Professional Documents
Culture Documents
3 November 2008
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
First discrepancy
The CMR provides conflicting information regarding the carrier i.e., two carriers
are named for the same routing and goods.
Explanation:
In Box 16 (the name of the Carrier) of the presented CMR document the name
quote [Company S] unquote was inserted.
In Box 23 (signature and name of the Carrier) the name quote [Company C]
unquote was inserted. There was a signature placed in this box.
Box 17 (the name of the successive carrier) was not completed.
Second discrepancy
The date of receipt of the goods and the date of issuance have been corrected
and should be authenticated by the party making the change.
Explanation
Box 4 (the place and date of receipt of the goods) was filled in with the typed
wording quote France.11-2007 unquote and box 21 (the place and the date of
issuance) was filled in with the typed wording quote Breda..11-2007 unquote. In
both boxes was manually written, in blue ink and on the dots, quote 28 unquote.
UNQUOTE
QUOTE
First discrepancy
Analysis
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Data in documents, when read in context with the credit, the document itself
and international standard banking practice need not be identical, but must not
conflict with data in that document, any other stipulated document or the credit.
ICC opinion R 466 states that a CMR mentioning both quote the carrier
unquote and quote the successive carrier unquote is not considered discrepant.
As per Sub-article 24 (a) (i) of UCP 600 Box 23 is correctly completed by stating
the name and the signature of the carrier, being apparently Company C.
Conclusion
A. The CMR provides conflicting information regarding the carrier i.e., two
carriers are named for the same routing and goods.
B. Box 17 (the name of the successive carrier) is not filled in on the CMR document
and consequently ICC Opinion R 466 is not applicable.
One member has voted against this endorsement by arguing as follows: In daily
practice the shipper issues the CMR on its own stationary. At time of issuance of the
document the shipper apparently thought that Company S would act as the carrier
and consequently this name was filled in (in Box 16.). Later, the driver of the truck
stamped the document with his company stamp (Company C) and signed the
document as carrier in Box 23. Whereas this procedure is normal daily practice,
banks should facilitate and not refuse a CMR for that reason provided the document
is signed in accordance with sub-article 24 (a) (i) of UCP 600.
Second discrepancy
Analysis
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Such documents are only acceptable if this procedure is, in fact, followed."
[emphasis added] The adding of a freight paid stamp or an annotation of an on
board date are not considered to be additions .Unquote
Conclusion
The date of issue and the date of receipt/on board of the goods are crucial
information on any transport document and banks must be able to ascertain that the
issuer of the document completed this information. Therefore, the carrier or its
agent must authenticate manual alterations or additions in this respect. Since ICC
Opinion R533/TA103 was published prior to ISBP, the Banking Commission is
invited to reconsider ICC Opinion R533 in such a way that a manually inserted
issuing date or date of receipt of the goods or on board date on any transport
document is to be considered a correction or alteration as prescribed in ISBP
paragraph 9.
UNQUOTE
Please let us know whether you endorse our opinion with regard to the first
discrepancy and which of the two opinions with regard to the second discrepancy
you endorse.
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ANALYSIS
Discrepancy 1.
The CMR evidences two carrier names and therefore there is no clear indication
of the party that is acting as carrier. Sub-article 24 (a) (i) requires the road transport
document to indicate the name of the carrier. ICC Opinion R.466 is not applicable in
this case.
Discrepancy 2.
Whilst the month and year were typed on the CMR document, the actual day of
the month that the goods were received for shipment was added by pen. The same
circumstances apply to the date of issuance of the CMR.
Sub-article 24 (a) (ii) requires that the CMR indicate the date of shipment or the
date the goods have been received for shipment, dispatch or carriage at the place
stated in the credit. This sub-article goes on to state Unless the transport document
contains a dated reception stamp, an indication of the date of receipt or a date of
shipment, the date of issuance of the transport document will be deemed to be the
date of shipment.
By the completion of box 4 (place and date of receipt of the goods), the date
appearing in box 21 (place and date of issuance) will not be considered in the
determination of the date of receipt or shipment. Therefore, the manual date
inserted in box 21 is not relevant to the determination of compliance of the CMR and
should not be considered discrepant for the reason of the addition not being
authenticated.
CONCLUSION
Discrepancy 2. The insertion of the actual date in box 4, by pen, does not
require authentication by the carrier or their agent. There is no discrepancy.
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The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Document 470/1110rev final
Department of Policy and Business Practices
3 November 2008
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
The L/C No. in the B/L was mistyped as AN instead of the correct 4N stated in
the credit.
The issuing bank also mistyped the L/C No. as 4A instead of 4N in their
discrepancy notice to the negotiating bank. It shows to the issuing bank how easy it
is to mistype one letter in a long L/C No.
Is this is a discrepancy which would justify the issuing bank from refusing
payment?
ANALYSIS
CONCLUSION
The misquoting of the credit number on the bill of lading does not create a
reason for refusal.
The fact that a refusal is sent to a nominated bank or a beneficiary and they
provide a replacement or corrected document does not, in itself, signify their
acceptance of the discrepancy.
The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
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Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Document 470/1110rev final
Department of Policy and Business Practices
3 November 2008
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
We, at the request of the beneficiary, would like to seek ICCs opinion in
relation to the following case:
BACKGROUND
CIRCUMSTANCES
Bank I issued several L/Cs amounting to about USD500,000.00 each, with the
following terms:
All banking charges except L/C opening charges are for beneficiarys account
No other reference to bank charges was made except for the above.
We, acting as presenting bank, presented the documents to Bank I for payment,
as requested by the beneficiary. When we received the payment, there were some
We understand from ICC opinion R380-1998/99 that the issuing bank should
clearly indicate the amount or percentage of charges that they wish to make even if
the L/C stipulates that all charges outside the country of the issuing bank are for
beneficiarys account and to be deducted from the proceeds. As such, we have sent a
SWIFT message to the bank drawing its attention to the opinion. However, Bank I
still refuses to refund the charges to the beneficiary with their reasons as below:
QUOTE
We would like to point out that your assertion seems not the case. The term in
our L/C is all banking charges except L/C opening charges are for beneficiarys
account, whereas the ICC opinion R380 you quoted is about cases when L/C is
stipulated all charges outside issuing banks counter are for beneficiarys account.
It is very different with the stipulations of our L/Cs. We totally agree with you that if
a L/C is stipulated as the latter and not mentioned otherwise somewhere else on said
L/C, it is not proper for an issuing bank to charge beneficiary any charges incurred in
their own bank upon payment.
It is therefore, we regret to inform you that we have to turn down your request
and close our file at our end.
UNQUOTE
ANALYSIS
The credit stated that all banking charges except L/C opening charges were for
the beneficiarys account. This would mean that the applicant was only responsible
for the fees associated with the issuance of the credit. The beneficiary would be
responsible for any other fees incurred by the issuing bank including amendment
and costs associated with the examination of documents together with the fees
incurred in the country of the beneficiary.
Where one or more charges of the issuing bank are to be paid by the beneficiary,
the credit should clearly indicate the amount or percentage amount that will be
deducted in order that the beneficiary and any nominated bank are aware of the level
of deductions to be made from the proceeds of a complying presentation.
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CONCLUSION
The credit stated that all banking charges except those related to the opening
were for the account of the beneficiary. If the issuing bank wishes to make a
deduction from the proceeds in respect of their fees, then the credit should clearly
indicate the amount or percentage of charges that will be deducted. It will then be
for the beneficiary to decide whether it will perform under the credit with such a
charge for its account.
The opinion(s) rendered on this query reflect the opinion of the ICC Banking
Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Document 470/1110rev final
Department of Policy and Business Practices
3 November 2008
Thank you for your query regarding UCP 500. Please find below the opinion of
the Banking Commission.
QUOTE
The issuing bank has refused to effect payment and claims that it has been
unable to obtain the applicant's acceptance of the documents.
In its refusal of the documents the issuing bank gave as the reason:
In other documents presented under the credit the weights are stated
correctly as:
In our view this mistake is not a discrepancy which should warrant a refusal of
payment as it is obvious that this is a simple mistake which cannot cause any
confusion. We believe the mistake should be treated like a simple misspelling or
typing error as described in paragraph 28 of ICC Publication no. 645.
ANALYSIS
You indicate that you consider the transposing of the weights as being a
typographical error as described in paragraph 28 of the International Standard
Banking Practice, ICC publication no. 645. The paragraph in question refers to
misspellings or typing errors that do not affect the meaning of a word or sentence in
which it occurs. Clearly, weights that differ between documents will create an
inconsistency as referred to in sub-article 13 (a). Whilst paragraph 28 will help serve
in determining compliance in a number of transactions, it should be noted that it will
not cover every circumstance. Also, it is not possible to have a net weight that is
greater than the gross weight of the same goods.
CONCLUSION
The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
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Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Department of Policy and Business Practices
3 Novemer 2008
Thank you for your query regarding UCP 600 received from one of your
members. Please find below the opinion of the Banking Commission.
QUOTE
Question no: 2: If a draft is drawn on the issuing bank, can a nominated bank
accept such draft?
Question 1.
If the credit is available with any bank by acceptance, the credit should state that
the draft is to be drawn on the nominated bank. The nominated bank will be the
bank that agrees to act upon the nomination, at the request of the beneficiary, and
on whom the draft is to be drawn and their name is to be specifically stated on the
draft as the drawee.
Question 2.
If a draft is drawn on the issuing bank, it is for the issuing bank to accept the
draft. If the draft is drawn on the issuing bank, the credit should be available with the
nominated bank by negotiation and not acceptance.
The opinion(s) rendered on this query reflect the opinion of the ICC Banking
Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
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Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Department of Policy and Business Practices
3 November 2008
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
Article 22 of UCP 600 begins with the wording A bill of lading, however named,
containing an indication that it is subject to a charter party (charter party bill of
lading)
must appear to. [emphasis added]
1. A credit calls for a marine bill of lading and the document presented appears
to comply with the requirements of the credit and article 20 of UCP 600 except that
the document contains pre-printed wording Issued pursuant to charter party
dated. without specifying any date in the blank space. The document also
contains the terms and conditions of carriage that we see on a normal bill of lading,
on the reverse of the document and was titled Bill of Lading. Should this document
be treated as a charter party bill of lading?
2. A credit calls for a marine bill of lading and the document presented appears
to comply with the requirements of the credit and article 20 of UCP 600 except the
document contains a stamp Freight payable as per charter party. The document
also contains the terms and conditions of carriage that we see on a normal bill of
lading, on the reverse of the document. Should this document be treated as a charter
party bill of lading?
3. The document contains the title Charter Party Bill of Lading and there is no
other reference to charter party on the bill of lading. The document otherwise
complies with the requirements of the credit and article 20 of UCP 600 and also
contains the terms and conditions of carriage that we see on a normal bill of lading
on the reverse of the document for a marine bill of lading. Should this document be
treated as a charter party bill of lading? If so, what meaning can be attributed to the
words however named in article 22?
All 3 documents were signed by an agent as agent for the named carrier.
Chamber of Commerce l ICC Malaysia
My comments, for your information, are as follows:
ANALYSIS
In addition to the wording that appears in sub-article 22 (a) and shown at the
beginning of this query, sub-article 20 (a) (vi) states, in relation to bills of lading,
contain no indication that it is subject to a charter party.
CONCLUSION
2. Although the content of the bill of lading complies with the requirements of
article 20, the inclusion of freight payable as per charter party is an indication that
the bill of lading was issued subject to a charter party. This document would be
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considered to be a charter party bill of lading for the purposes of examination under
UCP.
3. The document is titled Charter Party Bill of Lading. For the purposes of sub-
article 20 (a) (vi) and 22 (a), this represents an indication that it is subject to a
charter party.
The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Department of Policy and Business Practices
ICC Turkey
Atatrk Bulvari N 149
06640 Bakanliklar-Ankara
Turkey
3 November 2008
Dear Sirs,
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
The presented certificate includes the statement reading Applicant states that
this is from the crop year 2007. The issuing bank treats the document as discrepant
for the reason that the statement in question must be that of the issuer, i.e., all issues
of certification of findings must come from the party who issues the respective
certificate.
Since the nominated bank has contested the issue we shall appreciate your
opinion.
An inspection certificate that otherwise complies with the terms and conditions
of the credit and sub-article 14 (f) would be acceptable bearing the statement
indicated above.
The opinion(s) rendered on this query reflect the opinion of the ICC Banking
Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Department of Policy and Business Practices
ICC Turkey
Atatrk Bulvari N 149
06640 Bakanliklar-Ankara
Turkey
3 November 2008
Dear Sirs,
Thank you for your query regarding UCP 600 & ISBP. Please find below the
opinion of the Banking Commission.
QUOTE
One of the special conditions of the credit stated All corrections must be
authenticated by the issuer of the respective document.
Since we, as the nominated bank received contestations from the issuing bank on the
following issues we shall appreciate your opinion as to whether these contestations
were justified. UCPs signing requirements were satisfied.
The credit called for an invoice legalized by the chamber of commerce. The
presented invoice showed some corrections bearing authentication by the
chamber of commerce. Relying on ISBP paragraph 9 we accepted the
document as complying, but the issuing bank stated that the corrections
should have been authenticated by the beneficiary since the special condition
overruled ISBP paragraph 9.
The B/L showed a correction authenticated by the agent of the carrier who
signed the document. But the issuing bank stated that the correction should
have been authenticated by the carrier whose name appears at the heading,
because the issuer of the document was the carrier, not the agent.
Similar to the case with the B/L, as above, the issuing bank stated that the
correction on the insurance policy should have been authenticated by the
insurance company whose name appears at the heading, not by the agent
who signed it since the issuer was the insurance company.
ANALYSIS
The context in which All corrections must be authenticated by the issuer of the
respective document is written, should be understood to apply to the entity that
issued, or completed and signed the document. It therefore follows that the issuer
(as referred to in the special condition) may or may not be the entity that is named in
the heading of the document. It could be the company or person that is completing
and signing the document on behalf of the named entity.
For bills of lading and insurance documents it is common practice that they be
completed and signed by the agent of the carrier or agent of the insurance company.
It should be noted that the paragraphs of ISBP apply to the extent that the credit
does not modify or exclude their application.
CONCLUSION
Invoice the special condition would require the beneficiary and the Chamber
of Commerce to authenticate any correction or alteration. This is in addition to the
requirements expressed in ISBP paragraph 9.
Bill of lading the special condition would allow for the correction or alteration
to be completed by the named carrier or the entity that completed and signed the
bill of lading on behalf of the carrier i.e., their agent.
Insurance policy - the special condition would allow for the correction or
alteration to be completed by the named insurance company or the entity that
completed and signed the insurance policy on behalf of the insurance company i.e.,
their agent (or proxy).
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The opinion(s) rendered on this query reflect the opinion of the ICC Banking
Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Department of Policy and Business Practices
ICC Turkey
Atatrk Bulvari N 149
06640 Bakanliklar-Ankara
Turkey
3 November 2008
Dear Sirs,
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
In cases where the B/L contains pre-printed wording reading Shipped on board
in apparent good order and condition for carriage to the port of discharge ...........
with the fields for the name of the vessel and port of loading completed in
accordance with the credit terms, with a place of receipt not mentioned in the credit
and without any detail of a pre-carriage, we have observed that the above-mentioned
statement in the Commentary is interpreted by document checkers differently as
follows:
ANALYSIS
Sub-article 20 (a) (ii) includes the following indicate that the goods have been
shipped on board a named vessel at the port of loading stated in the credit by: ..
Although the wording that appeared in UCP 500 sub-article 23 (a) (ii) i.e.,
regarding the need for an on board notation including the port of loading and name
of the vessel on which the goods had been loaded, where the bill of lading indicated
a place of receipt or taking in charge different from the port of loading - has not been
incorporated into article 20, the requirements for such an on board notation remain
unchanged under UCP 600.
The issues in this query have already been addressed in ICC Opinion TA.635rev
(query 3) which was approved at the October 2007 meeting of the Banking
Commission. The conclusion given in that opinion included:
A bill of lading is a generic term for a transport document that includes, but is
not necessarily limited to, transport by sea from a port of loading to a port of
discharge. It is recognized, however, that there will still be occasions when the
shipping company or its agent will include reference to a place of receipt or taking
in charge that is different from the port of loading. To cover this eventuality, the
content of sub-article 20 (a) (ii) reads: indicate that the goods have been shipped
on board a named vessel at the port of loading stated in the credit by:. The
emphasis in this condition is that the document checker must be able to determine
that the bill of lading appears to indicate that the shipped on board statement (pre-
printed wording or by a separate notation) relates to loading on board the named
vessel at the port of loading stated in the credit and not to any pre-carriage of the
goods between a place of receipt or taking in charge and the port of loading.
Unless it is evident from the bill of lading that the shipped on board statement
applies to the vessel and the port of loading, the bill of lading will require an on
board notation showing the port of loading and the name of the vessel, even if the
goods are loaded on the vessel named in the bill of lading.
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When a place of receipt or taking in charge is the same as the port of loading
e.g., place of receipt Hong Kong CY and port of loading Hong Kong and the bill of
lading does not evidence any means of pre-carriage i.e., only shows the name of the
vessel, they are to be deemed one and the same place and therefore an on board
notation, as described above, will not be required.
CONCLUSION
If there is a place of receipt shown on the bill of lading and it is different from
the port of loading stated in the credit, then (b) will apply to the extent that it is not
evident from the bill of lading that the shipped on board statement applies to the
named vessel and the port of loading stated in the credit. The requirements of sub-
article 20 (a) (ii) are not conditioned on both the pre-carriage and place of receipt
fields being completed on the bill of lading.
If the place of receipt is the same as that of the port of loading stated in the
credit, then any on board notation need only be dated.
The opinion(s) rendered on this query reflect the opinion of the ICC Banking
Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Document 470/1110rev final
Department of Policy and Business Practices
ICC Turkey
Atatrk Bulvari N 149
06640 Bakanliklar-Ankara
Turkey
3 November 2008
Dear Sirs,
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
We refer to the approved ICC Opinion TA.650rev which states in its conclusion
that a dated on board notation is required when a MMTD evidences the first leg of
the carriage as a sea shipment from the port stated in the credit, i.e. there is a need
for evidence of the date the goods were shipped on board by means of pre-printed
wording or an added notation.
Case A:
Pre-printed wording :
Taken in charge in apparently good condition herein at the place of receipt for
transport and delivery as mentioned above, unless otherwise stated. The
MTO/Carrier in accordance with the provisions contained in the MTD undertakes to
perform or to procure the performance of the multimodal transport from the place
at which the goods are taken in charge, to the place designated for delivery and
assumes responsibility for such transport.
....... (Surrender clause) ............
Pre-printed wording:
Taken in charge in apparent good order and condition, unless otherwise noted
herein, at the place of receipt for transport and delivery as mentioned above. .....
(Surrender clause).........
Pre-printed wording:
Taken in charge in apparent good order and condition, unless otherwise noted
herein, at the place of receipt for transport and delivery as mentioned above. .....
(Surrender clause).........
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Case D:
Pre-printed wording :
Received in apparent good order and condition except as otherwise noted the
total number of containers or other packages or units enumerated below for
transportation from the place of receipt or port of loading whichever applicable to
the place of delivery or port of discharge whichever applicable subject to terms
hereof. ........... (Surrender clause) ..................
ANALYSIS
In all the cases that have been quoted, the credit required shipment from a port
to an inland destination. The conclusion to ICC Opinion TA.650rev included A
dated on board notation is clearly required when the credit so requests. It is also
required when the document evidences the first leg of the carriage as a sea shipment
from the place stated in the credit.
To this extent, sub-article 19 (a) (ii) includes indicate that the goods have been
dispatched, taken in charge or shipped on board at the place stated in the credit
thereby providing the various options depending on the type of transport document
presented.
The query refers to different forms of transport documents but the same
conclusion will apply notwithstanding the type or title of document presented.
CONCLUSION
Case A.
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Case B.
The transport document requires a dated on board notation showing the name
of the vessel that sailed from X Port and port of loading X Port.
Case C.
Case D.
The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Department of Policy and Business Practices
21 August 2008
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
A documentary credit issued subject to UCP 600 calls for a bill of lading showing
shipment from Hamburg Port to Hong Kong Port.
Place of Receipt:
Hannover by truck
Ocean Vessel: Port of Loading:
Vessel XX Hamburg
Port of Discharge: Place of Delivery:
Hong Kong
The bill of lading did not include a separate on board notation but did include
pre-printed wording indicating that goods are shipped on board as well as a date
of issue.
Kindly advise if the above is in compliance with UCP 600 sub-article 20 (a) (ii)
and (iii)
ANALYSIS
Sub-article 20 (a) (ii) includes indicate that the goods have been shipped on
board a named vessel at the port of loading stated in the credit by:. and sub-article
20 (a) (iii) includes indicate shipment from the port of loading to the port of
discharge stated in the credit.
Although the wording that appeared in UCP 500 sub-article 23 (a) (ii) i.e.,
regarding the need for an on board notation including the port of loading and name
of the vessel on which the goods had been loaded, where the bill of lading indicated
a place of receipt or taking in charge different from the port of loading - has not been
incorporated into article 20, the requirements for such an on board notation remain
unchanged under UCP 600.
The issues in this query have already been addressed in ICC Opinion TA.635rev
(query 3) which was approved at the October 2007 meeting of the Banking
Commission. The conclusion given in that opinion included:
A bill of lading is a generic term for a transport document that includes, but is
not necessarily limited to, transport by sea from a port of loading to a port of
discharge. It is recognized, however, that there will still be occasions when the
shipping company or its agent will include reference to a place of receipt or taking
in charge that is different from the port of loading. To cover this eventuality, the
content of sub-article 20 (a) (ii) reads: indicate that the goods have been shipped
on board a named vessel at the port of loading stated in the credit by:. The
emphasis in this condition is that the document checker must be able to determine
that the bill of lading appears to indicate that the shipped on board statement (pre-
printed wording or by a separate notation) relates to loading on board the named
vessel at the port of loading stated in the credit and not to any pre-carriage of the
goods between a place of receipt or taking in charge and the port of loading.
Unless it is evident from the bill of lading that the shipped on board statement
applies to the vessel and the port of loading, the bill of lading will require an on
board notation showing the port of loading and the name of the vessel, even if the
goods are loaded on the vessel named in the bill of lading.
CONCLUSION
The bill of lading will be discrepant unless it is evident that the shipped on
board statement applies to the named vessel and the port of loading stated in the
credit.
The opinion(s) rendered on this query reflect the opinion of the ICC Banking
Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
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Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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Department of Policy and Business Practices
3 November 2008
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
After presenting the documents to the issuing bank, the nominated bank
received a notice of refusal from the issuing bank indicating the following
discrepancy: The presented courier receipt was not signed.
The courier receipt was not signed. It did however include a barcode, and there
was no signature space included on the document.
ANALYSIS
CONCLUSION
The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
38
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Department of Policy and Business Practices
3 November 2008
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
ICC Opinion TA.572 Issue No. 1 (October 2004) describes the situation where
the documentary credit states that Transport document issued by Freight Forwarder
not acceptable.
The conclusion of the opinion was that ..the bank would be obliged to accept a
bill of lading that was signed as carrier irrespective of any knowledge they may have
as to the capacity of the issuer i.e., even where the transport document was titled
FBL BIFA Negotiable FIATA Multimodal Transport Bill of Lading.
a. The above opinion was given subject to UCP 500, and we ask you kindly to
inform us if the same position would apply under UCP 600.
b. Also kindly advise if the conclusion above would be the same had the
documentary credit stated that House bill of lading not acceptable or
similar.
ANALYSIS
One of the reasons behind conditions such as freight forwarder bills of lading
are not acceptable or house bills of lading not acceptable is to require the
issuance of a bill of lading by the carrier, albeit that the freight forwarder or agent
could sign the bill of lading according to the requirements expressed in sub-article
20 (a) (i). If a freight forwarder or agent signs as carrier, the bill of lading becomes a
carrier document.
CONCLUSION
(b) If the credit states house bill of lading not acceptable or similar, the same
position will apply.
The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
40
Document 470/1110rev final
Department of Policy and Business Practices
3 November 2008
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
Would a Vessel Certificate issued by either the carrier or the agent for the
carrier be acceptable? i.e., a party that appears on the bill of lading (part of the
same presentation) but not specifically identified in the documents as Shipping
Company or Agent for the Shipping Company?
Yes. A vessel certificate issued by the carrier indicated on the bill of lading, or an
agent signing on their behalf, would comply.
The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
42
Document 470/1110rev final
Department of Policy and Business Practices
3 November 2008
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
One of the members of ICC Sweden has submitted the following query (as
negotiating and confirming bank) regarding the interpretation of the terms of the
letter of credit.
and
Field 47A: additional conditions point 9) Shipment of the quantity of this L/C is to be
effected in two lots.
First shipment for 1.629,138 cbm was shipped on March 19, 2008.
Documents were sent on April 8, 2008 and the documents were accepted.
Second shipment for 720,070 cbm was shipped on April 10, 2008.
Documents were sent on April 24, 2008 and the documents were accepted.
Final shipment for 217,473 cbm was shipped on May 14, 2008.
Documents were sent on May 30, 2008. The documents were refused by the issuing
bank on June 3, 2008, due to shipment in three lots.
In a message on June 4, 2008 to the issuing bank, the confirming bank argued
that since the credit was amended under Field 43P and Field 47A point no. 9, part
shipments are allowed.
On June 5, 2008 the issuing bank reverts, and states that the documents are
discrepant and that their amendment does not mean acceptance of more than two
lots as the description of the goods read total quantity to read 3 385 cbm and whole
quantity is to be shipped in two lots without mentioning the quantity of each lot of
the two shipments.
The confirming bank would like to have your opinion on whether it is correct
for the issuing bank to maintain its position and that the mentioning of two lots in
the goods description in fact overrules the information given in Field 43P and
emphasised by the deletion of the additional conditions mentioned in Field 47A
point no. 9; shipment of the quantity of this credit is to be effected in two lots.
ANALYSIS
Sub-article 31 (a) provides the rule for partial drawings or shipments they are
allowed.
Article 1 states that the rules of UCP 600 are binding on all parties thereto unless
expressly modified or excluded by the credit.
If partial shipments are to be allowed, the credit could remain silent on this
issue and the rule in sub-article 31 (a) will automatically apply. A credit stating that
partial shipments are allowed permits any number of shipments to be made. For the
credit in question, the issuing bank has modified the rule by the reference to
shipment in two lots. The credit, as issued, required two shipments of an equal
quantity of goods.
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By an amendment, the reference to in two lots was deleted from field 43P and
field 47A clause 9. However, field 45A still required shipment to be effected in two
lots but without the restriction that shipments of an equal quantity be made.
Qualification as to the number of shipments to be made can be stated anywhere on
the credit and not just in field 43P or 47A.
In effect, the second drawing was discrepant for the reason that the balance of
the goods was not shipped at that time. The query reflects that the documents were
accepted. It is not clear whether the acceptance was by waiver of the applicant to the
discrepancy that not all the goods had been shipped or error on the part of the
issuing bank in not observing the discrepancy.
CONCLUSION
The issuing bank was entitled to refuse the documents presented as a third
drawing.
The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
45
Document 470/1110rev final
Department of Policy and Business Practices
M. Burger-Scheidlin
ICC Austria - International Chamber of
Commerce
Wiedner Hauptstrasse 73
1040 Vienna,
Austria
3 November 2008
Thank you for your query regarding UCP 600. Please find below the opinion of
the Banking Commission.
QUOTE
Query
Kind of transaction: Irrevocable confirmed, deferred payment letter
of credit (LC)
Issuing bank: IB
Nominated confirming bank: CB
Applicant: Subsidiary of a Multinational
Beneficiary: Trader
Payment terms: Available by 90 days deferred payment at the counters of
CB
Confirmation instructions: CONFIRM
Underlying transaction: Delivery of Steel
LC subject to: UCP600
Message 1:
Please be informed that as per court order payment of this credit has been
stopped.
Message 2:
According to the order dated May 14, 2008 issued by the Court of First
Instance in the preliminary cautionary measures the planned payment is
stopped.
These messages were followed by a telefax copy of the court order and a SWIFT
request to inform IB whether CB has already (pre)paid to the beneficiary, which was
confirmed by CB.
1. The Court Order dd. May 14, 2008 of the Court of First Instance is
addressed to your bank, in order to proceed with the suspension of
payment according to the instructions of applicant of lc.
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As a matter of fact we, CB are the owner of the receivables and entitled to
receive the counter-value without any further delay.
Applicants reason for obtaining court order was due to quality claims.
Beneficiarys offer to reduce the purchase price was waived. The applicant wanted to
unwind the whole transaction. By the way, the steel prices were rising during the
period from concluding the contract/fixing the purchase price and maturity date.
It is the opinion of the Austrian banks that a pre-paying nominated bank has an
independent reimbursement claim against the issuing bank in accordance with sub-
article 7 (c) of UCP 600 as a consequence of the authorization given to the
nominated bank under sub-article 12 (b) of UCP 600. Therefore the issuing bank will
be obliged to honour the nominated bank's reimbursement claim immediately upon
maturity, even if a court order issued against the issuing bank prohibits payment to
the beneficiary under the letter of credit/payment under the letter of
credit/recovering of funds from applicant.
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Have any of the member banks already faced such a problem since the
implementation of UCP 600 (which puts special emphasis on implementing clauses
governing prepayment with respect to purchase of deferred payment undertakings
incurred)?
ANALYSIS
The confirming bank determined that the documents complied, based upon
their examination according to the requirements of sub-article 14 (a). It should be
noted that whilst the court order forbid the issuing bank from making payment to
the beneficiary, payment had already been made and it was the reimbursement from
the issuing bank that was due to the confirming bank.
Clearly, an issuing bank cannot ignore a court injunction and their defence for not
reimbursing will be based upon the terms of the injunction. However, the basis for
the injunction being issued seems to be related to the quality of the goods and
therefore a nominated bank that acted in good faith should be protected. Such issues
should not affect the right of the nominated bank to receive reimbursement from the
issuing bank. In this respect reference should also be made to UCP 600 articles
4 and 5.
CONCLUSION
The general principle, as stated in the conclusion to ICC Opinion R.519, is that
local law will prevail over the transaction.
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However, the credit was subject to UCP 600 and apparently contained no
exclusion to the rule appearing in sub-article 12 (b). Due to the content of sub-article
12 (b) and sub-article 7 (c), the issuing bank should seek to resist such an injunction
in order to preserve the integrity of its credit and the UCP. It must be expected that
the issuing bank will seek to have the injunction removed by referring the court to
the appropriate articles of UCP 600 and the terms and conditions of the credit. The
issuing bank would also be well advised to inform their applicant(s) of the content
and effect of sub-article 12 (b) for this and any future transactions. It is the
responsibility of the applicant to cover any issues of quality of goods in the
documents called for and the data content required to appear on those documents
and not to seek redress that affects the right of a nominated bank to receive
reimbursement in respect of a complying presentation.
We cannot comment with regard to any other member banks, but at the time of
issuance of this opinion no similar issues had been raised with the Banking
Commission.
The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under QUOTE above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.
Neither the ICC nor any of its employees, nor any member of the Banking
Commission, including the Chairman, Vice-Chairmen or Technical Adviser
shall be liable to any person for any loss or damage arising out of any act or
omission in connection with the rendered opinion(s).
Yours sincerely,
Thierry Senechal
Policy Manager
Banking Commission
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