This blog provides a brief overview of all the Opinions that were approved by the ICC Banking Commission at its meeting held in April 2015. The full text of each opinion should be reviewed to fully understand all the issues.
TA.814 & TA.820 have not been included as these were revised and will be included in a subsequent blog covering Part 2.
TA.815rev - ‘Free Out' vs ‘unloading cost' & Deduction of reimbursing bank fees
The trade term was stated to be "CPT Alexandria Port, Egypt without unloading cost". The credit stated that reference to ‘unloading costs' on the bill of lading will be acceptable.
The presented bill of lading contained a clause stating ‘Free Out Alexandria' which was seen by the issuing bank as a discrepancy but disputed by the confirming bank.
In an unrelated issue, the confirming bank also complained that the reimbursing bank had deducted fees from the ultimate settlement amount that were not appropriate to the confirming bank.
It was concluded that the reference ‘free out', when predicated upon the context of the bill of lading and ISBP 745 paragraph 27 (b), is not a conflict in respect of unloading costs as it specifically relates to costs associated with loading or unloading of goods.
The question as to whether or not the reimbursing bank was entitled to deduct certain fees was considered to be outside the scope of UCP 600.
TA.816rev - Short shipment and short drawing
A credit allowed partial shipment but included a condition that if there were to be no further shipments, then the beneficiary must present a statement to this effect, and for the final shipment, this must also be evidenced by a certificate issued by the beneficiary.
The credit was not fully drawn and the beneficiary presented, along with the other required documents, a certificate confirming that there would be no further shipments.
The presentation was considered by the issuing bank to be discrepant due to ‘short shipment and short drawing'. The nominated bank disputed this due to the fact that the credit allowed for partial shipments and the conditions relating to the certificates that were to be issued by the beneficiary.
As emphasised in the analysis, this was a self-contradicting credit for which the issuing bank must take responsibility.
The conditions of this credit may lead to a dispute between the buyer and seller but this is outside the scope of UCP 600. The discrepancy was considered as invalid.
TA.817rev - Shipment in FCL container
The credit required the bill of lading to show shipment effected in FCL container. The presented bill of lading stated CY/CY and not FCL, which was mentioned as a discrepancy by the issuing bank and disputed by the nominated bank.
A lot of discussion was provoked by this query as to the definition of FCL and CY/CY.
Ultimately it was considered that a document examiner should not be expected to understand such terms. As such, the document is considered to be discrepant, as it did not make express reference to a FCL shipment.
TA.818rev - No indication of applicant on the invoice
Documents were presented including an invoice that, whilst it did not specifically identify the applicant as such, included the correct full name and address of the applicant under a header ‘Customer'.
The issuing bank raised a discrepancy that there was no indication of the applicant on the invoice i.e., implying that the invoice should have a header "applicant".
As stated in the analysis, there is nothing in either UCP 600 or ISBP 745 that requires the name and address of the applicant to appear in a specific place within an invoice.
Provided the name of the applicant appears somewhere on the invoice, it is compliant with UCP 600 sub-article 18 (a) (ii).
TA.819rev - Compliance of stamps and signature on a CMR
This query was with regard to UCP 600 article 24 and the acceptability of CMR documents that had been stamped and signed by a variety of methods and, in particular, when a combination of fields 16 "Transporter (name, address, land)", 17 "Transporter successive (name, address, land) and 23 "Signature and stamp of Transporter" are completed.
The analysis pointed out that a CMR is utilised for road transport and that signing requirements are enshrined within UCP 600 sub-article 24 (a).
Three of the various scenarios were considered to be compliant, whilst one was considered to be discrepant.
TA.821rev - Release of original documents under a documentary collection without payment.
A remitting bank mailed a documentary collection to a branch of the presenting bank. Because that specific branch did not handle such transactions, the envelope was apparently forwarded, unopened, to the drawee.
The envelope included a full set of bills of lading that the drawee utilised in order to collect the goods without effecting payment.
It was unclear from the information received whether or not there was another envelope that was actually addressed to the drawee within the envelope that was addressed to the presenting bank.
In any event the collecting bank, under URC 522, is responsible for the correct handling of the collection.
The remitting bank has a right to insist on payment by the collecting bank and, if not, return of the documents. The presenting bank was liable to make payment / settlement.
TA.822rev - Addition of a double confirmation on instruction of the issuing bank
An advising bank confirmed a credit. The credit was then also confirmed by the second advising bank.
The query questioned the possibility of a credit having a ‘double' confirmation.
As outlined in the analysis, this is entirely feasible. UCP 600 does not restrict credits to having only one confirming bank.
TA.823rev - Handwritten notations on a Charter Party Bill of Lading
The reverse of a presented charter party bill of lading included two lines of handwritten notations, one of which was in respect of the amount of ‘freight paid'. Such amount was not stated on the front of the bill of lading.
The credit had called for the charter party bill of lading to indicate ‘the value of freight prepaid'.
As such, it would be expected that the issuer of the charter party bill of lading would add such data to the face of the document or authenticate the inclusion on the reverse.
In view of the fact that such details and authentication was missing, the document was considered to be discrepant.
TA.824.rev - Conflicting payment terms & additional order numbers
A credit was issued available by deferred payment payable at 60 days from date of shipment and subsequently two presentations were made.
The issuing bank refused both presentations for the discrepancy ‘conflicting payment terms' on the invoice, with one further discrepancy for the second presentation stating that additional order numbers existed on the packing and weight lists which were not covered by the invoice.
The first discrepancy apparently related to a remark on the invoice that indicated ‘Letter of Credit at sight'.
This was considered as non-consequential as the invoice also correctly stated the payment terms in accordance with the credit.
The additional order numbers were seen to be additional information which, provided it did not conflict with any other information in the presented documents, was not to be treated as a discrepancy.
TA.825rev - Payment of credit made by MT103 without stating credit reference
A nominated bank provided prepayment to the beneficiary under a deferred payment credit and the issuing bank were informed accordingly.
However, at maturity, it appeared that the issuing bank had not provided settlement.
Subsequent to investigation by the nominated bank it transpired that the issuing bank had made payment, however not by the usual channels. Payment was, in fact, made by MT103 directly to the beneficiary's account with the nominated bank and without mentioning the credit reference.
It was concluded that the method of payment as above was outside the credit. The issuing bank had failed to comply with UCP 600 sub-article 7 (c) in reimbursing the nominated bank and continues to be liable until such payment is made, along with any appropriate delayed payment interest.
TA.826rev - Discrepancy of "early presentation".
A credit was issued with the condition that documents were to be presented at least 21 days after shipment.
Documents were presented 11 days after the date of shipment, which caused the issuing bank to refuse the documents stating a discrepancy of ‘early presentation'.
In accordance with the terms and conditions of the credit, the issuing bank would not have expected documents to be presented until the earliest 21 days after the date of shipment.
Therefore, the issuing bank was validly entitled to refuse the documents.
It was further questioned as to whether or not the issuing bank had the right to return the documents to the presenter. Obviously this is the case. However, in the event that the documents were re-presented between the 21st day after date of shipment and the expiry date, the issuing bank would be required to honour.
TA.827rev - Signing and content of a copy bill of lading
As required by a documentary credit, a copy bill of lading was presented.
The issuing bank refused the documents on the basis that a forwarder instead of a carrier, master or their agent had apparently signed the original bill of lading.
The analysis clarified that the signing requirements of article 20 only applied when a credit called for the presentation of at least one original bill of lading.
Presentation of a copy bill of lading, as allowed by this particular credit, is subject to examination under UCP 600 sub-article 14 (f) and further clarified by ISBP 745 paragraph A6 (a).
In view of the fact that a copy bill of lading cannot be considered as a transport document, the fact that a forwarder signed it without acting on behalf of the carrier cannot be considered as a discrepancy.
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