Presenation period

[kirti]

Hi, Frendz

I wanna know what UCP says on the below:
We have asked customer to open LC with presentation time of 32 days,, considering we have to Switch the Original BL and sanitize other documents
However, customer says all their LC"s as per company procedure have presentation of 15 days only
We are asking him to consider 21 days as we need time at our end for needful doing of the documents
My question:
- Does UCP have min. presentation period??
-Can the customer decide how many days for presentation to be given??

I feel, Beneficiary should be able to have some say in the above, cause he will arrange the shipment and he is aware how much time he needs for presentation

what say guys?

[joejoseph]

Hi

UCP Article 14 C states
A presentation including one or more original transport documents subject to articles 19, 20, 21, 22, 23, 24 or 25 must be made by or on behalf of the beneficiary not later than 21 calendar days after the date of shipment as described in these rules, but in any event not later than the expiry date of the credit.

[shahriar]

perfect quote. just to add with the given answer, the issuing bank can modify any clause. so it can set the presentation time to 15 days.

[ajoy]

Hi Kirti,

You ask :

1) Does UCP have min. presentation period??
2) Can the customer decide how many days for presentation to be given??

I feel, Beneficiary should be able to have some say in the above, cause he will arrange the shipment and he is aware how much time he needs for presentation

My two bits :
The article quoted does imply that presentation period should not exceed 21 days after shipment i.e their seeems to be a maximum but no minimum presentation period.
Also, the presentation period cannot go beyond the expiry date of the LC ( as the Lc will cease to exist and hence....)

2) Yes if you let them. Both the buyer ( your customer, applicant of LC) and Seller ( bene of LC, yourself) should have a say. Everything in your contract is negotiable.

Lastly , a question of my own:

If the applicant agrees that a presentation period of 32 days is justified and wants that in the LC. Why wold the Issuing bank have a problem with that?

My take on this question is :

The purpose of limiting the presentation period to 21 days is to ensure that the documents reach the applicant /buyer in time before the ship arrives. It is considered a reasonable time for bene too. However, if in a particular case the buyer and seller agree that a presentation period of 32 days will not create any undue risk for applicant then Issuing bank should have no problem with this either.
(So I think this is very much doable)

Comments welcome

Cheers

[shahriar]

If the applicant agrees that a presentation period of 32 days is justified and wants that in the LC. Why wold the Issuing bank have a problem with that?

dear ajoy,

i dont think that the issuing bank has any problem with that. but i really wonder why would beneficiary need so much time. after all all beneficiary wants to have payment as soon as possible. is nt bit unusual?

[picant]

Hi Pals,

Period of presentation can vary from country to country, some time due to legal terms. I remember that in Indonesia it was 28 days, now I dont know.
Certainly a beneficiary can present it immediately to get money, but may be he need more time to get the bill of lading and other documents.

That's all-Other comments appreciated

Ciao

[Shirley]

- Does UCP have min. presentation period??
UCP do not min.the presentation period but only not later than the expiry date.

-Can the customer decide how many days for presentation to be given??
I saw a L/C showing the presentation period was 52 days. If applicant and beneficiary agree the presentation period, the presentation period does not restrict 21 days. Of course, it also need to base on the issuing bank's policy.

This is only my comment, if any mistake or problem, please let me know.

[joejoseph]

Hi pals
Just to add..

the presentation time can be 32 days. But the presentation required should not include any " one or more original transport documents subject to articles 19, 20, 21, 22, 23, 24 or 25 "

So

If no ORIGINAL transport docs subject to articles 19, 20, 21, 22, 23, 24 or 25 are required under LC terms then period of presentation is "WITHIN VALIDITY OF THE CREDIT"
Feel otherwise the 21 days rule is applicable.
Comments appreciated

[Judith]

Just to add..

the presentation time can be 32 days. But the presentation required should not include any " one or more original transport documents subject to articles 19, 20, 21, 22, 23, 24 or 25 "

I don't quite agree with this...

The concept of 'presentation period' is included in the credit whenever the applicant requires documents to be presented in time which has traditionally been a period of 3 weeks (or 21 days).

However, there may be circumstances where the beneficiary may not find it possible to present documents immediately after shipment and if the applicant understands that and does not require an early presentation, I don't see why the LC cannot include 32 days AND also call for an original transport document...

After all, the idea of the LC is to facilitate trade and the idea of UCP is to facilitate the LC!
If the LC states 32 days, the LC will supercede the UCP requirement of 21 days.

[ajoy]

Exactly the point I was trying to make in my post.

21 days presentation period ..... is specified in the LC.

However, an LC can be issued for a presentation period exceeding 21 days while calling for an original transport document.

This is the reason I donot like the rephrased wording in article 14 C in UCP 600. The corresponding article in UCP 500 is clear and is not open to the confusing interpretation of a maximum limit of 21 days for presentation period.

Cheers

[kirti]

Hi, Frendz

thanks for your comments
we ultimately settled for 15 days
i feel the presentation time should be decided considering the transit time of shipment and doc processing at bene's end
in some cases where there is a third party involved and transit times are shorter than 15 days a bigger window helps in controlling costs arising out of late presentations, etc.

thanks again guys for your inputs

[cnaw]

21 calendar days only applies when LC under f48a is silent and original transport doc as per art 19 to 25 is presented and within lc expiry date.

[ldt5205]

FOR FURTHUR REFERENCE
BELOW IS THE CONCLUSION OF TA582：
The establishment of what is a transport document, and therefore identification therefrom of the date of shipment, is clearly linked in the UCP to an original transport document being presented. Reference to an invoice number that is different from that presented by the beneficiary would be inconsistent and discrepant If a credit requires the presentation of a copy of a bill of lading (stated as being copy or non-negotiable copy), and the intention is that the documents be presented within a specific period after a date which may appear within that document, the credit must expressly request such action. For example, documents must be presented within XX days after the date of shipment as evidenced on the copy (non-negotiable copy) of the [ name of transport document ].

[21vita]

Hi, Frendz

I- Does UCP have min. presentation period??
-Can the customer decide how many days for presentation to be given??

1-UCP have no stipulation as to min presentation.21 days is max period while lc 48a remain silent.
2-It is a negotiable matter between imp and exp customers.

It seems like a situation under transferable or back to back lc and you are not supplier of the good. I dont know if buyer knows the background, if possible ,JUST tell him the truth,maybe he could understand.By the way, "company procedure have presentation of 15 days only'" is really weird,how could a company have such a detailed stpulation,considering the various trading background,for example in case of long voyage for over 40 days its really not necessary to mantain a short presentation period.in my opnion, you have space for negotiation.