Happy New Year to all.
I have a question on this Article.
'In documents other than the commercial invoice, the description of the goods, services or performance, if stated, may be in general terms not conflicting with their description in the credit'.
That said, if the LC did not require, other documents need not mention any description of goods. The only exception would be commerical invoice (as mentioned in UCP), and transport documents (as mentioned in ISBP under different kinds of transport documents).
In that case, would any body constitute below documents not comply when LC call for FCR and Inspection Cert without further requirment and whereas the presented FCR (issued by a third party forwarder) only have quantity (no goods description) and the Inspection Cert (issued by an independent surveyor) has no goods description nor quantity?
Regards
Raymond
Article 14 e
Article 14 e
Raymond,
I do not think that 14(e) is necessarily the sole consideration here. I believe 14(f) and also the (possibly controversial) question of ‘linkage’ might be pertinent as well. However, without knowing more about the two documents and more particularly the exact requirements of the credit it is difficult to be specific. Are you able to give more information?
Jeremy
[edited 1/3/2009 10:42:52 AM]
I do not think that 14(e) is necessarily the sole consideration here. I believe 14(f) and also the (possibly controversial) question of ‘linkage’ might be pertinent as well. However, without knowing more about the two documents and more particularly the exact requirements of the credit it is difficult to be specific. Are you able to give more information?
Jeremy
[edited 1/3/2009 10:42:52 AM]
Article 14 e
Hi Jeremy,
Thanks for your reply.
This was just a question discussed among our team when we study captioned UCP Article. We did not really have the LC or documents in hand.
We wonder how to treat these two documents in case we received in real life (as it might happen) especially the Position Paper regarding 'linkage' had been abandoned after the birth of UCP600.
Regards
Raymond
Thanks for your reply.
This was just a question discussed among our team when we study captioned UCP Article. We did not really have the LC or documents in hand.
We wonder how to treat these two documents in case we received in real life (as it might happen) especially the Position Paper regarding 'linkage' had been abandoned after the birth of UCP600.
Regards
Raymond
Article 14 e
Raymond,
You say that ‘the Position Paper regarding 'linkage' had been abandoned after the birth of UCP600’. However I do not consider there ever was such a Position Paper, at least in the sense that I -and I believe most doc. credit bankers- use the term ‘linkage’. (Thus, I do not consider PP3 as having anything to do with ‘linkage’.)
In case of interest here are my personal thoughts on the subject of ‘linkage’.
UCP600, like UCP500, is wholly silent regarding the question of ‘linkage’ between documents presented (although UCP400 was not). However, in the Commentary on UCP 600, ICC Publication 680, it is stated that:
'UCP 600 does not refer to, require or imply that linkage is necessary between or among documents.'
This would appear, on its face, to be an authoritative statement that 'linkage' between documents is not required, even though the Commentary is not a Banking Commission approved document. However, exactly the same statement could have been made about UCP500. Nonetheless, in Opinion R251 -published in 1997- the ICC Commission on ‘Banking’ Technique and Practice stated:
‘a bank requires to see some form of "linkage" between the documents presented and/or the letter of credit terms’.
This opinion was confirmed in ‘unpublished’ Opinion TA525rev given in 2003.
These two opinions would appear to confirm that it is international standard banking practice to require ‘linkage’ in all documents -other than the commercial invoice- presented under a Credit. (While they were given while UCP500 was 'in force' they remain seemingly 'valid' as UCP600 does not contain any provisions on the subject.)
That this remains the position would seem to be confirmed by the retention of -what was- paragraph 198 of ISBP645 as paragraph 183 in ISBP681. This latter paragraph DOES require linkage between the C/O and invoice. (N.B. ISBP cannot contradict the UCP.)
Based on Opinions 251 and TA525rev and paragraph 181 of ISBP681, ‘linkage’ may be achieved by a document containing:
A) a general description of goods which is not inconsistent with the commercial invoice, or:
B) a ‘reference indicating a relation to the goods’ or the Credit. Examples of such a reference would include the Credit no.; the contract, purchase order or pro-forma invoice no. mentioned in the Credit; and the commercial invoice no.
However, this does not cover a documentary requirement relating to a matter other than the goods, e.g. if the Credit requires a carrier’s certificate that the carrying vessel must be less than 20 years old. International standard banking practice logically also requires the document to contain some form of linkage specifically relating it to the other connected document(s) presented. For example, linkage can be created by -for instance- the certificate naming the vessel, and the name being the same as appears in the bills of lading or the certificate quoting the no. of the bill of lading presented.
Regards, Jeremy
[edited 1/5/2009 2:34:59 PM]
You say that ‘the Position Paper regarding 'linkage' had been abandoned after the birth of UCP600’. However I do not consider there ever was such a Position Paper, at least in the sense that I -and I believe most doc. credit bankers- use the term ‘linkage’. (Thus, I do not consider PP3 as having anything to do with ‘linkage’.)
In case of interest here are my personal thoughts on the subject of ‘linkage’.
UCP600, like UCP500, is wholly silent regarding the question of ‘linkage’ between documents presented (although UCP400 was not). However, in the Commentary on UCP 600, ICC Publication 680, it is stated that:
'UCP 600 does not refer to, require or imply that linkage is necessary between or among documents.'
This would appear, on its face, to be an authoritative statement that 'linkage' between documents is not required, even though the Commentary is not a Banking Commission approved document. However, exactly the same statement could have been made about UCP500. Nonetheless, in Opinion R251 -published in 1997- the ICC Commission on ‘Banking’ Technique and Practice stated:
‘a bank requires to see some form of "linkage" between the documents presented and/or the letter of credit terms’.
This opinion was confirmed in ‘unpublished’ Opinion TA525rev given in 2003.
These two opinions would appear to confirm that it is international standard banking practice to require ‘linkage’ in all documents -other than the commercial invoice- presented under a Credit. (While they were given while UCP500 was 'in force' they remain seemingly 'valid' as UCP600 does not contain any provisions on the subject.)
That this remains the position would seem to be confirmed by the retention of -what was- paragraph 198 of ISBP645 as paragraph 183 in ISBP681. This latter paragraph DOES require linkage between the C/O and invoice. (N.B. ISBP cannot contradict the UCP.)
Based on Opinions 251 and TA525rev and paragraph 181 of ISBP681, ‘linkage’ may be achieved by a document containing:
A) a general description of goods which is not inconsistent with the commercial invoice, or:
B) a ‘reference indicating a relation to the goods’ or the Credit. Examples of such a reference would include the Credit no.; the contract, purchase order or pro-forma invoice no. mentioned in the Credit; and the commercial invoice no.
However, this does not cover a documentary requirement relating to a matter other than the goods, e.g. if the Credit requires a carrier’s certificate that the carrying vessel must be less than 20 years old. International standard banking practice logically also requires the document to contain some form of linkage specifically relating it to the other connected document(s) presented. For example, linkage can be created by -for instance- the certificate naming the vessel, and the name being the same as appears in the bills of lading or the certificate quoting the no. of the bill of lading presented.
Regards, Jeremy
[edited 1/5/2009 2:34:59 PM]