Consignee different in B/L and Invoice

[Jan-ErikJärvenpää]

The L/C calls for a B/L to be consigned to the issuing bank.
The presented invoice states consignee = applicant.
IS THIS ACCEPTABLE and is there any ICC Opinion/DOCDEX covering this issue ?

[PGauntlett]

I've never understood why certain banks have problems with this. It is standard practice to have a b/l consigned to a bank. There can be no inconsistency if the invoice (or other docs) show consignee/buyer as l/c applicant.
There has been an ICC opinion supporting this but I'll leave the searching on this site to you.

[larryBacon]

You have stated that the L/C calls for the B/L to be consigned to the issuing bank. Is the issuing bank therefore the applicant ? I think not. I presume that the L/C calls for the B/L to be consigned to order of the issuing bank. If this is the case, then the ultimate consignee is determined by the issuing bank, but the intended consignee is the applicant.
To put it another way, if the L/C called for the B/L to be made out "to order", would you seek the invoice to be made out in the same way ?
You have not said whether there are any other parties on the invoice. To comply with Article 37 a ii, the invoice must be made out in the name of the applicant. Sometimes invoices are made out in the name of the applicant in a box titled consignee if it is considered that the purchaser/applicant/ultimate consignee are the same. This leads to the confusion referred to in this Topic.

Laurence A. J. Bacon

laurence_aj@hotmail.com

[vobrien]

I think you will get specific benefit from R276 from the ICC 1997 Queries whick dealt with different consignees on BL and Cert of Origin which was a regular cause for dicussion or even dispute.

To quote from R275
" In circumstances where the credit requires a bill of lading to be issued to order and blank endorsed, it is not unreasonable to expect that the consignee would be shown as the applicant of the letter of credit, or any other name shown in the credit as the ultimate receiver of the goods. Where a credit requires the bill of lading to be issued to order of the issuing bank, it would not, once again, be unreasonable to expect the certificate of origin to show the ultimate receiver of the goods as the
consignee.

Unless the credit stated otherwise, certificates of origin issued as described above would be acceptable"

I hope this helps.

[T.O.Lee]

I remember that the ICC Banking Commission has answered similar queries more than one time. Please search DC PRO for them.

I have a concept of "Putting Right Data Content In Right Document" to avoid discrepancies. Based on this concept, LC practitioners should not put transport data content (such as "consignee") to a non transport document, such as a certificate of origin or commercial invoice. They should have used the word "buyer" (or"applicant") instead of "consignee". Similarly, we should not use transport or insurance terms like "shipper" (should have used "seller"), "insured" (should have used "seller" or "buyer" depending on which Incoterm one uses) so on and so forth. Otherwise there will be no ending for such discrepancies.

As a trainer in LC, correcting concepts (the job of a facilitator) is more effective than correcting behaviours (which is the job of a "circus trainer", only fit for training animals, not human being).

I am from www.tolee.com


[edited 5/24/01 11:58:13 PM]

[PavelA]

I agree with Pgauntlett and vobrien that this should be O.K. Comments given by T.O.LEE are useful and practical as it is the lack of care on the site of exporters to these matters what leads to “inconsistencies”.

Pavel Andrle

[larryBacon]

The initial posting did not make clear whether the B/L was required by the L/C to be consigned to order of the bank or directly to the bank. This has not yet been clarified. We have assumed that it is to order, but if not, it changes everything.

Pavel Andrle makes a sweeping statement about exporters' lack of care leading to inconsistencies. As one who has experience of working as an exporter, an importer and in the L/C depts. of banks, I reckon that the cause of inconsistencies in presented documents is shared between all three, but the greatest percentage of inconsistencies tends to lie in the drafting of the L/Cs themselves.

I was recently consulted by an exporter who asked me to check an L/C received. This contained a total of 21 items which required either amendments or clarification. At least some of the inconsistencies should have been spotted by either the issuing bank or advising bank. One of these involved different terms of shipment quoted within the same L/C.

[T.O.Lee]

ABUSE IN USE OF TERMINOLGY

We are not with Laurent this time. From our understanding of the query, there is no difference in our answer if the B/L is consigned

(1) “To Order” and blank endorsed,
(2) “To order of the issuing bank”,
(3) “To the issuing bank” or
(4) “To any person other than the applicant”

The alleged “discrepancy” or “inconsistence” lies in the fact that the name of the “consignee” is different in the B/L (being the issuing bank) and in the invoice (being the applicant).

All these are the by-products of abuse in use of terminology. A transport term “consignee” is now being mis-used in a non-transport document, the invoice. The right terminology in the invoice should be “buyer” or simply “applicant” to end such confusions.

THE ULTIMATE SOLUTION

Deeming this not as a discrepancy, as suggested by the opinions of the ICC Banking Commission is not the ultimate solution. Putting this "Well, it is OK" in the UCP 700 is also not the ultimate solution. Educating practitioners not to abuse terms is the ultimate solution.

Otherwise today we have "consignee", tomorrow we may have “shipper” (a forwarder) in a B/L being different from "shipper" (a beneficiary) in the invoice. Should we again try to put this "Well, it is OK" in the UCP 700? Should we again issue another ICC opinions for this? There is no ending. This would only make the courts of law and the DOCDEX busier.

In fact whilst we were in Hong Kong, the same old problem arose from the Form C, Commonwealth Preference certificate, certificate of origin and the like. Alerted by us, the Hong Kong General Chamber of Commerce requested us to talk to the authorities from China to change the terminology used in these certificates of origin but before they came, we had already moved our operations to Toronto.

From http://www.tolee.com

[edited 8/31/01 5:04:33 PM]

[larryBacon]

I would agree with T.O. Lee that there may be a misuse of "Consignee" in the invoice. I have made the assumption, in the absence of clarification, that the invoice format is that which is commonly used where, in addition to a section reserved for "Consignee", there is another titled "Buyer if different from consignee".

Perhaps Jan Erik, who raised the topic, could clarify ?