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What’s a month between friends?

Read the full situation and winning solution. With recognition: Congratulations to our readers whose solutions were also recognised for their technical merit.

Here is your chance to demonstrate your ability to disentangle the most involved, contentious or just plain weird combinations of documents and to solve a puzzle in the field of documentary operations.

Dear TFP Experts, can you please clarify the correct procedure to be taken in the following situation?

We issued a letter of credit available by acceptance with our bank as issuing bank at “90 DAYS SIGHT”. Documents were presented on approval by the presenting bank with discrepancies in respect of conflict in data between documents. We issued a timely notice of refusal by way of SWIFT message MT 734 as is the normal practice and contacted the applicant for a waiver of the discrepancies.

Despite many follow-up communications the applicant did not provide the waiver of discrepancies until 28 days after the date we received the documents from the presenting bank.

Upon receipt of the waiver from the applicant our bank took up the documents on the same day and accepted the draft for payment at 90 days from the date of our acceptance.

When we advised the presenting bank that the discrepancies had been waived and informed them of the forthcoming fixed maturity date we were surprised to receive a message from them stating:

“As the maturity date is now one month later than anticipated by the beneficiary this is unreasonable and unfair.”

Can you please provide guidance as to whether our approach is correct?

We in the documentary operations department believe it is, but other colleagues in the commercial side of the bank disagree.


And the winning solution is...

Dear trade finance clinic,

I know that by referring to the ISBP and copying and pasting we can come to the conclusion that the maturity date of 29 December 2016 is technically in order.

However, in our day-to day-business it is also important to use common sense and have the interests of our customers foremost on our minds.

When the letter of credit is available by acceptance at 90 days’ sight, despite the discrepancies and the subsequent waiver received from the applicant, it is common sense that the 90 days should be calculated from the date of presentation of the documents and not from the date of waiver receipt and documents acceptance.

Therefore, the presenting bank’s message to the issuing bank is to my mind quite reasonable. Perhaps the language used and the words “unreasonable and unfair” contained in their message are not appropriate for business correspondence by SWIFT. They should have asked the issuing bank to calculate the maturity date as the presentation date + 90 days, which would be in line with what the exporter and importer had agreed in their contract.

Azhar Salikhova
Bank CenterCredit, Kazakhstan

With recognition

The following readers are recognised for their technical merit

(Alphabetical order)

  • Innesa Amirbekyan

    Anelik Bank, Armenia

  • Hoda Abd El Hameed Ezzat El Shimi

    QNB Alahli, Egypt

  • Kareem Abdel-Rahman Abdel-Moneem Morsy

    QNB Alahli, Egypt

  • Mohamed Samy Ahmed Mohamed

    QNB Alahli, Egypt

  • Housam Al-Khoury

    Bank al Etihad, Jordan

  • Eleonora Avetisyan

    Armeconombank, Armenia

  • Domenico Del Sorbo

    Trade & Export Finance Specialist, Italy

  • Andrej Eftimov

    NLB Banka, FYR Macedonia

  • Mostafa El Toweiry

    Barclays, Egypt

  • Jelena Gušav

    OTP Bank, Serbia

  • Ahmed Yehia Ismail Ahmed

    QNB Alahli, Egypt

  • Nelli Kocharyan

    Converse Bank, Armenia

  • Sergey Kosyan

    Inecobank, Armenia

  • Riabi Lamia

    Attijari Bank, Tunisia

  • Mai Medhat Hanafy Osman

    QNB Alahli, Egypt

  • Jasmina Milovska

    NLB Banka, FYR Macedonia

  • Svitlana Piatak

    UKRSOTSBANK, Ukraine

  • Pena Poladov,

    Central Bank of Turkmenistan, Turkmenistan

  • Sandra Prosnec

    Erste & Steiermärkische, Croatia

  • Yasmine Raafat Abo Al Makarem Mohamed Eid

    QNB Alahli, Egypt

  • Raghda Salah

    QNB Alahli, Egypt

  • Amani Samih

    Bank al Etihad, Jordan

  • Aneta Stojmanovska

    Komercijalna Banka, FYR Macedonia

  • Irena Vaskov

    Komercijalna Banka, FYR Macedonia