Article 6 UCP 600-Availability, Expiry Date and Place for Presentation

a. A credit must state the bank with which it is available or whether it is available with any bank. A credit available with a nominated bank is also available with the issuing bank.

Field 41a Available With … By … is a field in MT 700 swift message type that is used to identify the bank with which the credit is available (the place for presentation) and indicates of how the credit is available. 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 is designed in a way to help the beneficiary to present the document at their convenience before or well within presentation period mostly in their country itself to avoid the late presentation and get paid early or at time.

Last sentence says that credit is always available with issuing bank and nominated bank may be bypassed if beneficiary wants to present document directly to the issuing bank as the final liability of the credit is on opening bank only and the nominated bank concept is to make beneficiary life easier.

b. A credit must state whether it is available by sight payment, deferred payment, acceptance or negotiation.

A credit may be “available by” in below format:

By Acceptance
By Deferred Payment
By Mixed Payment
By Negotiation
By Payment (At Sight)

If the credit is to be freely negotiable by any bank, then the name of that city and country is required, however, if it is freely available anywhere in the world then country indication also not required.

When credit shown either BY DEF PAYMENT or BY MIXED PYMT, the specific details of the payment terms must be specified in field 42P and 42M respectively, however, if contains only by payment then it will deemed to be considered as sight payment. 

c. A credit must not be issued available by a draft drawn on the applicant.

Draft/Bill of Exchange: A draft is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay on demand or at fixed or determinable future time a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. 

We have already discussed in previous articles in other blog that applicant is not a party to letter of credit and an  undertaking is issued by an issuing bank, so in case draft is called it must not be drawn on applicant, if it is drawn in case of applicant, will not serve the purpose of issued credit to safeguard beneficiary in case of non-payment. 

d-i. A credit must state an expiry date for presentation. An expiry date stated for honour or negotiation will be deemed to be an expiry date for presentation.

Field 31d is a mandatory field in letter of credit, this field indicates the latest date for presentation under the documentary credit and the place where documents may be presented, as 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, if letter of credit states “claim must be honoured on or before 10 March 2022, then this date will deemed to be the expiry date for presentation.

ii. The place of the bank with which the credit is available is the place for presentation. The place for presentation under a credit available with any bank is that of any bank. A place for presentation other than that of the issuing bank is in addition to the place of the issuing bank.

Let’s take an example if credit is available with any bank in china, so beneficiary needs to present the document at any bank of their choice in china on or before expiry date and within presentation period if presentation period not given, as per article 14c UCP 600 within 21 days from date of shipment if original transport document is called in Letter of Credit but within expiry.

If credit contains “any bank” without city or country name then anywhere in the world where document are being presented (apart from money laundering, sanctions and local law) will deemed to be the place of presentation.

If field 31d of letter of credit says 10 “March 2022”, China and it has been issued by an Indian bank so it does not mean “expired” if it is being presented directly to issuing bank in India, that Chinese place to present the document is in addition to the place of issuing bank which is in India.  

e. Except as provided in sub-article 29 (a), a presentation by or on behalf of the beneficiary must be made on or before the expiry date.

We will further discuss article 29 of UCP 600 in detail, however, we must need to know sub-article 29a to understand the sub-article 6 (e).

29a. If the expiry date of a credit or the last day for presentation falls on a day when the bank to which presentation is to be made is closed for reasons other than those referred to in article 36, the expiry date or the last day for presentation, as the case may be, will be extended to the first following banking day.

If the expiry date of the credit and last day for presentation falls on a day when the bank is closed due to national holiday or weekends (Saturday/Sunday in case of international bank and second and fourth Saturday and Sundays for Indian Banks), then the letter of credit expiry date or presentation period will deemed to be extended on next banking day and presentation can be made accordingly by the presenter by stating the reason on the cover letter that your good bank was closed on the day when I tried presenting the document at your counter.

Point to note here is that the shipment date will not be extended to the next banking days.

Article 36 also came into picture here in sub-article 29a, just to make us understand in a better way we can touch upon that as well in brief which explains about Force Majeure, so if banks do not have national holidays/weekends and last day for presentation or expiry, falls on a day when bank is closed due to acts of god, riots, civil commotions, insurrections, wars, acts of terrorism, or by any strikes or lockouts or any other causes beyond its control then bank will not, upon resumption of its business, honour or negotiate under a credit that expired during such interruption of its business.

Coming bank to sub-article 6 (e) again, now we can easily understand if bank is not closed due to explained reason in sub-article 29a then the presentation must be made on or before the expiry date and period for presentation.