ICC Digital Library Forum

This is very interesting issue indeed. I thought about it some long time ago and it seemed to me that it was only very theoretical one. I have never come accross this situation in real life. Anyway having this very academical question in my mind, I was aware of the respective ISBP para as mentioned by Karl Mayrl above. So nowadays I would take it as a discrepancy. The ISBP para suggests this outcome.

Re. the very interesting thoughts shared by dear Jeremy. From the practical point of view I would not agree with the statement that the „on board notation“ must be made (apparently) on B/L after it has been issued.

Initialling could be, at least in my view, part of the issuing process, not necessarily later. Noting the document might be also part of „issuance“ of the document.

Whether the B/L is „shipped by pre-printing wording“ or not depends, in my view, on what is written in the appropriate place where the carrier states his statement re. receipt/shipping the goods. So we can have „received pre-printed B/L“ which also has somewhere on the B/L pre-printed wording as „Date Laden on Board“. This would not make the B/L „shipped pre-printed B/L“. The date of issue would be date of receipt of the goods, not shipment (putting the goods on the board) and thus the B/L would require to have also the „Date Laden on Board“ place filled with the respective date „of loading on board“ to become „shipped B/L“. The OBN might be also somewhere else on the B/L instead.

So the question in our case is rather whether the „date of on board notation“ could be also taken as „date of issue of the B/L“ if there is no other date of issue mentioned. I would not go so far. So in my view the B/L is therefore discrepant.

I know that my position might be chalenged as it would be primarily based on ISBP.

Best Regards,

Pavel Andrle

I have always found Far-Eastern Banks (and Far-Eastern Branches of European Banks to be a law unto themselves.

Mark's original post:
"MarkColeman - Australia
Posted 7/17/03 3:59:38 AM | Edit | Delete

We have an L/C that asks for “Full set of clean on board ocean bills of lading made out to order and blank endorsed marked fright prpaid notifying applicant.” Standard request. We are presenting Bills of lading that clearly has a “shipped on board date” but a bank in China are charging us a discrepancy fee because the B/L does not stating an “ISSUE DATE”. The B/L states: “Place of Issue: Melbourne. Date Laden on Board: 12 Jul 2003”. No where else in the L/C does it ask for the B/L to have an ISSUE date.

I cannot find anywhere in the UCP that a B/L MUST have an issue date AND a shipped on board date. What's does everyone else think?


Regards
Mark, Melbourne Australia"

His later clarification:
"MarkColeman - Australia
Posted 7/22/03 12:07:14 AM | Edit | Delete

Re the date being added. It is in the EXACT same type face and printed (by lazer printer) at the exact same time as the rest of the typing on the B/L. It has not been typed at a latter stage. IE after printing. There is no difference between the printing of the shippers name etc, and the “shipped on board date”
Also the bank are only calling one discrepancy of “B/L does not have an issue date”. If, as you say, it is a “received for shipment B/L”, that would be another (big) discrepancy as it asks for a “shipped on board B/L.”

Mark."

MY RESPONSE:
Let's use some common sense:
the LC requirement appears to call for an Article 23 transort document. 23(a)(ii) first 3 paragraphs should resolve this - either it is a "loaded on board" or "shipped on board" BL; OR it is not. IF it is not, then the 3rd paragraph of this article clarifies how the condition may be met. There are several opinions on how the "on board" status may be achieved.

The ISBP attempted to clarify what some people thought was confusing regarding the concept of an issuance dateuse of different terms to mean the same status. The ISBP does NOT alter, amend, etc. the UCP in any manner. It explains how practioners apply the articles of the UCP500.

THEREFORE - it is not necessary to go to the ISBP - unless there is information which has not been revealed to us, the BL would appear to meet the requirements.

Note: the ‘A to Z of international trade’ (ICC Publication 623) is NOT an Official Publication of the Banking Commnission and carries no weight.

I would suggest that if this transaction continues to be a problem, the bank dishonoring the documents be requested to state under which article of the UCP they are rejecting.

Regards,
Don Smith
US

It is interesting to see that ISBP has brought us this lively debate with divergent perspectives from very experienced practitioners on such a fundamental aspect of day to day documentary credit operations.

In particular, I found Pavel’s argument that the B/L is discrepant primarily based on ISBP very interesting. He also anticipates that his position might be challenged for that same reason – this is quite a phenomenon!

I am happy to offer a friendly challenge to his position for the reason that the B/L is not discrepant under an LC issued subject to UCP 500.

From the information provided, the BL complies with UCP 500 sub-article 23(a)( ii) in that the BL indicates that the goods have been loaded on board, or shipped on a named vessel.

I do not see the words “Date Laden on Board: 12 Jul 2003” as pre-printed wording on the bill of lading. I see these words as a notation on the bill of lading that gives the date on which the goods have been loaded on board. As we know in this case the date of the on board notation will be deemed to be the date of shipment.

It is interesting to look at how the preparation and issuance of documents has evolved.

In the past the on-board notation typically provided additional data to a bill of lading by adding a stamp to the document after it had been prepared/typed and at the time when this additional data concerning shipment became available to the carrier or their agent.

Today the process can be quite similar in that the BL is often prepared on a PC with data details of consignor, consignee, vessels, ports, goods description, authentication etc included by way of input on a PC keyboard.

However, the document or data will often remain stored in the computer until the subsequent information or data on the actual shipment becomes available. Then when this additional data on shipment date becomes available, an additional notation will be input through the keyboard with the final result of the bill of lading being printed out and authenticated to fulfil the commercial role for which it was intended.

Let’s look at ISBP.

ISBP requires that “Drafts, transport documents and insurance documents must be dated even if a credit does not expressly so require”

Does this mean we now have a new ISBP dating requirement that is in addition to the requirements of UCP??

NO.


UCP requires that bills of lading indicate that goods have been loaded on board or shipped and provides for determination of the date of shipment by examining the document. In simple terms, the bill of lading must evidence a date of shipment. This means that the document must be dated – as is also required by ISBP.


It would indeed be most unfortunate if ISBP lead to any uncertainty or induced banks to reject documents which would otherwise have been accepted under documentary credits issued subject to UCP.


"In all mercantile transactions the great object should be certainty: and therefore, it is of more consequence that a rule should be certain, than whether the rule is established one way or the other. Because speculators in trade then know what ground to go upon": Vallejo v Wheeler (1774)

Old advise but sound advice.

As the documentary Credit is a “definite undertaking ” of a bank then hopefully we can advance towards increased certainty in this definite undertaking- and avoid uncertainty rather that accepting it.

Hope this adds to an interesting debate.

Vin

Although I agree completely with Vincent's conclusion, he has not addressed the original question which was about the supposed requirement of a separate issue date on the B/L.

Laurence

Laurence

Glad you agree completely with my conclusion.

The original question raised by Mark Coleman concerned a Chinese bank raising a discrepancy and “charging us a discrepancy fee because the B/L does not stating an “ISSUE DATE”. The B/L states: “Place of Issue: Melbourne. Date Laden on Board: 12 Jul 2003”. No where else in the L/C does it ask for the B/L to have an ISSUE date.”

In my reply I addressed the practical question of whether the discrepancy was valid or not, clearly showing that the discrepancy is not valid and clearly showing why the discrepancy is not valid based on the application of the rules, that is UCP 500.

Vin

Dear Vincent,

Yes, I have expected that my argument might be challanged.

I know that there is nothing in UCP 500 to support my view, but I have found that ISBP suggests my outcome. UCP 500 are “contract terms” of L/Cs, ISBP are meant just to help them to be rightly interpreted. However there are some provisions in ISBP which cover issues not covered by UCP 500 or lead or might lead to different outcome.

In my opinion UCP 500 does not cover the issue whether the transport documents, insurance documents and drafts must be dated. Maybe there is misunderstanding on my part what it means that documents must be dated. I have thought that it means that “the documents must show the date of issue”.

I understand that the meaning of the phrase “date of a document” might be different in different situations, for instance when we say “B/L date”, we mean date of shipment (which might be the same as the date of issue).

I agree with your opinions re. "on board notation”, “the way B/L is being issued nowadays” entirely. From your comments I understand that you believe that the sentence: “Drafts, transport documents and insurance documents must be dated even if a credit does not expressly so require.” actually means that in case of transport documents they must show date of shipment as article 23 of UCP 500 requires.

So, you are saying that in case of the bill of lading, the subject of this query that a separate issuance date is not required.

I can accept your position in the context of the actual question posted about the bill of lading …..but this begs another question.

What would provision of ISBP mean in case of insurance documents? From UCP 500 I would understand therefore (if your approach is correct) that the insurance documents do not need show the date of issue if they show the date from which the cover is effective. Is it correct?

As I said above I did not think about it before because I have come across - as far as I remember - to only transport documents, insurance documents which evidenced date of issue.

With best regards and thanks for your futher expert explanation.

Pavel Andrle

Pavel

Ok.

The fact that I am some 10 years older than you with very little grey or other hair left may add to the impression that I provide expert explanation but don’t believe it.

In documentary credits as most interesting things in life one is always a learner - nothing more but also nothing less.

Having given a complete and precise answer to the original practical question posed concerning the claimed discrepancy both you and Laurence seem pretty determined to extract from me my view as to whether or not a bill of lading or as you have just raised an insurance document requires a separate date of issue or issuance date.

Here is my answer, once again complete, precise and hopefully nice!

Bill of Lading
The bill of lading does not require a separate issue date to comply.


Insurance Document
An insurance document does not require a separate issue date to comply.

If the insurance document bears a date of issuance on or before the date of shipment then that is fine, it is acceptable and indeed nice and tidy. However, this is not essential for compliance as if it appears from the insurance document that the cover is effective on or before the shipment date then that also satisfies the compliance requirement

Hope I have been clear.

Regards

Vin

Dear Vincent,

one more question - if you feel UCP is so clear in this regard then why do we now have additional paragraphs of ISBP 'to clarify it' (and possibly confuse myself and maybe some others too)?

With Regards,
Pavel Andrle

Pavel,

in both B/L and insurance document there are key dates. In the case of the B/L it is the date of shipment; in the insurance document it is the date of cover.

Thus if a B/L is issued with a date of shipment, but no date of issue, it is not that important for L/C purposes. The reverse would not be true for L/C purposes, unless the wording of the B/L indicated otherwise (shipped i/o received B/L).

If an insurance document is issued with a date of commencement of cover, but no date of issue, again for similar reasons, it is not so important, but that date must be on or before the date of shipment.

However, an insurance document with an issue date only is taken as cover commencing on that date. Therefore in this case the date would have to be on or before date of shipment.

I hope that this is more precise and lucid than Vincent's explanation.

Laurence