I have two different, but similar scenarios:
1. LC is issued in English and does not specify the language of the documents. A required document is presented in a language other than English. ISBP Paragraph 23 may or may not be relevant, as the document may or may not be issued by the beneficiary.
Do you:
a. have the document translated and examine for compliance with the credit as usual; or
b. reject the document as discrepant and require the beneficiary to provide a translation in order to examine?
If you reject the document and return, do you first have it translated for regulatory compliance checks? [This question is directed primarily at the Americans, but is valid for anyone who has to do regulatory compliance checks per their country's laws.]
2. LC is issued in English and does not specify the language of the documents. A document NOT required by the credit is presented in a language other than English.
Whether you return the document to the presenter or pass it on, do you have it translated first in order to do regulatory compliance checks? [Same comment as above; this question is directed primarily to Americans, but welcome opinions of all.]
Thank you much,
Lisa
Document in a foreign language
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ThuHoangAnh_
- Posts: 58
- Joined: Fri Apr 05, 2019 5:28 pm
Document in a foreign language
Dear Lisa,
Unless otherwise provided by the credit, the documents presented under the credit should be made in the language of the credit. Hence, if the documents presented are made in the language other than the language(s) specified in the credit, the nominated bank acting on its nomination, the confirming bank (if any) or the issuing bank is entitled to reject.
With this in mind I wish to answer your questions as follows:
1.a No. A bank assumes no responsibility for translation. I wonder if your LC staff can translate the document made in Chinese or Vietnamese into English.
1.b It depends.
+ If our bank acts as the beneficiary’s bank that examines and forwards the documents to the issuing bank or negotiates the documents on a with-recourse basis, we would notify the beneficiary of the discrepancy and ask him to replace, if possible, with other documents made in the language of the credit or the language(s) specified in the credit and limited by our bank in our advice of the credit. If requested by the beneficiary, we may help translate the documents into the language of the credit, but we will agree with the beneficiary that we assume no liability for errors in translation (UCP 600 article 35).
+ If our bank is a nominated bank acting on its nomination, a confirming bank or .the issuing bank, we would reject the documents in accordance with UCP 600 article 16 (c). The beneficiary may replace with corrected documents but in any case such replacement must be made within the period for presentation and by the expiry date of the credit.
+ The answer is the same as the answer 1.a, the bank is not obligated to translate the documents for compliance check.
2. A document (irrespective of any language) presented but not required by the credit will be disregarded and may be returned to the presenter (UCP 600 article 14 (g)).
Best regards,
N.H Duc
Unless otherwise provided by the credit, the documents presented under the credit should be made in the language of the credit. Hence, if the documents presented are made in the language other than the language(s) specified in the credit, the nominated bank acting on its nomination, the confirming bank (if any) or the issuing bank is entitled to reject.
With this in mind I wish to answer your questions as follows:
1.a No. A bank assumes no responsibility for translation. I wonder if your LC staff can translate the document made in Chinese or Vietnamese into English.
1.b It depends.
+ If our bank acts as the beneficiary’s bank that examines and forwards the documents to the issuing bank or negotiates the documents on a with-recourse basis, we would notify the beneficiary of the discrepancy and ask him to replace, if possible, with other documents made in the language of the credit or the language(s) specified in the credit and limited by our bank in our advice of the credit. If requested by the beneficiary, we may help translate the documents into the language of the credit, but we will agree with the beneficiary that we assume no liability for errors in translation (UCP 600 article 35).
+ If our bank is a nominated bank acting on its nomination, a confirming bank or .the issuing bank, we would reject the documents in accordance with UCP 600 article 16 (c). The beneficiary may replace with corrected documents but in any case such replacement must be made within the period for presentation and by the expiry date of the credit.
+ The answer is the same as the answer 1.a, the bank is not obligated to translate the documents for compliance check.
2. A document (irrespective of any language) presented but not required by the credit will be disregarded and may be returned to the presenter (UCP 600 article 14 (g)).
Best regards,
N.H Duc
Document in a foreign language
Why should documents (apart from invoice) be issued in the same language of the credit and why could they be rejected if it is not the case?
Daniel
Daniel
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ThuHoangAnh_
- Posts: 58
- Joined: Fri Apr 05, 2019 5:28 pm
Document in a foreign language
Dear Daniel,
Suppose that a credit issued in English requires a certificate to be issued by the local competent authority certifying that the garments are not produced by child labor or forced labor, and such a certificate is presented but in Cambodian Will your bank (in Switzerland) accept such a certificate? The answer expected is “No”. That is the reason why the documents required should be issued in the language of the credit or at least in languages specified in the credit or in the advice of the credit.
Best regards,
N.H Duc
Suppose that a credit issued in English requires a certificate to be issued by the local competent authority certifying that the garments are not produced by child labor or forced labor, and such a certificate is presented but in Cambodian Will your bank (in Switzerland) accept such a certificate? The answer expected is “No”. That is the reason why the documents required should be issued in the language of the credit or at least in languages specified in the credit or in the advice of the credit.
Best regards,
N.H Duc
Document in a foreign language
Dear N.H. Duc,
It has always been a recurrent topic and we can argue a lot about it. My opinion is that it is difficult to raise a discrepancy because one cannot (?) check or one does not understand a document. I remember a time when it was said that the official languages for documentary credits were English, German and French. Surely things have moved on. Banks dealing with international transactions are supposed to have expertise and a network and also have 5 days to check the documents. Therefore I would try to find a solution (translation) instead of rejecting the document. Now I am aware that not everybody would agree.
Daniel
It has always been a recurrent topic and we can argue a lot about it. My opinion is that it is difficult to raise a discrepancy because one cannot (?) check or one does not understand a document. I remember a time when it was said that the official languages for documentary credits were English, German and French. Surely things have moved on. Banks dealing with international transactions are supposed to have expertise and a network and also have 5 days to check the documents. Therefore I would try to find a solution (translation) instead of rejecting the document. Now I am aware that not everybody would agree.
Daniel
Document in a foreign language
N.H. Duc and Daniel, Thank you. You both bring up valid points that I wish to address.
N.H. Duc - You asked if my bank would be able to handle a document in Chinese or Vietnamese, and the answer is yes. I work for one of the largest international banks in the world, and even if we do not have people fluent in my department (in the U.S.), we have offices in many countries. Translation is but a scan and an e-mail away. But honestly, that shouldn't matter. I would consider international standard banking practice to apply whether I am at a large bank or a small one with fewer resources (it just becomes harder at the smaller bank).
Daniel - I think you are alluding to the fact that the UCP says NOTHING about documents in a foreign language, except that banks are not responsible for errors in translation. It's hard to make the leap from that article to stating that a document is discrepant if it comes in a language other than that of the credit.
Actually, if a document is issued for customs purposes, I would EXPECT that document to be in the language of the importing country. That actually makes sense to me.
And, if it actually is standard banking practice to reject such a document as discrepant, what would be the purpose of stating in the credit (or any confirmation, for that matter) "All documents must be in the English language"? It wouldn't matter if that was stated or not, yet I see that, so many banks think it makes a difference.
Still seeking more opinions (Jeremy and Kim, you MUST have opinions on this!) as we are split on this in my office. I guess I've tipped my hand on what my opinion is.
Thanks again,
Lisa
N.H. Duc - You asked if my bank would be able to handle a document in Chinese or Vietnamese, and the answer is yes. I work for one of the largest international banks in the world, and even if we do not have people fluent in my department (in the U.S.), we have offices in many countries. Translation is but a scan and an e-mail away. But honestly, that shouldn't matter. I would consider international standard banking practice to apply whether I am at a large bank or a small one with fewer resources (it just becomes harder at the smaller bank).
Daniel - I think you are alluding to the fact that the UCP says NOTHING about documents in a foreign language, except that banks are not responsible for errors in translation. It's hard to make the leap from that article to stating that a document is discrepant if it comes in a language other than that of the credit.
Actually, if a document is issued for customs purposes, I would EXPECT that document to be in the language of the importing country. That actually makes sense to me.
And, if it actually is standard banking practice to reject such a document as discrepant, what would be the purpose of stating in the credit (or any confirmation, for that matter) "All documents must be in the English language"? It wouldn't matter if that was stated or not, yet I see that, so many banks think it makes a difference.
Still seeking more opinions (Jeremy and Kim, you MUST have opinions on this!) as we are split on this in my office. I guess I've tipped my hand on what my opinion is.
Thanks again,
Lisa
Document in a foreign language
Lisa,
Para 23 refers only to an ‘expectation’, and then only in relation to documents issued by the beneficiary. Therefore I am uncertain as to a bank’s right to refuse a document produced by the beneficiary that is not in the language of the credit.
To me, if you are unclear as to the issuer you at least need to establish this, by way of asking a translator to identify who this is. If the issuer is the beneficiary & you are happy to rely on para 23 logically the document need not be translated in full and must simply be refused. However, if you are not willing to rely on para 23 or the issuer is not the beneficiary clearly you will need to have the document translated for ‘compliance with the Credit’ purposes, unless you believe isbp, not documented in ISBP681, etc. supports refusal of the document by reason of it being in a ‘foreign’ language.
I certainly would not follow your 1(b) as I do not see any provision for such an approach in UCP600 / ISBP681. A document in a ‘foreign’ language is either non-compliant by reason thereof, and must simply be refused, or it is not and if not the onus (I would anticipate) is on the bank itself to verify as a question of fact if it is compliant. I do not believe a beneficiary provided translation would fulfil this requirement.
With respect to ‘regulatory’ compliance, I cannot claim to have any detailed knowledge of the UK’s requirements but my understanding is that there is not any express requirement to examine every document handled to see if it might breach UK sanctions / money laundering etc regulations which, I believe, are far less extensive / proscriptive than those of the US. Therefore I cannot help you I am afraid.
Regards, Jeremy
Para 23 refers only to an ‘expectation’, and then only in relation to documents issued by the beneficiary. Therefore I am uncertain as to a bank’s right to refuse a document produced by the beneficiary that is not in the language of the credit.
To me, if you are unclear as to the issuer you at least need to establish this, by way of asking a translator to identify who this is. If the issuer is the beneficiary & you are happy to rely on para 23 logically the document need not be translated in full and must simply be refused. However, if you are not willing to rely on para 23 or the issuer is not the beneficiary clearly you will need to have the document translated for ‘compliance with the Credit’ purposes, unless you believe isbp, not documented in ISBP681, etc. supports refusal of the document by reason of it being in a ‘foreign’ language.
I certainly would not follow your 1(b) as I do not see any provision for such an approach in UCP600 / ISBP681. A document in a ‘foreign’ language is either non-compliant by reason thereof, and must simply be refused, or it is not and if not the onus (I would anticipate) is on the bank itself to verify as a question of fact if it is compliant. I do not believe a beneficiary provided translation would fulfil this requirement.
With respect to ‘regulatory’ compliance, I cannot claim to have any detailed knowledge of the UK’s requirements but my understanding is that there is not any express requirement to examine every document handled to see if it might breach UK sanctions / money laundering etc regulations which, I believe, are far less extensive / proscriptive than those of the US. Therefore I cannot help you I am afraid.
Regards, Jeremy