The common sense of 3W for presentation of L / C should not be unknown

The common sense of "3W" for presentation of L / C should not be unknown

After the L / C documents are made, many people don't know where the documents will be handed over. kapoklog Logistics  reminds you that in the case of bypassing the confirming bank for presentation, if the issuing bank is closed or unreasonably refuses to pay, as long as it is still within the period of presentation and the validity of the letter of credit, you can still hand over the documents to the confirming bank and ask the confirming bank to commit.

To whom (who)

After the L / C documents are made, many people don't know where the documents will be handed over. Generally speaking, we have to hand over the documents to the designated bank of the issuing bank. For example, 41a or 41D available its bank of China, Shanghai branch by negotiation, then the designated bank is Bank of China, Shanghai Branch. If there is a nominated bank in the letter of credit, it is recommended that you hand over documents to the nominated bank in accordance with the instructions of the issuing bank.

If the issuing bank does not specify a specific presentation bank, we can directly present the documents to the issuing bank or our own correspondent bank. When presenting the documents, we should register and sign for the handover link for future inspection. We must keep a copy of all documents submitted for future reference.

The following are some common ways of presentation for your reference:

1. Direct presentation of documents to the issuing bank

Before the documents arrive at the issuing bank, the risk of loss of the L / C documents shall be borne by the beneficiary. Moreover, there is no other bank to pre-examine the documents directly, so the probability of discrepancies is high. This method of presentation is not recommended unless necessary.

2. Presentation of documents to the designated bank

When the beneficiary presents documents to the designated bank specified in the letter of credit, the conforming documents enter the designated bank, which constitutes the payment responsibility of the issuing bank. As long as the designated bank operates in strict accordance with the method and route of sending documents specified in the letter of credit, the risk of delay or loss of documents in the process of mailing shall be borne by the issuing bank. Even if the documents are lost, the beneficiary still has the right to claim the payment, and the issuing bank still has to pay.

3. Presentation of documents to the confirming bank

In the case that the confirming bank adds confirmation to the letter of credit as stipulated by the issuing bank, if the beneficiary chooses to present documents to the confirming bank for compensation, it needs to comply with the instructions of the confirming bank. If the beneficiary chooses to bypass the confirming bank and present documents directly to the issuing bank, it is necessary to implement the issuing bank's instructions for sending documents.

If there are discrepancies in the documents sent directly to the confirming bank, the confirming bank will generally refuse to pay in advance, and at this time, the confirming bank's confirmation responsibility will become invalid. Therefore, it is particularly necessary to ensure the consistency of documents when presenting documents directly to the confirming bank.

In the case of bypassing the confirming bank to present documents, if the issuing bank collapses or unreasonably refuses to pay, as long as it is still within the period of presentation and the validity of the letter of credit, it can still present the documents to the confirming bank and require the confirming bank to commit.

4. Presentation of documents to the correspondent bank

When it is inconvenient for the beneficiary to present documents to the designated bank of the letter of credit, the beneficiary can choose to present documents to its own correspondent bank to facilitate communication and financing. Since the delivery bank at this time is not the designated bank of the letter of credit, the beneficiary needs to bear the risk of loss before the document enters the designated bank or the issuing bank. If the presentation bank presents documents to its designated bank in accordance with the instructions of the letter of credit, the beneficiary will have to pay an extra bank fee.

The above four ways of presentation are the most common. Generally, we will choose the second or fourth way of presentation, because these two ways of presentation are more convenient and safe for our exporters.

When to deliver the documents (when)

1. Determination of delivery time

Under normal circumstances, the L / C will stipulate the period of presentation within 7 days, 10 days or 15 days after the date of the bill of lading, and some L / CS stipulate that the period of presentation is less than 5 days. The beneficiary should pay special attention to the time of presentation when receiving the L / C.

If the letter of credit does not specify the time of presentation, the period of presentation is within 21 days after the date of the bill of lading. Between the expiry date of the letter of credit and the latest date of presentation, the earlier date is selected as the period of presentation, that is, the date of presentation cannot be later than the validity of the letter of credit.

2. Grace of presentation period

When the latest delivery date is not the working day of the designated bank, the delivery can be postponed to the first day of the designated bank. The designated bank shall indicate this fact in the single-sided letter.

For example, the date of bill of lading is September 29, 2013, and the L / C stipulates that the period of presentation is 5 days after the date of bill of lading. The date of presentation is calculated to be before October 4, which happens to be China's National Day holiday. The latest date of presentation is postponed to the working day after the National Day holiday, when the bank is open for business on the first day.

3. Completion of document presentation

Many exporters believe that the presentation of documents can be completed as long as the documents are delivered to the bank, or only when the documents are sent to the issuing bank. This understanding is not quite right. Only when the payment responsibility of the issuing bank can be completed can the document be presented. Simply presenting documents to a bank that is not a designated bank cannot be regarded as the completion of the presentation. The non designated bank must deliver the documents to the designated bank within the presentation period and validity period before the completion of the presentation.

When discrepancies are found after the documents are submitted to the designated bank or the issuing bank, the beneficiary's modification of the documents and the submission of the correct documents need to be completed within the presentation period. Otherwise, even if all document discrepancies are modified, new discrepancies will be formed after the presentation period.

Where to pay documents (where)

The letter of credit will specify the period of validity and the place of expiration, but generally it will not specify the specific place of presentation. According to Article 6 of UCP600, the place where the issuing bank is located in the letter of credit is the place where the documents should be submitted.

In addition, because the expiry place of the letter of credit is very important to the beneficiary, it is necessary that the expiry place of the letter of credit is at the beneficiary's location, and it is stipulated that the letter of credit can be redeemed at the designated bank at the beneficiary's location.