I would be grateful for some opinion on the following:-
B/L shows "FIOST", which would normally be acceptable as per ISBP133. However, price clause in the L/C is "CIF FO" which is obviously shown on the invoice.
Conflicting data or not?
Conflicting data?
Conflicting data?
As I have received no input from anyone I guess this means that either I have not explained the problem eloquently enough or no-one knows the answer.
Therefore, I shall lay out the situation in more detail in the hope that I can elicit a reply or two.
Our customer is the beneficiary of an L/C issued by a bank in China and subject to UCP600. L/C is negotiable by any bank and our customer has presented documents to us for negotiation.
Among the terms of the L/C we have:-
Field 45a - Under goods description the price term is shown as "CIF FO Fangcheng, China" - "FO" meaning "Free Out"
Field 46a - Bill of Lading requirement states "Full set 3/3 original clean on board Bills of Lading made out to order, blank endorsed, marked 'Freight Payable as per Charter Party' and/or 'Freight Prepaid' notifying (applicant)"
Field 47a - We have a clause which states "Unless otherwise stipulated, all documents with the exception of Drafts and Invoice must not mention any Letter of Credit no., bank chop, the name of any bank, Invoice number, unit price of goods, Price Term, total value of goods, date of Letter of Credit, any Contract no., Offer number or Offer reference number between the Beneficiary and Applicant and name of any party except issuer (except B/L showing name of shipper, notify party, name of Master/Owner/Carrier and Agent of Carrier allowed)."
Beneficiary presented a Bill of Lading showing "F.I.O.S.T" - meaning "Free in and out, stowed".
This raised 2 questions:-
1. Is FIOST deemed to be a price term, which is not allowed by the clause above in field 47a?
2. Does 'FIOST' on the B/L conflict with the price term 'CFR FO' in the L/C and shown on the Invoice?
Conclusion -
1. After some deliberation and review of ISBP 133, we decided that the L/C did not specifically state that costs additional to freight were not acceptable and therefore the mention of FIOST on the B/L on it's own did not fall foul of the special condition under field 47a, and was therefore acceptable on this point.
2. Our view was that if the price term in the L/C is 'CFR FO', which is very specific, then a B/L stating 'FIOST' must be in conflict, since this may incur additional costs to the buyer.
It would be good to hear the view of someone in the transport industry to either validate our interpretation or shoot it down in flames!
Thanks
Therefore, I shall lay out the situation in more detail in the hope that I can elicit a reply or two.
Our customer is the beneficiary of an L/C issued by a bank in China and subject to UCP600. L/C is negotiable by any bank and our customer has presented documents to us for negotiation.
Among the terms of the L/C we have:-
Field 45a - Under goods description the price term is shown as "CIF FO Fangcheng, China" - "FO" meaning "Free Out"
Field 46a - Bill of Lading requirement states "Full set 3/3 original clean on board Bills of Lading made out to order, blank endorsed, marked 'Freight Payable as per Charter Party' and/or 'Freight Prepaid' notifying (applicant)"
Field 47a - We have a clause which states "Unless otherwise stipulated, all documents with the exception of Drafts and Invoice must not mention any Letter of Credit no., bank chop, the name of any bank, Invoice number, unit price of goods, Price Term, total value of goods, date of Letter of Credit, any Contract no., Offer number or Offer reference number between the Beneficiary and Applicant and name of any party except issuer (except B/L showing name of shipper, notify party, name of Master/Owner/Carrier and Agent of Carrier allowed)."
Beneficiary presented a Bill of Lading showing "F.I.O.S.T" - meaning "Free in and out, stowed".
This raised 2 questions:-
1. Is FIOST deemed to be a price term, which is not allowed by the clause above in field 47a?
2. Does 'FIOST' on the B/L conflict with the price term 'CFR FO' in the L/C and shown on the Invoice?
Conclusion -
1. After some deliberation and review of ISBP 133, we decided that the L/C did not specifically state that costs additional to freight were not acceptable and therefore the mention of FIOST on the B/L on it's own did not fall foul of the special condition under field 47a, and was therefore acceptable on this point.
2. Our view was that if the price term in the L/C is 'CFR FO', which is very specific, then a B/L stating 'FIOST' must be in conflict, since this may incur additional costs to the buyer.
It would be good to hear the view of someone in the transport industry to either validate our interpretation or shoot it down in flames!
Thanks
Conflicting data?
I guess you consider that as the credit requires CIF FO , there seems to be an interference that the credit prohibits shipment terms such as FIO, FIOST... which are considered to contain much more costs to the applicant than FO.
My view that as the term FIOST covers FO , the docs are complaint with the terms of the credit and this situation cannot be seen as conflicting data as the credit didn't specifically prohibit any other term.
If the parties were concerned that there was a possibility of another shipping term taking place, suitable terminology providing only " FO " on docs should have been incorporated within the terms and conditions of the credit.
Regards
Yahya ,
My view that as the term FIOST covers FO , the docs are complaint with the terms of the credit and this situation cannot be seen as conflicting data as the credit didn't specifically prohibit any other term.
If the parties were concerned that there was a possibility of another shipping term taking place, suitable terminology providing only " FO " on docs should have been incorporated within the terms and conditions of the credit.
Regards
Yahya ,