Article

by Shahriar Masum

What is a transport document? The UCP has no definition for it, but at times this is an important question.

After a search, I found the most acceptable definition at businessdictionary. com, which says that such a document is an "air waybill, bill of lading, carrier's certificate, etc., that serves as an evidence of acceptance and receipt of goods for carriage and may also serve as a document of ownership (title)."

Precisely. It's an evidence of shipment. "Evidence" is a significant word. After all, this is the purpose of a transport document, especially in a world in which "Banks deal with documents and not with goods, services or performance." (UCP 600 article 5) It's the transport document in which a document checker can visualize, for example, the ship on which the concerned cargo is loaded. Pieces of information on a transport document provide a clear picture for the document checker ... how the cargo is shipped, when it is shipped, from which port it is shipped, etc.

However, this clear picture will suddenly become hazy if the information before the document checker is on a "copy of a transport document". ISBP 681 clearly warns about this: "Copies of transport documents are not transport documents ... (ISBP 681 paragraph 20)." Why is this the case? The answer is logical. A copy is less likely to have a signature, an on board notation, etc., which, in some UCP transport articles, are mandatory requirements.

ISBP 681 paragraph 20 continues: "The UCP 600 transport articles apply where there are original transport documents presented. Where a credit allows for the presentation of a copy transport document rather than an original, the credit must explicitly state the details to be shown. Where copies (non-negotiable) are presented, they need not evidence signature, dates, etc."

This sounds logical, but it is only one side of the story. The wording appears to make life simple, but for whom - the issuer, the checker or the beneficiary? It's not for the document checker, that's for sure, since he or she is getting a hazy picture or is not seeing at all.

ISBP

ISBP 681 says that when the L/C calls for a copy of a transport document, the L/C must include information about the content of that copy. But if the copy means a photocopy, then including the content of a photocopy will mean including the content of the original, because a photocopy itself cannot have any extra data; it's a copy of an original, an original whose content is already well-defined in UCP articles 19-25. So, in my view, if you are a document checker, you cannot raise a discrepancy even if the content of the copy is not in compliance with the UCP 600 transport articles that would apply had the L/C called for an original. Why is this the case?

Before answering this, it is well to turn again to ISBP 681 paragraph 20, where one finds the term "non-negotiable" in parenthesis just after the word "copy". What does this mean - that a copy means a non-negotiable copy? The intention of the ISBP Drafting Group is not clear, but it is quite common that some of the information on the original won't be available on the non-negotiable copy, such as the signature of the carrier, the on board notation, etc., as already mentioned earlier. So, one apparently cannot review a non-negotiable copy under the UCP transport articles.

But this does not mean that the nonnegotiable copy will be a blank form. It will still contain some of the data on the original - for example, a non-negotiable copy of a bill of lading will include the ports of loading and discharge, the vessel name, the names of the consignee, the shipper, etc., and this information needs to be examined.

The question arises: if the copy of a transport document is not a transport document, then under which UCP article should it be examined? The only possible option is sub-article 14 (f ), which says: "If a credit requires presentation of a document other than a transport document, insurance document or commercial invoice, without stipulating by whom the document is to be issued or its data content, banks will accept the document as presented if its content appears to fulfil the function of the required document and otherwise complies with sub-article 14 (d)."

At this point it should be noted that this sub-article allows a copy of a transport document to be issued by anyone. For example, if a photocopy of a B/L is signed by the beneficiary in the capacity of the beneficiary, there will be no discrepancy.

Fulfilling the function

The sub-article also speaks about a document "fulfilling the function" of a required document. What does this phrase mean? The Drafting Group's Commentary on UCP 600 says: "This requirement means that it must be determinable that the document fulfils the intent required. This does not mean, however, that a document checker must have knowledge [emphasis added] of all of the specific requirements for the document, but rather that he must be able to recognize [emphasis added] that its intended purpose is that required in the documentary credit." In one example, the Commentary also says: "If an applicant requests a document as simple as a 'packing list' without further description, it must have some expectations [emphasis added] as to the content of that document." It adds: "The consignee stated in the certificate of origin is there for customs purposes, whereas the consignee in the bill of lading refers to the function of the document as a document of title."

All the wording of the Commentary on UCP points to one point: the knowledge and expectations of the document checker. I would add that the ISBP also deals with expectations, even if that word does not appear in UCP 600 or ISBP 681.

Differences

What are the differences that a copy of a bill of lading, for example, may have from a original bill of lading?

1. It can be issued by anyone, even by the beneficiary;

2. An on board notation and date of issuance are not required;

3. The details concerning the consignee need not be an exact match with the L/C, as per sub article 14 (j);

4. The ports of loading and discharge, however, need to match to avoid a data conflict, unless the presented copy shows "intended vessel" or a similar qualification;

5. The name of the vessel need not be stated;

6. The goods may be shipped on deck;

7. It may be a charter party bill of lading.

While reference has been made to a bill of lading in this article, this analysis is applicable to other transport documents as well. Therefore, my interpretation is that theoretically a copy of a transport document may be a wholly other document from its original, and the document checker would have to accept it, since there is no standard enabling him/her to raise objections. Some claim the solution is in the ISBP in that one must take into account the "content" of the copy of the transport document. But what does this mean: the information mentioned in the UCP transport article or the name of the vessel on a copy of the air waybill? In one way or another, banks are likely to include the requirements mentioned in the transport articles in the L/C terms while, at the same time, asking for a copy of the transport document.

The question remains: whose job is made easier by considering a copy of a transport document not to be a transport document?

In my view, even though a copy of a transport document may not be a transport document, it should still be subject to review under the transport articles "to the extent they may be applicable", at least for the content mentioned in the non-negotiable copy of the document. This will eliminate the risks related to points 3-7 above without affecting the interests of an honest beneficiary. In this way, a document checker will be able to match the reality with his or her expectations.

Shahriar Masum is an executive officer in charge of trade service at City Bank in Bangladesh. His e-mail is shahriar2004@gmail.com