linkage

[polterd]

Dear all,
"Da capo maestro!"
We have a new UCP and a new ISBP. All queries, opinions,etc issued prior new UCP and ISBP dates of issue should be declared null and void. Otherwise, Drafting Group should clearly specify which of them are still valid and which are cancelled, in order to avoid any misunderstandings. But doing so, would pass few good years to put everything in order.
I agree with everyone willing to see these opinions and queries deleted/cancelled/dead.
Re linkage, I salute the changes.
Best regards,
Bogdan

[DanielD]

Bogdan,
Despite what I wrote in my previous posting, maybe it would not take that long to update the opinions, queries and so on (we must admit that some are still perfectly valid). If I am correct there are 11 brochures containing queries and opinions. The job could be done by a team of volunteers, each revising a brochure. The outcome would be submitted to the Banking commission and the remaining ones published in one new brochure. The same could be done with the other offcial texts of the BC (decisions, docdexes, ....)
Daniel

[KimChristensen]

Daniel,

Fine idea. I think actually it would be possible too.

Best regards
Kim

[VincentMaulella]

As Jeremy and Kim know, I usually don’t comment on Forum questions, but this is a good question and one that is of interest to me. First, let me say that I’ve enjoyed your exchange at a distance. I don’t recall how many of you were at the Vienna 2006 Banking Commission meeting, the last “open discussion” prior to the major revisions which took place June-Sept 2006 and production of the voting draft for UCP600. The topics of “inconsistency”, “non-documentary conditions” and “linkage” were raised in Vienna but unfortunately, the “discussion” was rather one sided. (There was a clear message to “kill” the Position Papers.) For those not old enough to remember, “linkage” goes back, at least, to ICC Official Opinion R.11 (while dated 1978 and issued under UCP290) I believe still relevant, as the UCP language has not changed materially. That Opinion adopted the standard: “The commission decided that the notion of “consistency” referred to in Article 7 should be understood as meaning that the whole of the documents must obviously relate to the same transaction, that is to say, that each should bear a relation (link) with the others on its face...” *UCP290 Article 7 read in part: “Documents which appear on their face to be inconsistent with one another will be considered as not appearing on their face to be in accordance with the terms and conditions of the credit.” Changing the critical phrase from “not inconsistent” to “not contradictory” is meaningless when many see the words as synonymous and when translated are often the same and those who profess English as first or second language cannot clearly explain if the new standard is higher or lower. Those seeking to disavow old Official Opinions because they were issued subject to UCP500 are correct, except I expect, where the words have not changed as in non-documentary conditions. (How does one phantom a new interpretation and publish and charge for a new Official Opinion if the words haven't changed?) Do we still have “linkage”? I think so. Article 14 e. states: “In documents other than the commercial invoice, the description of the goods, services or performance, if stated, may be in general terms not conflicting with their description in the credit.” Without “linkage” how do you explain “if stated”? In Article 18, how do you explain “correspond”? How about 14.d. and 14.h. As to the words on page 65 of the unofficial Commentary, (thank goodness for little things), perhaps that was just a typo.

[KimChristensen]

Hi Vin,

Thanks for comments – really good!
It does actually seem quite strange that we have (at least) two issues where LC practices apparently have changed although the UCP rule has not. More so it seems that the sources where this “new” practice is described are non-ICC-approved publications respectively the “Commentary on UCP 600” and (it seems from the 7 January posting by Jack Chan) in Gary Collyers FAQ. Awkward indeed.
Surely such situation is not desirable – and one may only wish that either Daniels suggestion is taken in – or a ISBP revision is carried out – either of which to be subject to a voting at the Banking Commission.

Best regards
Kim

[NigelHolt]

As I said in my DCI (V12 N4) article "A major opportunity missed" (where I dwelt specifically on the question of linkage):

‘To achieve a substantive reduction in operational risk, any new UCP has to comprehensively deal with the issues that credits staff are likely to encounter in day-to-day operations, so as to minimize the possibility of dispute with other banks, beneficiaries and applicants as to the correct position regarding a particular credit-related matter or the possibility of making an incorrect decision. This is particularly so in the domain of documentary compliance. In this respect, what is needed is a SINGLE PUBLICATION that goes beyond the current UCP and ISBP.’ [emphasis added]

This would have avoided the problems we are discussing here.

On the question of document linkage, it is quite simple: UCP600 should have had an express provision on the subject saying either it is required or it is not required (my preference); silence is the worst of all worlds.

[edited 1/16/2008 9:26:35 AM]