📄 EXPIRY OR EXPIRATION DATE
US Capital Private Bank Knowledge Base
📖 What is Expiry or Expiration Date?
The Expiry or Expiration Date is the final date by which a draft and all related documents drawn under a letter of credit must be presented to the negotiating, accepting, paying, or issuing bank to secure payment.
⚙️ Key Details
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For a straight credit, the issuing bank’s obligation to pay ends on this date if the required documents have not been presented.
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For a negotiable credit, the issuing bank is still required to honor the credit if all complying documents were submitted before the expiry date, even if payment occurs later.
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This date protects all parties by defining the timeframe within which the payment process must be completed.
💡 Importance in Trade Finance
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Ensures timeliness and clarity in the settlement of international trade transactions.
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Provides certainty to exporters and importers about when payments must be made or claims must be submitted.
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Helps banks manage risks by limiting exposure beyond a specified date.
⚠️ Considerations
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Missing the expiry date generally results in the bank refusing to honor the letter of credit, which can delay or void payment.
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Extensions may be negotiated if both parties agree, but must be documented and communicated clearly.
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The expiry date should be carefully checked and managed during the preparation and shipment of goods.
📞 Contact US Capital Private Bank
📧 Email: [email protected]
🌐 Website: https://uscapitalprivatebank.com