We post query as received:
Quote
1.ICC has previously stated that amendments to documents issued by a
beneficiary need not be authenticated.
What about amendments/alterations on documents issued by the beneficiary & countersigned by an authorised/named signatory on behalf of the applicant e.g Delivery Order issued by beneficiary & acknowledged by applicant confirming receipt of goods in good order & condition. Another example is a Certificate of Successful Commissioning
issued by the beneficiary & concurred/confirmed by the applicant.
In the event the amendments need to be authenticated, who can authenticate i.e must it be the same authorised signatories who have signed
& how is the authentication to be effected i.e must it be a full signature
or an initial is sufficient.
2.As negotiating bank, we noted discrepancies in the documents presented.
Nevertheless we proceeded to negotiate the documents for an invoice
amount
of USD110, 000 against an indemnity.Upon receipt of documents, issuing bank
sent us a SWIFT message advising us that they have remitted funds totalling
USD110, 000 to the reimbursing bank & instructing us to claim from them.
Our question is should we claim for the full amount of USD110, 000 or
USD109, 925 i.e less discrepancy fee of USD75 as stipulated in the
credit?
Unquote
regards
Abdulkader
Discrepancy Fee and Alteration on Doc. that needs Applicants
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AbdulkaderBazara
- Posts: 256
- Joined: Fri Apr 05, 2019 5:15 pm
Discrepancy Fee and Alteration on Doc. that needs Applicants
My personal views, without liability/responsibility, re 1. are:
I assume the opinion in which the ICC Banking Commission said “amendments to documents issued by a beneficiary need not be authenticated” is TA103 of 1997. What I find odd is that I cannot trace it in the published opinions or on the DC-PRO database (perhaps I am looking but not seeing?). I am not sure whether the copy I have is as it was adopted by the Banking Commission, but based on the two ISBP drafts I imagine it also said that where a document is issued by the beneficiary corrections do not require authentication even if the document has been ‘certified, legalised etc’., by implication by the certifier or legaliser. This attitude I find surprising, as it allows the beneficiary to make all sorts of changes post-certification/legalisation.
Assuming one considers that this aspect of the opinion is ‘valid’, one question I believe one could ask oneself is: “Do the documents described (above) fall within the ambit of this opinion?” For example, are they ‘certified’ by the applicant? I can see an arguments either way, revolving around the context in which these words were used in the opinion and are used in credit operations.
However, even if one did answer confidently in the affirmative, given the nature of the documents in question I believe one also needs to ask oneself: “What are the nature of the alterations?” For example, do they, or could they, suggest that the applicant did not consider the goods were ‘in good order & condition’ or that the goods were not ‘successfully commissioned’, but that the beneficiary has altered the document to give a contrary impression? If the alterations did, I would be loathe to rely on the ICC opinion in a court of law, and thus would feel obliged to reject the documents, unless the alterations were purportedly approved by the beneficiary or a party acting on its behalf (the authentication meeting the terms of sub-Article 20d).
While on the subject of the authentication of alterations, among the many things that I find unsatisfactory in the latest draft of ISBP is the apparent suggestion that a bank identify alterations made between a presentation (“first presentation”) and a re-presentation (“second presentation”) (lines 294 – 297); this, to me, is completely barmy (no offence meant!).
I assume the opinion in which the ICC Banking Commission said “amendments to documents issued by a beneficiary need not be authenticated” is TA103 of 1997. What I find odd is that I cannot trace it in the published opinions or on the DC-PRO database (perhaps I am looking but not seeing?). I am not sure whether the copy I have is as it was adopted by the Banking Commission, but based on the two ISBP drafts I imagine it also said that where a document is issued by the beneficiary corrections do not require authentication even if the document has been ‘certified, legalised etc’., by implication by the certifier or legaliser. This attitude I find surprising, as it allows the beneficiary to make all sorts of changes post-certification/legalisation.
Assuming one considers that this aspect of the opinion is ‘valid’, one question I believe one could ask oneself is: “Do the documents described (above) fall within the ambit of this opinion?” For example, are they ‘certified’ by the applicant? I can see an arguments either way, revolving around the context in which these words were used in the opinion and are used in credit operations.
However, even if one did answer confidently in the affirmative, given the nature of the documents in question I believe one also needs to ask oneself: “What are the nature of the alterations?” For example, do they, or could they, suggest that the applicant did not consider the goods were ‘in good order & condition’ or that the goods were not ‘successfully commissioned’, but that the beneficiary has altered the document to give a contrary impression? If the alterations did, I would be loathe to rely on the ICC opinion in a court of law, and thus would feel obliged to reject the documents, unless the alterations were purportedly approved by the beneficiary or a party acting on its behalf (the authentication meeting the terms of sub-Article 20d).
While on the subject of the authentication of alterations, among the many things that I find unsatisfactory in the latest draft of ISBP is the apparent suggestion that a bank identify alterations made between a presentation (“first presentation”) and a re-presentation (“second presentation”) (lines 294 – 297); this, to me, is completely barmy (no offence meant!).
Discrepancy Fee and Alteration on Doc. that needs Applicants
I go with Jeremy´s findings and assumptions. I have also found the previous aspects of the draft of ISBP, to which he relates, difficult to digest. However the last draft ISBP as of April 2002 says on this issue the following: „Alterations in documents issued by the beneficiary himself, which have not been legalised, visaed or authenticated in any other way, need not be authenticated. ICC Opinion R 455.“ I would take that in the case as above the Beneficiary´s document is to be „authenticated“ by the Applicant.
Pavel Andrle
Pavel Andrle