixed date, issuing bank can express that the bill is accepted and matured for payment as on [agreement date].
.
i hope, I am now clear with my logic and awaiting for reply.
regards
nesar
.

[ajoy]

Thanks for your patient detailed response. My response was much less clearer.

I hope my response below clarifies that I do agree with you.

This is what I would have done in this case:

A) If I were the Nominated bank I would have calculated maturity from the shipment date implied from the ‘Export Declaration’ as I feel that the intent is quite clear from the LC - the maturity is 120 days from shipment date. I accept that quite a few people may not agree and insist on taking the Issuance date of BL in the absence of an ‘on board’ date.

In either case, since the situation is unusual hopefully I would explain my decision to the IB instead of just giving the ‘maturity date’. ( I say hopefully as I am using my hindsight liberally here. )


B) If I were the IB I would do what Cristiand actually did. Get the concurrence of applicant to whatever maturity date was advised by the NB. (BTW I think that is not contradicting your views in any way.)
1) If applicant concurs then there is no need to get consent from the NB. Mere information in due course will do as NB has already agreed to the date and so has bene by implication.
2) If applicant disagrees then first try and convince the applicant that a 2 day difference is not worth spending so much time on. If they still disagree then take it up with NB and sort it out.

I think the above confirms that I do agree with you. IB is always obliged to inform / confirm the maturity date to NB.

Cheers
Ajoy