Dear Sir. I have found very interesting your site. Congratulations. Please I have a question. Is about triangular business, and for LC. Let's say that A reseeves purchase order by B, who is willing to pay by LC. A pass the purchase order to C, supplier of goods. Does A, has also to issue a LC for C? As A will get paid by B's, LC. How A pays the C, supplier? Thank you in advance.
A reader asked me a question about letter of credit and trade finance timelines..
With a letter of credit. What sort of timings are usually connected to when the payment between banks occurs? Does the shipment sail prior to the LC being satisfied?
The roles of the involved banks First of all it is important to understand that there are usually 2 banks involved in the LC transaction: 1) The LC is issued by the buyer’s bank. That bank is termed “ issuing bank ”. 2) The LC is advised to the seller by another bank. That bank may have different roles and responsibilities – all depending on what the bank has agreed to do i.e.: The bank may act as an Advising bank : Not obligated under the LC to pay. The bank may also act as a Nominated bank : Nominated under the LC (e.g.) to pay, but any obligation under the LC depends on the agreement made with the seller. The bank may also act as a Confirming bank : Has given an undertaking to pay when a complying presentation has been made. This means that When a complying presentation is made to the issuing bank, then it must pay (according to the terms of the LC). When a complying presentation is made to the Advising bank, it will normally not pay until funds has been received from the issuing bank. Nominated bank, its payment will depend on the agreement made with the seller. Confirming bank, it must pay when a complying presentation is made to it. How the LC is available Also important in this respect is the “availability” of the LC. In general LCs are issued either at “sight LCs” or “Usance LCs.” For the first payment is made “at sight” i.e. right after presentation of the documents. For the latter payment is made after a specified number of days (as determined by the LC) – e.g. “90 days after shipment.” The timelines given by the rules Practically every LC is governed by the UCP 600. Those rules include the following provisions: The banks (issuing, confirming, nominated) have “a maximum of 5 banking days following the day of presentation” to determine if a presentation is complying. This means that if the issuing / confirming bank has not refused the presentation within that timeline then they are obligated to pay (according to the terms of the LC). Also important is the rule that dictates what the bank must do when it determines that the presentation is complying: When the issuing bank determines that a presentation is complying it must pay (according to the terms of the LC). When a confirming bank determines that a presentation is complying, it must pay (according to the terms of the LC) and forward the documents to the issuing bank. When” is not defined in the rules, but it is practice that the issuing / confirming bank must start the payment process right after they determine that it is a complying presentation. The LC in practice The above may seem a bit abstract, so let us look at two realistic scenarios: Scenario 1: A confirmed LC On 1 October the seller received an LC from their bankers. The bank has indicated that they have confirmed the LC. The LC is available “at sight” with the confirming bank. On 15 October the seller ships the goods covered by the LC. (From that day the seller has 21 days to present the document to the bank). On 20 October the seller presents the documents to the confirming bank. (From that day the confirming bank has 5 banking days to examine the documents). On 23 October the confirming bank revert to the seller informing that the documents comply with the terms and conditions of the LC, and that they will effect payment value 26 October. On the same day the confirming bank forwards the documents to the issuing bank. On 26 October the payment is made to the seller. On 28 October the documents arrive at the issuing bank. (From that day the issuing bank has 5 banking days to examine the documents). On 2 November the issuing bank accepts the documents, pays the confirming bank, and draws the funds from the buyer. Scenario 2: An unconfirmed LC On 1 October the seller received an LC from their bankers. The bank has indicated that they have NOT confirmed the LC. The LC is available “at sight” with the issuing bank. On 15 October the seller ships the goods covered by the LC. (From that day the seller has 21 days to present the document to the issuing bank). On 20 October the seller presents the documents to the advising bank. On 23 October the advising bank revert to the seller informing that the documents comply with the terms and conditions of the LC, and that they have forwarded the documents to the issuing bank awaiting payment. On the same day the advising bank forwards the documents to the issuing bank. On 28 October the documents arrive at the issuing bank. (From that day the issuing bank has 5 banking days to examine the documents). On 2 November the issuing bank accepts the documents, pays the advising bank, and draws the funds from the buyer. On 4 November the advising bank receives the finds from the issuing bank, and pays the seller. As can be seen from the above: It is the documents from the seller (including the transport document) that trigger the payment; i.e. shipment is made before payment. When the payment is made to the seller depends highly on the structure of the LC. It should be added also, that in the two above examples the documents did comply with the terms and conditions of the LC. If that is not the case, the confirming and issuing banks may refuse the documents, and payment is only made when approved by the buyer.
For more information you can contact Kim Sindberg by email..
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What are the implications of shipping material 2 days after latest shipment date, once a confirmed LC was received from the customer?
So nice.and thanks a lot
Dear Readers, My LC stated as follows (just for some important clause) 1. At sight 2. Available with my Bank by negotiation 3. Latest shipment 15 November 4. LC expiry : 25 November in Indonesia 5. LC confirmation : Without (also my Bank no need confirmation because my bank has correspondence line with issuing bank) 6. Incoterms 2010 and UCP 600 applied.
I have shipped the cargo on 5 November, due to some of shipping documents need to legalized to Applicant’s Embassy so I just submitted the all shipping documents as per LC on 20 November. On 23 November my Bank Officer told me that my documents 100% Complying the LC, BUT his Branch Manager would not to negotiate my LC because he wonder about expiry of the LC. His arguments : If all shipping documents couriered to issuing Bank on 23 Nov, the docs will reach issuing bank on 26 November (LC expired already). I insists to ask him to negotiate my LC. I said to him “Please refer to UCP 600 for this circumtances”. After involving his District Manager finally the bank has negotiated my LC.
I wonder I will facing again this circumstances in the future. Exactly, WHAT UCP 600 SAID REGARDING PRESENTATION DOCUMENTS CLOSE TO LC EXPIRY ? Please kindly help. thank you,
Another important point is that an ‘advising’ bank only receives and forwards the shipping documents; it does not check or validate them. A ‘confirming’ bank does check and validate the documentation so in case there is any discrepancy, it can be handled locally. This is significant when time is of the essence but should become less relevant as you gain experience in handling LCs and learn the pitfalls to avoid. Another point of relevance is partial shipments. In case you are shipping more than one container, it is prudent that the LC includes allowance for partial shipments. This allows the seller to start collecting right after the first shipment and not have to wait until all the order has been shipped to start the collections process.
Hi Everybody,
I wonder if the carrier should compy with specific standards or not? I mean it is one thing when the carrier is a big international company like Maersk, the other when it is a relatively small NVOCC (or maybe just a forwarding company) issuing HBLs.
I have experienced with LC from USA for frozen fish or frozen foods. Seller do not accept the LC with clause ” PAYMENT after passed USFDA Approval” or anything wording like this. But seller can accept for clause ” Beneficiary’s Certificate stating that “If goods rejected by USFDA, beneficiary will reimburse to applicant all fund that already drawn plus any additional cost occured…… …… ….. ” “
Re: the letter of credit (LC) article. You left out one of the most important steps, i.e., the seller’s instructions to the buyer detailing the specific terms/wording to be included in the letter of credit. These instructions should be sent to the buyer BEFORE the buyer’s bank draws up the actual LC. The seller’s documentation must be EXACTLY identical to the terms/wording of the LC or the bank will declare the documentation differences as “discrepancies” and refuse payment until after the seller OKs the differences. This could possibly defeat the original purpose (protection) of the LC and/or add expenses (charged by the bank) to make the changes. In other words, once the buyer/seller agree to conduct the sale with an LC, they must then agree to the terms, especially its various dates. If not, the buyer may receive the copy of the LC and then realize he cannot comply with it and then must go back to the issuing bank for (additional) costly changes.
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When possible, offering extended payment terms can be extremely attractive to new foreign buyers and may ultimately lead to winning more export sales. However, to offer this sought-after benefit, you must check the foreign buyer’s credit which is not always easy to find. If you are unable to find reliable credit information, one trade finance tool available to the exporter is the Letter of Credit.
A Letter of Credit is a contractual commitment by the foreign buyer’s bank to pay once the exporter ships the goods and presents the required documentation to the exporter’s bank as proof.
As a trade finance tool, Letters of Credit are designed to protect both exporters and importers. They can help you win business with new clients in foreign markets. This means the exporter gets a guarantee of payment while offering the importer reasonable payment terms.
Letters of Credit are one of the most secure payment instruments available but can be labor-intensive and relatively expensive due to bank fees. They are recommended for use in higher-risk situations, when the importer’s credit is unacceptable or not available, when dealing with a new or less-established trade relationship or when extended payment terms are requested.
The required documents are detailed and prone to errors and discrepancies. To avoid payment delays and extra fees, documents required by the Letter of Credit should be prepared by trained professionals.
Additionally, the exporter should consult with their bank before the importer applies for the Letter of Credit. Ask about:
Protecting the Beneficiary
421 Accesses
The primary concern of a seller is whether they will be paid by the buyer for the shipment of goods. A letter of credit provides an independent payment undertaking of a bank, subject to the presentation of complying documents. For the seller, it is often said that ‘the documents are more important than the goods’.
If the documents do not fully conform to the credit, this is known as a ‘discrepant’ presentation which at best can result in delayed payment and at worst in rejection of documents and no payment.
This chapter discusses the optimum structure of the export letter of credit to mitigate risk for the seller and to provide a pre-shipment finance or post-shipment discount or negotiation solution. The same trading scenario is examined in Chap. 5 to illustrate the key differences in structure between an export and import letter of credit.
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Jones, S.A. (2019). Letters of Credit for Export. In: The Trade and Receivables Finance Companion. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-25139-0_6
DOI : https://doi.org/10.1007/978-3-030-25139-0_6
Published : 15 February 2020
Publisher Name : Palgrave Macmillan, Cham
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Online ISBN : 978-3-030-25139-0
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How a letter of credit works, types of letters of credit, example of a letter of credit.
Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.
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A letter of credit, or a credit letter, is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. If the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. It may be offered as a facility (financial assistance that is essentially a loan).
Due to the nature of international dealings, including factors such as distance, differing laws in each country, and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade to protect buyers and sellers.
Buyers of major purchases may need a letter of credit to assure the seller that the payment will be made. A bank issues a letter of credit to guarantee the payment to the seller, essentially assuming the responsibility of ensuring the seller is paid. A buyer must prove to the bank that they have enough assets or a sufficient line of credit to pay before the bank will guarantee the payment to the seller.
Banks typically require a pledge of securities or cash as collateral for issuing a letter of credit.
Because a letter of credit is typically a negotiable instrument , the issuing bank pays the beneficiary or any bank nominated by the beneficiary. If a letter of credit is transferable , the beneficiary may assign another entity , such as a corporate parent or a third party, the right to draw.
The International Chamber of Commerce’s Uniform Customs and Practice for Documentary Credits oversees letters of credit used in international transactions.
Banks usually charge a fee for a letter of credit, which can be a percentage of the total credit they are backing. The cost of a letter of credit will vary by bank and the size of the letter of credit. For example, the bank may charge 0.75% of the amount that it's guaranteeing.
Fees can also depend on the type of letter. In an import-export situation, an unconfirmed letter of credit is less costly. A confirmed letter of credit may have higher fees attached based on the issuing bank's credit strength.
The types of letters of credit include a commercial letter of credit, a revolving letter of credit, a traveler’s letter of credit, a confirmed letter of credit, and a standby letter of credit. International trade will also sometimes use an unsecured—also called a red clause —letter of credit.
This is a direct payment method in which the issuing bank makes the payments to the beneficiary. In contrast, a standby letter of credit is a secondary payment method in which the bank pays the beneficiary only when the holder cannot.
This kind of letter allows a customer to make any number of draws within a certain limit during a specific period. It can be useful if there are frequent merchandise shipments, for example, and you don't want to redraft or edit letters of credit each time.
For those going abroad, this letter will guarantee that issuing banks will honor drafts made at certain foreign banks.
A confirmed letter of credit involves a bank other than the issuing bank guaranteeing the letter of credit. The second bank is the confirming bank, typically the seller’s bank. The confirming bank ensures payment under the letter of credit if the holder and the issuing bank default . The issuing bank in international transactions typically requests this arrangement.
A standby letter of credit provides payment if something does not occur, which is the opposite of how other types of letters of credit are structured. So, instead of facilitating a transaction with funding, a standby letter of credit is like an insurance contract. It protects and compensates one party (the beneficiary) if the other party named in the agreement fails to perform the stated duty or meets certain service level agreements outlined in the letter of credit.
Citibank offers letters of credit for buyers in Latin America, Africa, Eastern Europe, Asia, and the Middle East, who may have difficulty obtaining international credit on their own. Citibank’s letters of credit help exporters minimize the importer’s country risk and the issuing bank’s commercial credit risk.
Letters of credit are typically provided within two business days, guaranteeing payment by the confirming Citibank branch. This benefit is especially valuable when a client is located in a potentially unstable economic environment.
Letters of Credit are best prepared by trained professionals, as mistakes in the detailed documents required can lead to payment delays and fees. Due to industry variations and types of letters of credit, each may be approached differently.
Here's an import-export example.
Obtaining letters of credit may be necessary in certain situations. However, like anything else related to banking, trade, and business, there are some pros and cons to acknowledge.
Can create security and build mutual trust for buyers and sellers in trade transactions.
Makes it easier to define the specifics of when and how transactions are to be completed between involved parties.
Letters of credit can be personalized with terms that are tailored to the circumstances of each transaction.
Can make the transfer of funds more efficient and streamlined.
Buyers typically bear the costs of obtaining a letter of credit.
Letters of credit may not cover every detail of the transaction, potentially leaving room for error.
Establishing a letter of credit may be tedious or time-consuming for all parties involved.
The terms of a letter of credit may not account for unexpected changes in the political or economic landscape.
Often, in international trade, a letter of credit is used to signify that a payment will be made to the seller on time and in full, as guaranteed by a bank or financial institution. After sending a letter of credit, the bank will charge a fee, typically a percentage of the letter of credit, in addition to requiring collateral from the buyer. Among the various types of letters of credit are a revolving letter of credit, a commercial letter of credit, and a confirmed letter of credit.
Consider an exporter in an unstable economic climate, where credit may be more difficult to obtain. A bank could offer a buyer a letter of credit, available within two business days, in which the purchase would be guaranteed by the bank's branch. Because the bank and the exporter have an existing relationship, the bank is knowledgeable of the buyer's creditworthiness , assets, and financial status.
As one of the most common forms of letters of credit, commercial letters of credit are when the bank makes payment directly to the beneficiary or seller. Revolving letters of credit, by contrast, can be used for multiple payments within a specific time frame. Typically, these are used for businesses that have an ongoing relationship, with the time limit of the arrangement usually spanning one year.
A letter of credit is like an escrow account in that payment to the beneficiary only happens when the other party performs a specific act or meets other performance criteria spelled out in the letter of credit agreement.
Letters of credit can play an important part in trade transactions. There are different types of letters of credit that may be used, depending on the circumstances. If you need a letter of credit for a business transaction, your current bank may be the best place to begin your search. However, you may need to expand the net to include larger banks if you maintain accounts at a smaller financial institution.
International Trade Administration. " What Is a Letter of Credit? "
International Chamber of Commerce. “ Global Rules .”
Export-Import Bank of the United States. " To Confirm or Not to Confirm (Letters of Credit) ."
Cornell Law School. " 12 CFR § 208.24 - Letters of credit and acceptances. "
USAID. " Letters of Credit and Trade Finance ," p.106.
FDIC. " Off-Balance Sheet Activities ," p.2
Columbia Bank. " Letters of Credit. "
Citi. “ International Trade .”
Citi. “ Products and Services .”
International Trade Administration. " Letter of Credit. "
International Trade Administration. " Trade Finance Guide ," Page 7.
Interim final rule extends compliance dates pursuant to court orders
WASHINGTON, D.C. - Today, the Consumer Financial Protection Bureau (CFPB) issued an interim final rule to extend compliance deadlines for the small business lending rule. After the CFPB issued the small business lending rule on March 30, 2023, a federal court in Texas stayed the rule pending the Supreme Court’s decision in CFPB v. CFSA . The Texas court also required the CFPB to extend the rule’s compliance deadlines to compensate for the period stayed. Today’s interim final rule follows the recent Supreme Court decision in CFPB v. CFSA.
The interim final rule extends compliance dates by 290 days, which is the time that has elapsed between the Texas court’s first issuance of a stay last year and the Supreme Court’s decision in CFPB v. CFSA last month. Lenders with the highest volume of small business loans must begin collecting data by July 18, 2025; moderate volume lenders by January 16, 2026; and the smallest volume lenders by October 18, 2026. The deadline for reporting small business lending data to the CFPB remains June 1 following the calendar year for which data are collected. Thus, high volume lenders will first submit data by June 1, 2026, while moderate and low volume lenders will first submit data by June 1, 2027. Under the interim final rule, lenders may continue using their small business originations from 2022 and 2023 to determine their initial compliance date, or instead use their originations from 2023 and 2024.
Lenders may choose to start collecting data earlier. The rule permits lenders to collect demographic data up to one year before their compliance date to test their procedures and systems. The CFPB has also updated its grace period to reflect the revised dates. The CFPB does not intend to assess penalties for reporting errors for the first 12 months of collection, and it intends to conduct examinations only to assist lenders in diagnosing compliance weaknesses, so long as lenders engage in good faith compliance efforts.
Resources to help lenders implement the small business lending rule are located on the Small Business Lending Database web page. The CFPB's small business lending data submission platform will be available for open beta testing in August. Interested beta testing participants and others who wish to receive updates related to rule more generally should sign up for updates on the Small Business Lending Database page and adding their email address in the email sign up box.
Read today’s interim final rule .
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit www.consumerfinance.gov .
Letters of credit without presentation periods.
Documents must be presented to the nominated banks within allowed time frame under letters of credit payments.
Otherwise issuing banks or confirming banks raise late presentation discrepancy .
According to the letters of credit rules a presentation consists of a transport document should be presented to the nominated bank within 21 days after the date of shipment , but not later than the expiry date of the letter of credit.
If the letter of credit does not require presentation of a transport document, then the presentation period does not become effective.
Under such a scenario, the documents must be presented to the nominated bank before the expiry date .
If the letter of credit is silent in regards to the period of presentation , the documents must be presented to the nominated bank before the expiry date, when the letter of credit does not ask for a transport document.
A Serbian food exporter signs a proforma invoice with in importer located in Kuwait. The letter of credit amount is 75.000 EUR and partial shipments are not allowed.
Expiry date of the letter of credit is 15.February.2019.
The letter of credit is silent in regards to the presentation period, which means that there is no Field 48 -Period for Presentation indicated in the letter of credit.
Option 1: Letter of credit does not ask for a presentation of a transport document:
Option 2: Letter of credit asks for a presentation of a transport document:
Under the same scenario, please assume that selected transportation mode is sea shipment and transport document is a bill of lading and latest date of shipment is 10.January.2019.
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Ucp600 and letters of credit, ucp 600 (uniform customs & practice for documentary credits) - what does ucp 600 mean, ucp 600 and the letter of credit.
The Uniform Customs & Practice for Documentary Credits (UCP 600) is a set of rules agreed by the International Chamber of Commerce, which apply to finance institutions which issue Letters of Credit – financial instruments helping companies finance trade. Many banks and lenders are subject to this regulation, which aims to standardise international trade, reduce the risks of trading goods and services, and govern trade.
The UCP 600 (“Uniform Customs & Practice for Documentary Credits”) is the official publication which is issued by the International Chamber of Commerce (ICC). It is a set of 39 articles on issuing and using Letters of Credit, which applies to 175 countries around the world, constituting some $1 trillion USD of trade per year.
The UCP 600 replaced the UCP 500 on the 1st July 2007. It was brought about to standardise a set of rules aiming to benefit all parties during a trade finance transaction. UCP 600 was created by industry experts, and mandated by the Banking Commission, rather than through legislation. The first UCP was created in 1933 and has been revised by the ICC up to the point of the UCP 600.
The UCP 600 rules are voluntarily incorporated into contracts and have to be specifically outlined in trade finance contracts in order to apply. They also allow flexibility for the international parties involved.
An accompaniment to the UCP 600 is the International Standard Banking Practice for the Examination of Documents under Documentary Credits (ISBP), ICC Publication 745. It assists with understanding whether a document complies with the terms of Letters of Credit.
Credits that are issued and governed by UCP 600 will be interpreted in line with the entire set of 39 articles contained in UCP 600. However, exceptions to the rules can be made by express modification or exclusion.
The UCP 600 are the most successful rules ever developed in relation to trade and most Letters of Credit are subject to them. At the recent ICC UK Winter Trade Finance Conference , there was a special programme which addressed the UCP 600. This looked at recent developments in industry practice and ICC policy, as well as a review of the latest Banking Commission Opinions.
Summary of the ucp 600.
Here are a few of the key elements which make up the UCP 600:
At Trade Finance Global, many people ask whether the UCP 600 will be revised. The UCP 600 is a set of rules developed by the International Chamber of Commerce on the issuance and governance of Letters of Credit, which account for a significant proportion of global trade finance transactions.
When looking at the UCP 600, it is important to look at the market environment and general notes about the current guidelines. It is general consensus that UCP 600 will not be revised any time soon. Some of the reasons for this and general notes about the UCP are outlined below:
The big question is, if it were to be revised,
Part 3 - evolution of ucp 600 rules – will we see ucp 700 rules.
Trade Finance Global interviewed Pradeep Taneja, Managing Director of Taneja Global Trade Consulting, Bahrain and Co-Chairman and Board member of ICC Bahrain to learn more about Letters of Credit. To read this inteview, click here .
In 2019, the International Chamber of Commerce also released an updated supplement for the electronic rules (eRules) of the Uniform Customs & Practice for Documentary Credits. TFG covered the key changes for V2.0 of the eUCP rules, which can be found here .
Articles 1 – 5 – General Provisions and Definitions
Articles 6 – 13 – Liabilities and Responsibilities
Articles 14 – Examination of Documents
Article 15 – 17 – Examination of Documents
Articles 18 – 28 – Documents
Articles 29 – 33 – Miscellaneous Provisions
Articles 34 – 37 – Disclaimers
Articles 38 – 39 – Transferable Credit & Assignment
The UCP 500, was revised in 1993, a process which reviewed and overhauled opinions, decisions, URR525, ISP98 and eUCP.
Seven key articles were amended.
In comparison to UCP 500,
UCP600 PDF Infographic:
NEXT >> Problems with Letters of Credit
What about the eucp.
ICC Update on UCP
Recently, the ICC updated eUCP 600 rules (eRules), to accelerate the digitilisation of trade finance. Trade Finance Global have published the updates on the eRules for ‘eUCP 600’, which are supplementary rules to these UCP 600 rules. Find out more here .
1 | Introduction to the Letter of Credit 2 | Types of Credit 3 | UCP 600 and the Letter of Credit 4 | UCP 600 – Ultimate Guide 5 | Benefits of Letters of Credit 6 | Handling Document Discrepancies 7 | Restricted Letters of Credit 8 | Letters of Credit vs Bank Guarantees 9 | Standby Letters of Credit 10 | Sight Letters of Credit 11 | eUCP Explained 12 | URC 522 and eURC 13 | SWIFT Messaging Types 14 | Research 15 | BAFT & TFG Guide 16 | Parties Involved 17 | Letters of Credit Rules 18 | ISBP 821 19 | Financial Crime, Fraud and Sanctions 20 | Presentation of Documents 21 | Dispute Resolution 22 | Digitalisation and the Future
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Deepesh Patel is Editorial Director at Trade Finance Global (TFG). In this role, Deepesh leads efforts in developing TFG’s brand, relationships and strategic direction in key markets, including the UK, US, Singapore, Dubai and Hong Kong.
Deepesh regularly chairs and speaks at international industry events with the WTO, BCR, Excred, TXF, The Economist and Reuters, as well as industry associations including ICC, FCI, ITFA, ICISA and BAFT.
Deepesh is the host of the ‘Trade Finance Talks’ podcast and ‘Trade Finance Talks TV’. He is co-author of ‘Blockchain for Trade: A Reality Check’ with the ICC and the WTO, alongside other industry research.
In addition to his work at TFG, Deepesh is a Strategic Advisor for WOA, and works closely with ITFA. He also sits on the Fintech Working Group of the Standardised Trust.
Prior to TFG, Deepesh worked at Travelex where he was responsible for the cards business and the Travelex Money app in Europe, NAM, UK and Brazil. Deepesh is Chair of Governors and co-opted LA Governor of the Wyvern Federation, which has responsibility for 5 primary schools in South London.
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In that case, the latest date of shipment is mentioned as 69 days. The presentation period is 21 days if there's no specific requirement from the buyer or seller. The presentation can be both Electronic records or paper documents. ... ('Period for presentation in days') in Letter of Credit (L/C) " Danford Salvatory says: May 7, 2021 at ...
If the expiration date is January 5, documents must be presented by January 5, not the 11th. Some letters of credit require a presentation period of seven days, some 15, etc. If the letter of credit does not state a presentation date, the exporter has 21 days according to UCP Article 14c. Exporters should be aware of this requirement and feel ...
Latest date of shipment is an optional information and not every letter of credit issued in swift format contains a latest date of shipment. Latest date of shipment can be meaningful only if the letter of credit requests presentation of a transport document.
Field 48: Period for Presentation is a field in MT 700 swift message type that is used to specify the period of time after the date of shipment within which the documents must be presented for payment, acceptance or negotiation. This is an optional field. According to current letter of credit rules except as provided in sub-article 29 (a), a ...
LC Master: On 13 April 2016 Dolphy, if the Letter of Credit requires presentation period of 21 days, and latest shipment date is April 1, 2016, then LC Expiry date is April 22, 2016. Ahmad: On 29 April 2016 Why sellers required Lc at sight always
• Dated after the date of shipment, and no evidence that coverage is effective at the latest date from shipment • Not endorsed or countersigned • Not all originals presented or accounted for • Insurance risks covered not as specified on the letter of credit General • Late presentation • Letter of Credit expired
Latest Ship Date 14. Presentation Date/Period 15. Partial Shipments (allowed, not allowed) 16. Transshipments (allowed, not allowed) 17. Paying Bank 18. Drawee Bank 19. Reimbursing Bank ... Letter of Credit Documentation-How to Avoid Discrepancies: March 21 3. Roles and Responsibilities of Banks in the Payment Process: April 18. Home.
June 1, 2020. 53. A Letter of Credit is also known as Documentary Credit. A Letter of Credit is a primary means of payment in an international trade transaction. By default a Letter of Credit is irrevocable. Many of you would have come across the term Letter of Credit (L/C) .. If you are a shipping line, you would have heard this term from ...
20 DOCUMENTARY CREDIT NUMBER: (Issuing bank will insert its number) 23 REFERENCE TO PRE-ADVICE 31C DATE OF ISSUE: (Date issuing bank agreed to issue the L/C) 40E APPLICABLE RULES: UCP LATEST VERSION 31D DATE AND PLACE OF EXPIRY: (YYMMDD) IN U.S.A. -Try to avoid places overseas e.g. issuing bank's counters
1. The applicant or buyer/importer applies to the issuing bank to issue an documentary credit (LC) in favor of the exporter/seller/supplier. 2. The advisory bank (exporter's bank) receives the ...
After the drawing, the amount available is restored to £1,000. An example of an LC revolving by time on a cumulative basis would be if say, a revolving LC is issued for the £1,000, and available by drawings of £1,000 per month. A drawing made for say, £900 results in the next month's availability to be for £1,100.
The key differences between red and green clause letters of credit are: 1) Advance percentage: - With a red clause LC, the percentage of the total letter value available for an advance is generally around 20 - 25%. - In contrast, with a green letter of credit, the percentage is far greater, often closer to 75 - 80% of the total value of ...
In general LCs are issued either at "sight LCs" or "Usance LCs.". For the first payment is made "at sight" i.e. right after presentation of the documents. For the latter payment is made after a specified number of days (as determined by the LC) - e.g. "90 days after shipment.". The timelines given by the rules.
The effective date and expiration date of the letter of credit. ... The date of the presentation. ... The latest version, ISBP 745, was issued in 2013. ...
"Article 36 under UCP 600 is modified as follows: If the Letter of Credit expires while the place for presentation is closed due to events described in said Article, the expiry date of this Letter of Credit shall be automatically extended without amendment to a date thirty (30) calendar days after the place for presentation reopens for ...
This means that changing the "period for presentation" may trigger changes to "latest date of shipment" and "date of expiry". Latest date of shipment. As such the "latest date of shipment" is not defined in the UCP 600. There are, however, different places throughout the UCP 600 where "latest date of shipment" is mentioned ...
A Letter of Credit is a contractual commitment by the foreign buyer's bank to pay once the exporter ships the goods and presents the required documentation to the exporter's bank as proof. As a trade finance tool, Letters of Credit are designed to protect both exporters and importers. They can help you win business with new clients in ...
The buyer's required latest date of shipment is 30 April 20. The port to port sea transit time is 22 days. ... This is the place at which documents must be received within the time allowed for presentation in the letter of credit. In the case of the credit being made available with a nominated bank, it must expire at the counter of the ...
Letter Of Credit: A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is ...
Presentation Period Example 6: Field 48: Period for Presentation DOCUMENTS TO BE PRESENTED WITHIN 21 DAYS AFTER THE DATE OF SHIPMENT, BUT WITHIN THE VALIDITY OF THE CREDIT. Expiry Date. Expiry Date is the latest date for presentation of documents for payment, acceptance, or negotiation under a letter of credit transaction.
The interim final rule extends compliance dates by 290 days, which is the time that has elapsed between the Texas court's first issuance of a stay last year and the Supreme Court's decision in CFPB v. CFSA last month. Lenders with the highest volume of small business loans must begin collecting data by July 18, 2025; moderate volume lenders ...
Field 31D: Date and Place of Expiry is a field in MT 700 swift message that is used to indicate the date and place of expiry of the letter of credit. This is a mandatory field, which means that it must be stated in all of the letters of credit issued via MT 700 swift format. This field specifies the latest date for presentation under the ...
Option 2: Letter of credit asks for a presentation of a transport document: Under the same scenario, please assume that selected transportation mode is sea shipment and transport document is a bill of lading and latest date of shipment is 10.January.2019.
TEXAS CREDIT LETTER . Published Weekly by the Texas Office of Consumer Credit Commissioner • 2601 N Lamar Blvd • Austin, TX 78705-4207 . Volume 43, Number 52, June 26, 2024 . ISSN 0738-6877 . NOTICE OF RATE CEILINGS . ... Texas Credit Letter Created Date: 6/25/2024 3:11:19 PM ...
The UCP 600 ("Uniform Customs & Practice for Documentary Credits") is the official publication which is issued by the International Chamber of Commerce (ICC). It is a set of 39 articles on issuing and using Letters of Credit, which applies to 175 countries around the world, constituting some $1 trillion USD of trade per year.
Wisconsin Rivalry. Credit: EA. Rankings Week has been fun, but it's time to get to the nucleus of features in College Football 25. If you loved Dynasty Mode in NCAA Football and have been waiting ...