What does latest date of shipment and expiry date mean in a letter of credit?
There are two important dates exist in a letter of credit transaction. The first one is latest date of shipment and the second one is expiry date.
Definition of Expiry Date on UCP 600
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.
You have to complete the shipment of goods before latest date of shipment.
You have to present a transport document showing a shipment date on or before the latest date of shipment.
If you present a transport document showing a shipment date later than the latest date of shipment than banks raise a "late shipment discrepancy".
Expiry Date :
You have to present the documents to nominated bank on or before expiry date of the lc.
As per UCP 600 lc rules presentation must be make not later than 21 calendar days after the date of shipment.(unless otherwise stated on the credit)
If you can not make the presentation on time, letter of credit will be closed and not be valid any more.
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