Is this documentary or non-documentary condition?

[PhanThanhNhan]

Hi all,

We received a L/C (commodity: rice) stated in field 47B: "2 pct empty bags to be provided free of cost" and this condition not stated in field 45

We have two opinions on this matter:
1. This condition is non-documentary one as this does not appear in field 45 and this condition only related to the packing of the commodity and as per sub-article 14h UCP600, we will deem such condition as not stated and will disregard it. However, this condition can appear on invoice, P/L, B/L...
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2. This condition means that L/C also calls for empty bags besides commodity rice and the invoice, P/L, B/L and other docs. must show this condition.
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Do you agree with opinion 1 or 2? Why?
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Thanks a lot.

[DanielD]

I do not like the fact to disregard a n.d. condition. You never know these days.
Best thing is to state it somewhere in a manner consistent with the other conditions/documents or even better to ask the issuing bank how to check it.
Regards
Daniel

[SergeyK]

I share Daniel's opinion.
Moreover, I would add - it depend on what your bank is requested to do with this LC - if, just to advise the LC, then you may draw beneficiary's attention to this specific point and if Beneficiary would like - they would ask for clarification.
If you intend to accept some risk under the transaction (to confirm LC, negotiate documents etc.) I would strongly recommend to contact issuing bank for amendment, as even now I can not clearly understand of what is required - 2pct emty bags (question: what is the basis for calculation of these 2 pct, full bags? Does it mean, that full bags have price per unit? Is it mentioned in field 45?)

With best wishes,
Sergey

[NigelHolt]

I feel firmly this is a NDC. Nonetheless, I could well understand an advising-nominated bank not being willing to rely on 14(h) and seeking to protect itself in some way.