I have received an export l/c having the condition of " Shipments must be effected by containers"
1) Can it be simply deemed a non doc cond and disregarded ?
2) If you determined that the goods were not shipped in containers on presented TD , would the TD be considered as discrepant ?
3) If there were no sign on the TD how the goods are being carried on vessel , what would you consider?
thanks and regards,
Yahya
Non doc conditions under UCP600 art 14h
Non doc conditions under UCP600 art 14h
Yahya,
See Opinion TA.644rev, agreed at the last Banking Comm meeting. It concludes:
‘According to sub-article 14 (h), banks will deem a nondocumentary condition as not stated, (on the basis that there is no necessity for the beneficiary to provide any evidence of compliance) and will disregard it. Should the beneficiary, nevertheless, elect to insert such data on any other stipulated document then they must ensure that it does not conflict with the data in the credit. The view of the Banking Commission is that sub-article 14 (h) is not absolute and is qualified by the content of sub-article 14 (d).’
Based on this opinion, the answers to your questions are:
1. Yes, except to the extent of data conflict with the credit.
2. It's not just a question of the TD: if any of the documents presented did actually appear to indicate shipments were not effected by containers it would be discrepant.
3. No discrepancy.
Regards, Jeremy
[edited 5/6/2008 5:08:32 PM]
See Opinion TA.644rev, agreed at the last Banking Comm meeting. It concludes:
‘According to sub-article 14 (h), banks will deem a nondocumentary condition as not stated, (on the basis that there is no necessity for the beneficiary to provide any evidence of compliance) and will disregard it. Should the beneficiary, nevertheless, elect to insert such data on any other stipulated document then they must ensure that it does not conflict with the data in the credit. The view of the Banking Commission is that sub-article 14 (h) is not absolute and is qualified by the content of sub-article 14 (d).’
Based on this opinion, the answers to your questions are:
1. Yes, except to the extent of data conflict with the credit.
2. It's not just a question of the TD: if any of the documents presented did actually appear to indicate shipments were not effected by containers it would be discrepant.
3. No discrepancy.
Regards, Jeremy
[edited 5/6/2008 5:08:32 PM]
Non doc conditions under UCP600 art 14h
Thanks Jeremy,
I have just received the revised opinions. It is indeed a good question and in my opinion, the conclusion exactly corresponds with the practice .
Regards,
Yahya
I have just received the revised opinions. It is indeed a good question and in my opinion, the conclusion exactly corresponds with the practice .
Regards,
Yahya
Non doc conditions under UCP600 art 14h
Yahya,
My personal opinion, which I quite accept is of no consequence, is that the conclusion is 100% wrong, based on the clear words of the sub-Article and what NCs thought they were voting for when they decided on which of the three choices given to them by the Drafting Group they wanted adopted.
If you are correct regarding practice, to me it just shows the trouble those involved in doc credit operations have in interpreting the plain meaning of words.
Overall, my personal view is that this opinion shows that one simply cannot assume that the UCP means what it actually says.
Jeremy
My personal opinion, which I quite accept is of no consequence, is that the conclusion is 100% wrong, based on the clear words of the sub-Article and what NCs thought they were voting for when they decided on which of the three choices given to them by the Drafting Group they wanted adopted.
If you are correct regarding practice, to me it just shows the trouble those involved in doc credit operations have in interpreting the plain meaning of words.
Overall, my personal view is that this opinion shows that one simply cannot assume that the UCP means what it actually says.
Jeremy
Non doc conditions under UCP600 art 14h
Jeremy,
I didn't mean I agree with the conclusion but I have to say that the issues that I came across so far this time, concluded as reflected in the opinion. I 'm also aware of the voting " three choices" and I noticed the conclusion is not in line with the voting as well as the wording in art 14 h.
I quite agree with you that this proves that you cannot assume what UCP actually says until an opinion has been declared by the Banking Commission!
Regards,
Yahya
I didn't mean I agree with the conclusion but I have to say that the issues that I came across so far this time, concluded as reflected in the opinion. I 'm also aware of the voting " three choices" and I noticed the conclusion is not in line with the voting as well as the wording in art 14 h.
I quite agree with you that this proves that you cannot assume what UCP actually says until an opinion has been declared by the Banking Commission!
Regards,
Yahya
Non doc conditions under UCP600 art 14h
We discussed the effect of 14(d) on 14(h) in December 2006. Jeremy and I both opined that 14(d) should mean and did mean what it said. We are overruled by TA644rev.
The purpose of UCP500 13(c), as apparently continued in UCP600 14(h), was to deter NDCs in LCs. TA644rev undercuts that purpose. So, I predict an increase in NDCs in LC applications and an increase in issuer disputes with applicants as well as presenters over conflicts cited and not cited.
I suggest a review and upgrade of issuer agreements with applicants to limit responsibility for checking conflicts, particularly as applied to standbys issued subject to UCP600. (ISP98 disclaims examination for inconsistency or conflict.)
I assume that nominated banks can do little, other than limit further their appetites for giving value before receiving funds and the issuer's acceptance of the documents.
Regards, Jim Barnes
The purpose of UCP500 13(c), as apparently continued in UCP600 14(h), was to deter NDCs in LCs. TA644rev undercuts that purpose. So, I predict an increase in NDCs in LC applications and an increase in issuer disputes with applicants as well as presenters over conflicts cited and not cited.
I suggest a review and upgrade of issuer agreements with applicants to limit responsibility for checking conflicts, particularly as applied to standbys issued subject to UCP600. (ISP98 disclaims examination for inconsistency or conflict.)
I assume that nominated banks can do little, other than limit further their appetites for giving value before receiving funds and the issuer's acceptance of the documents.
Regards, Jim Barnes