QUERY

A credit called for presentation of, amongst others, the following document: “Certificate of Australian Origin of the commodity issued by Australian Business Chamber in the form for China- Australia Free Trade Agreement, issued in Australia in one original and three copies.”

The beneficiary presented a document titled: ‘Certificate of Origin – Form for China – Australia Free Trade Agreement’. It included the following data (a sample format of the document is attached) but did not include a statement certifying the origin of the goods, such as “Goods are of Australian Origin”:

• Shipper.

• Producer’s name and address.

• Basic shipment details, vessel name, port of loading, port of discharge, description of goods, gross and net weights, and invoice number and date.

• It included a certification as follows: “On the basis of control carried out, it is hereby certified that the information herein is correct and that the described goods comply with the origin requirements of the China-Australia Free Trade Agreement”. The certification was further certified by the Australian Chamber of Commerce and Industry.

The documents were considered as compliant by the nominated bank and forwarded to the issuing bank.

The issuing bank sent a refusal notice quoting the discrepancy “Certificate of Origin does not show the origin of goods”. The nominated bank did not agree and argued that the document did not need to meet the normal criteria, i.e., indicate the origin of the goods, provided it was in the format required by the credit.

The nominated bank also indicated that its view is supported by ISBP 745 paragraph L2 which states: “When a credit requires the presentation of a specific form of certificate of origin such as a GSP Form A, only a document in that specific form is to be presented.”

The issuing bank did not agree and quoted ISBP 745 paragraph L1 which states: “When a credit requires the presentation of a certificate of origin, this will be satisfied by the presentation of a signed document that appears to relate to the invoiced goods and certifies their origin.”

Subsequently, the nominated bank replied stating that ISBP 745 paragraph L1 could only be applied when the credit simply requires a Certificate of Origin. However, because this credit requested a specific type of document, which is created in a particular format, the applicable paragraph from ISBP 745 is L2.

The issuing bank responded by stating that when a credit requires the presentation of a specific form of certificate of origin, only a document in that specific form is to be presented, and this will be satisfied by the presentation of a signed document that appears to relate to the invoiced goods and certifies their origin. In this case, the document did not explicitly state the country of origin.

1. We seek the opinion of the ICC as to whether the document presented complied with the letter of credit terms.

2. Given the increasing proliferation of Free Trade Agreements globally, would the presentation of a specific “Free Trade Agreement” Certificate of Origin be acceptable, whether or not it included an indication of the origin of the goods, when a credit calls for a ‘Certificate of Origin’ or ‘Certificate of Origin issued by the beneficiary’?

ANALYSIS

Issue 1:

ISBP 745, paragraph L1, describes the basic requirements when a credit calls for a “certificate of origin”, one of which is that it must certify the origin of the goods.

ISBP 745, paragraph L2, addresses the situation where a credit requires the presentation of a specific form of certificate of origin. In such case, only a document in the required form is to be presented.

For the transaction in question, the credit required the presentation of a “Certificate of Australian Origin of the commodity issued by Australian Business Chamber in the form for China-Australia Free Trade Agreement, issued in Australia in one original and three copies” [emphasis added].

On the basis of the above condition, ISBP 745 paragraph L2 applies, and the presented document must be in the form for China-Australia Free Trade Agreement and, because of the express wording in the credit, it must also specifically indicate the origin of the commodity as Australian.

The format of the document for box 10 requires only the insertion of “WO”, “WP” or “PSR” and not a specific country name. The instruction sheet that appears on the reverse of the certificate does not explicitly indicate that any of these acronyms mean Australia and Australia alone. The origin criterion refers to an article 3.3 and chapter 3 to determine what the acronyms mean in respect of the origin. Even the certification in box 14 is vague in defining the origin as it refers to “.... described goods comply with the origin requirements of the ....”, which could mean any number of origins being applicable. For goods subject to this trade agreement, the credit should make allowance for the presentation of this type of document and indicate that the origin criterion may be shown as acronyms allowed by the certificate itself.

Issue 2:

UCP 600, sub-article 14 (f ), determines the type of document that is acceptable when a credit requires a “Certificate of Origin” or “Certificate of Origin issued by the beneficiary”, and is further qualified by ISBP 745, paragraphs A39, L1 and L3 (c) (i).

When a credit requires a “Certificate of Origin” or “Certificate of Origin issued by the beneficiary”, the presented document, which may bear a similar title to that required by the credit, is to be signed and must certify the origin of the goods. “Free Trade Agreement” Certificate of Origin is considered to be a similar title to “Certificate of Origin”.

In addition, a requirement for a “Certificate of Origin issued by the beneficiary” would be satisfied by a certificate of origin issued by “Australian Chamber of Commerce and Industry” (according to the sample attached), provided it indicates the beneficiary, the exporter or the manufacturer as the case may be.

CONCLUSION

1. Absent an indication of “Australian origin”, or any indication of the origin criterion which currently allows “WO”, “WP” or “PSR”, the document is discrepant.

2. Such specific format is acceptable provided it certifies the origin of the goods.

Attachment to R899