The First ICC Meeting

At a meeting on 20 October 1926, the Council of the International Chamber of Commerce, at the suggestion of Wilbert Ward, referred the development of regulations on Export Commercial Credits to the Committee on Bills of Exchange and Cheques chaired by Mr Westerman, Vice President of ICC. Mr Ward proposed “that the International Chamber of Commerce could render a practical service to international trade by seeking to obtain international uniformity ... and eliminate many difficulties between bankers and business men” by adopting uniform regulations on export commercial credits. 1Mr Westerman requested that the Committee on Bills of Exchange and Cheques review this issue and added Wilbert Ward, National City Bank of New York, New York, M. Froideval, Director adjoint du Comptoir National d’Escompte, Paris and Jean Gurtler, National City Bank of New York, Paris to the current membership of the Committee. The membership of the Committee on Bills of Exchange and Cheques was listed in Brochure No. 47.2

It should be noted that attending the ICC meetings in the 1920s was quite a task. According to Henry Harfield, Wilbert Ward told him that each trip to Europe for a meeting took about two weeks to get there by ocean vessel, the meetings usually lasted about a week and then it took two weeks to return. To attend each meeting, therefore, required Mr Ward to be away from the bank for five weeks. It was during these trips that he wrote his original book Bank Credits and Acceptances published in 1931.3To put this in perspective, the first transatlantic telephone call was not made until January 1927, and the first transatlantic flight from New York to Paris by Charles Lindbergh took place in May 1927. Wilbert Ward’s first trip to attend an ICC meeting occurred in October 1926.

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The Second ICC Meeting – First Draft

The Committee on Bills of Exchange and Cheques met on 7 and 8 February 1927 and reviewed a draft of what was then titled the Uniform Regulations on Export Commercial Credits, which was prepared by the Committee based on practices contained in rules already existing in Argentina, Czechoslovakia, France, Germany, Italy, Sweden and the United States (RAECC). The record of the meeting states: “At its meeting on February 7th and 8th, 1927 the Committee considered draft uniform regulations for export commercial credits prepared by the experts on the basis of the practice already obtaining in the abovementioned countries. This draft dealt with the various kinds of credits and the undertakings they imply, with the responsibilities which banks decline to assume, with documents which the banks accept (bills of lading, insurance policies, underwriters’ certificates and invoices, etc.) and with the meaning of certain banking terms and the definitions of certain banking customs.” After an article-by-article discussion of the draft, the Committee requested the Secretary General to send the draft to ICC national committees for their opinions. The draft was sent out with a detailed table showing the regulations already adopted in various countries, prepared by Jean Gurtler of National City Bank of New York’s Paris office.4

Third ICC Meeting – Review of Comments

The Committee on Bills of Exchange and Cheques met again on 27 April 1927 to consider replies from the following national committees: Belgian, Czechoslovakian, German, Hungarian, Indochinese, Swiss and US. Comments were also received from the Amsterdam Bankers Association. The Committee felt that the responses were not numerous enough to permit it to arrive at international uniformity. It requested that the draft be sent again to the national committees requesting comment and that the work of the committee be extended “until such time as it has carried its work to a logical conclusion”.

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Fourth Congress of ICC in Stockholm

At ICC’s Fourth Congress, held in Stockholm from 27 June to 2 July 1927, the Committee on Bills of Exchange and Cheques made its report on the “Standardization of Export Commercial Credits” and presented a draft of the Uniform Regulations on Export Commercial Credits. This draft was printed in ICC Brochure No. 48. The Committee reported that while they had received excellent comments on the draft, the replies from ICC national committees were not numerous enough to arrive at a “really international result”. They requested that the time for comment be extended to allow other national committees to present their views. The Committee on Bills of Exchange and Cheques formally requested the Congress to “extend its mission until such time as it has carried its work to a logical conclusion, that is, until draft Uniform Regulations on Export Commercial Credits ... have been finally prepared”. They also requested the Congress to appeal to all national committees to provide comments.

The application of the RAECC in the US (and later adherence to the UCP), and rules developed in other countries devoted only to export credits, had their reasons. In the days when countries had very limited laws covering letters of credit and rules were being formulated, it was believed that if banks complied with rules only for export credits, they would not run afoul of local laws in the country where examination of documents usually took place. By establishing rules for export credits, negotiating and confirming banks would always be assured of conforming to their national law and national rules established by banking practice.

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Draft Uniform Regulations on Export Commercial Credits – 1927

Presented to ICC’s Fourth Congress
Stockholm, Sweden June 27 – July 2, 1927

FORM OF CREDITS

Export Commercial Credits are essentially distinct from sales contracts on which they may be based, and to which the banks are entirely foreign.

Export Commercial Credits are either REVOCABLE, IRREVOCABLE or CONFIRMED IRREVOCABLE.

REVOCABLE CREDITS being only conditional authority to pay, negotiate or accept, no responsibility is assumed by the banks. Such credits may be modified or canceled at any moment without the bank being obliged to notify the beneficiary.

When authority of this nature has been given to a correspondent its modification or cancellation can take effect only upon receipt of notification by the said correspondent, or by the firm to which the latter has transferred the credit.

IRREVOCABLE CREDITS are definite undertakings by a bank in favor of the beneficiary. They can neither be modified nor canceled without the agreement of all concerned.

When banks opening irrevocable credits inform the beneficiary through a correspondent the intervention of the correspondent implies no responsibility on his part towards the beneficiary even if the correspondent’s own address appears in the credit as the place of payment.

CONFIRMED IRREVOCABLE CREDITS are a two-fold banking guarantee – that of the bank opening the credit, and that of the bank confirming the credit and making itself responsible for the undertaking given by the first bank. However, the undertaking of the confirming bank only runs from the date on which confirmation is given. Confirmed irrevocable credits can neither be modified nor canceled without the agreement of all concerned.

Banks will confirm credits to beneficiaries and guarantee the latter, only at the formal request of the bank opening the credit.

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In cases where the period for which confirmed irrevocable credits are to remain in force is not stated, the beneficiary will only be advised of the credit for information, and the credit will only be confirmed when the duration of validity has been specified, and this implies no responsibility on the part of the advising bank.

All credits are revocable unless otherwise expressly stated.

LIABILITY

Banks will examine all documents and papers with care sufficient to ascertain that on their face they appear to be regular in general form.

However:

  1. Banks assume no liability or responsibility for the form, sufficiency, correctness, genuineness or legal effect of any documents or papers, or for the description, quantity, weight, quality, condition, packing, delivery or value of the merchandise represented thereby, or for the general form of the documents, or for the good faith or acts of the consignor or any other person whomsoever, or for the solvency, standing, etc., of the carriers or insurers of the merchandise.
  2. Banks assume no liability or responsibility for the consequences arising out of delay and/or loss in transit of cables, letters and/or documents, or for delay, mutilation or other errors in the transmission of cables or telegrams, or for errors of translation or interpretation of technical terms, and banks reserve the right to transmit credit terms without translating them.
  3. Banks assume no liability or responsibility for consequences arising out of the interruption of their business either by government action or decree, or by strikes, lock-outs, riots, wars, causes beyond their control or acts of God. On credits maturing during such interruption of business the banks will be able to make no settlement after maturity except on specific instructions from the customer.
  4. Banks opening a credit abroad assume no liability or responsibility towards their customer, unless they themselves are at fault, should the instructions they transmit be carried out abroad otherwise than in accordance with the present regulations. The customer will be responsible to the banks for all obligations imposed upon the latter by foreign laws and customs.

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DOCUMENTS

When banks receive instructions to pay against documents – shipping documents, or words of similar import – without further specification they will be authorized to honor the following documents in negotiable and transferable form:

  • Full set of ocean bills of lading;
  • Policy or certificate of insurance;
  • Invoices.
    Or, in case of interior shipments:
  • River bills of lading, with policy or certificate of insurance;
  • Duplicate consignment note, or postal receipt;
  • Invoices.

Banks have the right to waive insurance papers if the beneficiary furnishes proof satisfactory to them, that the goods are insured by the consignee.

Bills of Lading

Unless otherwise instructed, banks will accept – when bills of lading are required – RECEIVED FOR SHIPMENT or ALONGSIDE Bills of Lading.

For shipments of cotton from the United States, banks are authorized to accept either bills of lading drawn under the Liverpool Convention; Port or Custody Bills of Lading.

Banks will accept ocean bills of lading permitting transshipment, outside the usual printed clauses, on condition that the entire voyage be effected under the responsibility of the signer of the bill of lading, unless the credit

Bills of lading showing goods are stowed “on deck” will be refused.

Forwarders’ bills of lading, railway receipt, duplicate consignment note, postal receipt in each case will be taken to be the date of shipment or dispatch.

When “On Board” shipment is required and such shipment is represented by an “On Board” Bill of Lading, the bill of lading date will be taken as the date when such shipment was effected; if evidenced by “On Board” endorsement, the endorsement date will be so taken.

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Bills of lading shall contain no notations qualifying the acceptance of merchandise in apparent good order and condition.

Insurance

Banks have the right to accept either insurance policies or underwriters’ insurance certificates, even when the credit stipulates the delivery of a policy.

The amount of insurance should be at least equal to the C.I.F. value of the goods, or to the amount of invoice if latter is higher.

In the absence of specifications as to risks to be covered, the banks will accept ordinary maritime insurance “special risks excepted”.

If insurance is required on overland shipments, banks will accept insurance of ordinary transportation risks.

When credits stipulate “insurance against all risks” banks will see that the documents are as complete as possible but cannot be held responsible if certain special risks are not covered.

Date of insurance documents must not be later than date of bills of lading or consignment notes.

Unless otherwise instructed, banks will demand insurance in the currency of the credit.

Invoices

Invoices must be in the currency of the credit, in the name of the buyer or other appointed person. If the invoice is not in the currency of the credit, the total must be converted into the currency of the credit by the seller.

In case of disparity between the credit and the shipping documents in the description of the goods, the banks will insist that the description appearing upon the invoices shall agree with that of the credit.

Other Documents

When other documents, such as consular invoices, certificates of origin, certificates of weight, of quality or of analysis are called for without further definition, the banks will accept such documents as presented.

As certificates of weight in case of railway carriage, the banks may refer to the notation of weight usually appearing upon railway receipts or upon duplicate consignment notes if officially stamped.

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INTERPRETATION OF TERMS

About or “Circa”

This term to be construed as allowing a variation not to exceed 10% more or less. When the merchandise by its nature does not allow the delivery of the exact quantity indicated a leeway of 3% more or less will be allowed.

Shipments

Unless otherwise instructed, banks will pay for partial shipments, even if their pro-forma value cannot be determined.

If shipment by instalments within given periods is specified, each instalment shall be treated as a separate transaction. The instalments not shipped at the given period cannot be added to subsequent shipments and are ipso facto canceled.

Banks will, however, continue to pay for subsequent shipments on condition that they are made at the given periods.

Validity

The period for which all credits, whether revocable, irrevocable or confirmed irrevocable, are to remain in force must be stipulated and this period should not coincide with the latest day for shipment, if such a date is specified.

The words “to”, “until”, “till” and words of similar import are understood to include the date mentioned.

When the last stipulated date for payment falls upon a Sunday or public holiday the payments shall be made on the next succeeding business day.

This does not apply to the last day for shipment which must be respected whatever the day of the week.

The period for which a revocable credit remains in force if no date is specified shall not exceed three months from the date of the notification sent to the beneficiary by the bank with which it is opened; and this bank will refuse payment after three months, unless its customer gives special instructions to the contrary.

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Loading

“Prompt”, “immediately”, “as soon as possible”, etc. These terms and others of similar import are to be interpreted as a request for shipment and presentation of documents within thirty days from the notification to the beneficiary, unless a date has been stipulated.

Presentation

When the date of shipment alone is specified in a credit the documents must be presented within a reasonable time. In the case of the credit payable on a certain date, the documents must be presented to the bank during the usual banking hours.

Prolongation

Any extension of the date of shipment shall extend for an equal length of time the date for presentation or negotiation of documents or drafts.

C.I.F.

When the credit is for goods sold C.I.F. the freight must be prepaid. However, when no price is indicated the banks have the right to refund the beneficiary, within the limits of the credit, cost of freight, insurance and other expenses on the strength of the invoice.

F.O.B.

When the credit is for goods sold F.O.B. the freight must be paid on arrival. When no price is indicated the banks have the right to pay all expenses within the limits of the credit up to loading on board vessel, on the strength of the invoice.

However, when a credit specifies C.I.F., F.O.B., etc. such notations shall not affect the form of shipping documents demanded.

Definition of Date Terms

The terms “first half ”, “last half ” of a month shall be construed as from the 1st to the 15th, and the 16th to the 30th/31st inclusive. The terms “beginning”, “middle” or “end” of month shall be construed as from the 1st to the 10th, the 11th to the 20th and the 21st to the 30th/31st of each month.

When a credit bears “good for one month, six months”, etc., and the customer has not specified the date from which the credit is to run, the credit shall run from the date on which the correspondent sends the notification to the beneficiary.

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TRANSFERS

A credit can only be transferred on the express authority of the customer. In this case the credit can be transferred only once, and on the terms and conditions specified in the original credit, including duration of validity.

When a credit may be transferred to another place, or its terms and conditions changed on the order of the beneficiary, the customer must so specify clearly and state who is to pay the bank charges entailed.

In the case of a transfer to another town, payment may be made at the place to which the credit has been transferred.

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1929 Amsterdam Meeting – Committee on Bills of Exchange, Cheques and Commercial Documentary Credits

In 1929, the Committee on Bills of Exchange and Cheques, now renamed the Committee on Bills of Exchange, Cheques and Commercial Documentary Credits, met in Amsterdam. At that meeting they considered all comments received from ICC national committees. The result of the consideration was a draft of what they entitled Uniform Regulations for Commercial Documentary Credits. This is the last known discussion of drafts of rules regulations by ICC prior to the publication of the first rules in 1933. According to ICC’s records, it seems that during the occupation of Paris by the German army during World War II, many records of ICC were taken home by employees in an attempt to keep them from being destroyed. Unfortunately, many were never returned to the ICC headquarters. Evidently the records from 1929 to 1933 were among those that were not returned.

The wording of ICC’s draft Uniform Regulations for Commercial Documentary Credits is such that it is impossible to obtain verification of the origin of these international rules. It appears, however, that the RAECC 1926 version was an influential model. One must also assume that other sections or language were taken from other national rules, including those developed by the Copenhagen banks. However, since these rules are not available for comparing, only a comparison with the US’s RAECC and the Copenhagen Regulations is possible. While these international regulations were discussed a number of times at meetings of the Committee on Foreign Banking,5 no one knows exactly what happened to the Uniform Regulations for Commercial Documentary Credits. In March of 1931, the US banks were, according to records of their meetings, continuing to discuss the draft Regulations and their objections at meetings.

On 22 September 1932, the Committee on Foreign Banking formed a committee to review the RAECC once more. As part of this committee’s effort, a copy of the RAECC was sent to ICC stating that the RAECC accurately reflected US practice and they should be used as a model for the development of international rules. On 30 March 1933, the final draft of the revised RAECC was sent to the members of the Committee on Foreign Banking for a vote which was, after much discussion, approved and became effective on 15 March 1934.

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Uniform Regulations for Commercial Documentary Credits
1929 Draft

A. FORM OF CREDITS

  1. Commercial Documentary Credits are essentially distinct transactions from sales contracts on which they may be based and with which banks are not concerned.
  2. Commercial Documentary Credits may be either:
    (a) Revocable.
    (b) Irrevocable.
  3. All credits, unless clearly stipulated as irrevocable, are considered revocable, even if a term of validity is indicated in the clause “unless revoked”.
  4. Revocable credits are not legally binding undertakings between bank and beneficiary. Such credits may be modified or cancelled at any moment without the bank being obliged to notify the beneficiary. When a credit of this nature has been given to a correspondent, its modification or cancellation can take effect only upon receipt of notification by the said correspondent or by the firm to which the latter has transferred the credit.
  5. Irrevocable credits are definite undertakings by a bank in favour of the beneficiary. They can neither be modified nor cancelled without the agreement of all concerned.
  6. Irrevocable credits may be notified to the beneficiary through an advising bank without responsibility on the latter’s part when it has merely been asked to notify the beneficiary.
  7. However an advising bank may be called upon by the issuing bank to confirm an irrevocable credit. In this case, the advising bank makes itself responsible for the undertaking given by the issuing bank as from the date on which it gives confirmation.
  8. If in connection with such credits the period of validity is not stipulated, the beneficiary will only be advised of the credit for information, and the credit will only be confirmed when the duration of validity has been specified, and this implies no responsibility on the part of the advising bank.

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  1. When an irrevocable credit is opened in the form of a letter of credit, such letter of credit entails its notification and an undertaking by the issuing bank towards beneficiaries and holders in good faith to honour all drafts issued by virtue of and in conformity with the clauses and conditions contained in the document. The document itself may be transmitted or the issuance thereof notified by an advising bank without the latter becoming responsible.

B. LIABILITY

  1. Banks shall examine all documents and papers with care sufficient to ascertain that on their face they appear to be in regular form.
  2. However banks assume no liability or responsibility for the form, sufficiency, correctness, genuineness or legal effect of any documents or papers, or for the description, quantity, weight, quality, condition, packing, delivery or value of goods represented thereby or for the general conditions stipulated in the documents, or for the good faith or acts of the consignor or any other person whomsoever, or for the solvency, standing, etc. of the carriers or insurers of the goods.
  3. Banks assume no liability or responsibility for the consequences arising out of delay and/or loss in transit of cables, letters and/or documents, or for delay, mutilation or other errors in the transmission of cables or telegrams, or for errors of translation or interpretation of technical terms, and banks reserve the right to transmit credit terms without translating them.
  4. Banks assume no liability or responsibility for consequences arising out of the interruption of their business either by a decision of a public authority, or by strikes, lock-outs, riots, wars, causes beyond their control, or acts of God. On credits expiring during such interruption of business, the banks will be able to make no settlement af ter maturity except on specific instructions from the customer.
  5. Banks opening a credit abroad assume no liability or responsibility towards their customer, unless they themselves are at fault, should the instructions they transmit be carried out abroad otherwise than in accordance with the present regulations. The customer is responsible to the banks for all obligations imposed upon the latter by foreign laws and customs.

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C. DOCUMENTS

  1. When banks receive instructions to pay against documents, shipping documents, or words of similar import without further specification, they shall consider themselves authorized to honour the following documents in negotiable and transferable form, in particular:
  • Full set of ocean bills of lading,
  • Policy or certificate of insurance,
  • Invoice,

    or in case of inland shipments:
  • Bills of lading or other similar documents such as, counterfoil waybill or postal receipt, or railway consignment note, etc.,
  • Policy or certificate of insurance,
  • Invoice.

Banks have the right to waive insurance papers if the beneficiary furnishes proof satisfactory to them, that the goods are insured by the consignee.

Unless otherwise instr ucted the Banks will interpret the undermentioned terms contained in commercial credits as follows.

  1. Bills of Lading.
    Banks may accept when bills of lading are required “received for shipment” or “alongside” bills of lading.
  2. For shipments of cotton from the United States, banks are authorized to accept bills of lading drawn under the Liverpool Convention, that is to say “Port-” or “Custody Bills of Lading.”
  3. Banks will also accept ocean bills of lading permitting transhipment, outside the usual printed clause, on condition that the entire voyage be effected under one and the same bill of lading, unless the credit specifies direct shipment. In any case, when a bill of lading for shipment by steamer is requested, banks may consider themselves authorized to accept bills of lading for shipment by motor vessel.

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  1. Through Bills of Lading issued by official agents of steamship companies may be accepted, but bills of lading issued by forwarders will be refused, as also bills of lading for shipment by sailing vessels.
  2. The date of the bill of lading, railway receipt, counterfoil waybill, postal receipt in each case will be taken as evidence of shipment or dispatch.
  3. When “On Board” shipment is required and such shipment is represented by an “On Board” Bill of Lading, the bill of lading date will be taken as evidence that goods have been shipped on or before that date. If evidenced by “On Board” endorsement, the endorsement date will be so taken.
  4. Shipping documents bearing reservations as to the apparent good order and condition of merchandise shall be refused.
  5. Banks have the right to demand that the name of the beneficiary appear on the bill of lading as shipper or cedant, or that the bill of lading be made out to order of beneficiary and endorsed in blank by the latter.
  6. Insurance.
    Banks have the right to accept either insurance policies or underwriter ’s insurance certificates, unless insurance certificates are expressly, excluded.
  7. Banks may accept insurance coverage which at least equals the invoice value of the goods, or the amount of the settlement if latter is higher.
  8. In the absence of specification as to risks to be covered the bank may accept ordinary marine insurance.
  9. If an insurance policy or certificate is required on overland shipments, banks may accept insurance policies covering ordinary transportation risks.
  10. When credits stipulate “insurance against all risks” banks will see that the documents are as reasonably complete as possible, but cannot be held responsible if certain risks are not covered.
  11. Invoices.
    Invoices must be in the name of the person for whose account the credit is opened or any other person appointed by same.

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  1. Banks may insist that the description of the goods appearing upon the invoices shall agree with the terms of the credit. As regards quality, banks are only obliged to see that the description of the invoice agrees with that of the credit. They may however accept shipping and insurance documents in general terms.
  2. Other documents.
    When other documents, such as consular invoices, certificates of weight, of quality or of analysis, are called for, without further definition, the banks may accept such documents as presented.
  3. As proof of weight in case of railway carriage, the banks may refer to the notation of weight usually appearing upon railway receipts or upon the counterfoil waybill if officially authenticated.

D. INTERPRETATION OF TERMS

  1. “About” or “Circa”.
    This term to be construed as allowing a variation not to exceed 10% more or less in respect to the quantity or the value of the merchandise.
  2. Partial Shipments.
    Unless otherwise instructed, banks may pay for partial shipments even if their pro rata value cannot be determined.
  3. If shipment by instalments within given periods is specified each instalment shall be treated as a separate transaction. The instalment not shipped at the given period cannot be added to subsequent shipments and is ipso facto cancelled. Banks will however continue to pay for subsequent shipments on condition that they are made at the given periods.
  4. Validity.
    The period for which all irrevocable credits are to remain in force must be stipulated. This period may be either a date of payment or date of shipment. If the credit does not specify which, the bank shall consider the date to be the date of payment and after its expiration shall refuse payment, even if the documents bear a date included within the date of payment.
  5. The words “to”, “until”, “till” and words of similar import applying to dates of maturity or orders are understood to include the date mentioned.

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  1. When the last stipulated date for payment falls on a Sunday, or public or local holiday, or upon any day upon which, under local law or custom, payments cannot be demanded, the payment shall be made in accordance with the law or custom of the place of payment. This does not apply to the last day for shipment which must be respected whatever the day of the week.
  2. The validity of a revocable credit, if no date is specified, will be considered to have expired six months from the date of the notification sent to the beneficiary by the bank with which it is opened and this bank will refuse payment after six months, unless its customer gives specific instructions to the contrary.
  3. Loading, or shipment, or dispatch.
    Prompt”, “immediately”, “as soon as possible”, etc. These terms, and others of similar import, are to be interpreted as a request for shipment and presentation of documents within thirty days from the notification to the beneficiary, unless a date has been stipulated. When the word “departure”, in a commercial documentary credit or commercial letter of credit is used to specify the final date of shipment of goods, this term may be interpreted as similar to “shipment” or “loading” or “dispatch”, and banks may be guided by the dates appearing upon bills of lading or other shipping documents.
  4. Presentation.
    When the date of shipment alone is specified in a credit, the documents must be presented without delay.
  5. In the case of a credit payable on a certain date, the documents must be presented to the bank during the usual banking hours.
  6. Prolongation.
    Any extension of the date of shipment shall extend for an equal length of time the date for presentation or negotiation of documents or drafts.
  7. Definition of date terms.
    The terms “first half ”, “second half ” of a month shall be construed as from the 1st to the 15th, and the 16th to the last day of each month inclusive, respectively.
  8. The terms “beginning”, “middle” or “end” of month shall be construed respectively as from the 1st to the 10th, the 11th to the 20th and the 21st to the last day of each month.

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  1. When a credit bears “good for one month, six months, etc.”, and the customer has not specified the date from which the term is to run, the term shall run from the date on which the order has been given.

E. TRANSFERS

  1. A credit can only be transferred on the express authority of the customer. In this case the credit can be transferred only once, and on the terms and conditions specified in the original credit, including duration of validity.
  2. Authority to transfer a credit covers authority to transfer it to another place. Bank charges entailed by such transfer are payable by the original beneficiary unless otherwise specified. During the validity of the original credit, payment may be made at the place to which the credit has been transferred.

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Regulations Affecting Export Commercial Credits

Adopted by the New York Bankers
Commercial Credit Conference of 1920

Amended on 15 March, 1934
Committee on Foreign Banking, New York, N.Y.

To our Correspondents:

Export Commercial Credits are treated in conformity with the following regulations:

  1. We assume no liability or responsibility for the form, sufficiency, correctness, validity, genuineness or legal effect of any documents or papers, or for the existence, description, quantity, weight, quality, condition, packing, delivery or value of the merchandise represented thereby, or for the general or particular conditions stipulated in the documents, or for the good faith or acts of the shipper or any other person whomsoever, or for the solvency, standing, etc., of the carriers or insurers of the merchandise; but documents and papers will be examined with care sufficient to ascertain that on their face they appear to be regular in general form.
  2. We assume no liability or responsibility for consequences arising out of delay or loss in transit of telegrams, cables, letters and/or documents, or for delay, loss or mutilation or other errors in the transmission of telegrams or cables, or for errors of translation or interpretation of technical terms, and we reserve the right to transmit credit terms without translating them.
  3. We assume no liability or responsibility for consequences arising out of the interruption of our business either by a decision of a public authority, or by strikes, lockouts, riots, wars, Acts of God or other causes beyond our control. On credits expiring during such interruption of business, we will be able to make no settlement after expiration, except on specific instructions from our principals.
  4. We will interpret the terms “DOCUMENTS”, “SHIPPING DOCUMENTS” or words of similar import, as comprehending only full set of ocean bills of lading (motor-vessel bill of lading included) and marine insurance (but not war risk) in negotiable form, with invoices.

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  1. Instructions shall be interpreted according to our law and customs, but, in any event, in accordance with the following general rules:
    1. FORWARDERS’ BILLS OF LADING and BILLS OF LADING FOR SHIPMENT BY SAILING VESSELS will not be accepted unless specifically authorized. RAILROAD THROUGH BILLS OF L ADING will not be accepted, unless expressly stipulated, except on exportations, via Pacific ports, to the Far East. Bills of Lading stipulating that they have been issued under the terms of and subject to the conditions of a “CHARTER PARTY” will not be accepted unless expressly stipulated in the credit.
    2. BILLS OF LADING INDICATING TRANSSHIPMENT will be accepted unless direct shipment is specified.
    3. Bills of Lading shall contain no notations qualifying the acceptance of merchandise in apparent good order and condition.
    4. When “OCEAN” bills of lading are required, unless otherwise stipulated, we will accept “RECEIVED FOR SHIPMENT” or “ALONGSIDE” or “PORT” or “CUSTODY” Bills of Lading. “On Board” Bills of Lading will not be demanded unless expressly required even though the credit mentions the name of a steamer.
    5. The date of the Bill of Lading in each case will be taken to be the date of shipment. When “ON BOARD” shipment is required and such shipment is represented by an “On Board” Bill of Lading, the Bill of Lading date will be taken as the date when such shipment was effected; if evidenced by “On Board” endorsement, the endorsement date will be so taken. Unless evidence of actual departure of carrier of merchandise is specifically required “LOADING”, “DISPATCH”, “DEPARTURE” shall be interpreted in the same manner as the term “SHIPMENT”.
    6. Documents for partial shipments may be accepted unless expressly prohibited. Even though the credit mentions the name of a steamer, a partial shipment or shipments by that steamer may be accepted.
    7. If shipment in instalments within stated periods is specified, each instalment will be treated as a separate transaction, and if there is a failure to ship in any designated period, shipments of subsequent instalments, made in their respective designated periods, may be drawn against.
      [Page47:]
    8. The use of “TO”, “UNTIL”, “ON”, and words of similar import, in indicating expiration, is interpreted to include the date mentioned.
    9. Any extension of the date of shipment shall extend for an equal length of time the date for presentation or negotiation of draft and documents. However, any extension of a date for presentation or negotiation of draft and documents shall not be considered as extending the date of shipment.
    10. When the indicated expiration date for presentation or negotiation falls upon a Sunday or legal holiday, the expiration is extended to the next succeeding business day. (This rule, however, does not apply to date of shipment.)
    11. We reserve the right to refuse to take up documents if, in our opinion, they are not presented within reasonable time after date of shipment.
    12. The terms “PROMPT SHIPMENT”, “IMMEDIATE SHIPMENT”, “SHIPMENT AS SOON AS POSSIBLE”, and words of similar import, shall be interpreted, if the credit advice contains no specific conditions to the contrary, as requiring shipment to be effected within 30 days from the date of notification to the beneficiary.
    13. The terms “FIRST HALF”, “SECOND HALF”, of a month shall be construed as from the 1st to the 15th, and the 16th to the last day of each month inclusive, respectively.
    14. The terms “BEGINNING”, “MIDDLE” or “END” of month, or words of similar import, shall be construed respectively as from the 1st to the 10th, the 11th to the 20th and the 21st to the last day of each month, each inclusive. When a credit bears “good for one month”, “good for six months”, etc., or a similar time limit and the date from which the term is to run is not specified, the term shall be calculated from the date of notification to the beneficiary.
    15. Our credit advice, if without expressed duration, shall not continue in force longer than six months from its date.
    16. The terms “APPROXIMATELY”, “ABOUT”, or words of similar import, shall be construed to permit a variation of not to exceed ten per centum. When the merchandise, by its nature, does not allow the delivery of the exact quantity indicated, as, for instance, metal bars, oil in barrels, etc., a leeway of 3% more or less will be allowed, even if the terms of the credit call for a fixed weight or measurement.
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    17. The term “INSURANCE” shall be construed as either policy of insurance or underwriters’ certificate of insurance. Brokers’ Cover Notes will not be accepted unless specifically stipulated.
    18. Definitions of Export Quotations will be those adopted by the National Foreign Trade Council, Chamber of Commerce of the U.S.A., National Association of Manufacturers, American Manufacturers’ Export Association, Philadelphia Commercial Museum, American Exporters’ and Importers’ Association, Chamber of Commerce of the State of New York, New York Produce Exchange and New York Merchants’ Association, at a conference held in India House, New York, on December 16, 1919.
  2. Correspondents will understand that the above regulations shall govern in all credit transactions in the absence of other specific agreements. If the beneficiary shall make representations, or shall offer security satisfactory to the bank that no loss shall result to its correspondent or client by the waiver of any of such regulations, or any instruction, the bank reserves the right to make such waiver, and shall recognize no claim in the premises unless substantial direct damage shall be shown to have resulted.

1
ICC Brochure No. 48. Record of Stockholm meeting from 27 June to 2 July 1927

2
No known copy of Brochure 47 exists.

3
Wilbert Ward published the first addition of Bank Credits and Acceptances in 1931. Further editions were published in 1948, 1958, 1974 and 1977. The 1958 edition was co-authored by Henry Harfield, and the 1974 and 1977 editions were published by Henry Harfield.

4
While the draft was included in the record of the meeting, the table was not contained in any of the ICC documents.

5
In 1927, the Junior Committee changed its name to the Committee on Foreign Banking.