Vijay, the point is that not only do I not believe ‘we have to consider the fact that the documentary credits issued are to reflect the pro-forma invoices, contracts of sale, purchase orders etc. as agreed between buyer and seller’ but that we, as bankers, are not even permitted to do this when examining documents for compliance. That the terms of delivery agreed between the buyer and seller need not be the same as stated in Incoterms 2000 I therefore regard as being completely irrelevant. Thus, I would not agree -with the greatest respect- with Kim that you had a valid point nor with Judith that the buyer being able prove that the contract was based on another interpretation of CIF would have any bearing on the matter.
As to your question: ‘Are we in a position to judge whether that information is supplementary?’ The answer is ‘yes, of course’ as the information is additional to that required by the credit to appear in the invoice and not in apparent contradiction with it.
Lastly, How Seng (sorry if I’ve mistakenly addressed you by your family name) I do not see that there is any ambiguity in the credit terms.
Regards to all, Jeremy
This posting is made in a personal capacity without any liability/ responsibility on my part exclusively for use in the DC-Pro discussion forum and therefore must not be reproduced or the views expressed therein attributed to me elsewhere with out my prior agreement.
ISBP Para 65
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LeeHowSeng
- Posts: 15
- Joined: Fri Apr 05, 2019 5:19 pm
ISBP Para 65
Thanks Jeremy & Kim
Correct me if I am wrong ,for ambiguity I am actually referring to the Credit, since it only mentioned as CIF , it is the applicant responsibility to ensure the Incoterm ie. in this case referring to 2000 or 1990 which is embedded in the sales contract mentioned correctly in their Credit application . Otherwise applicant would have to bear the risk of any ambiguity arising from their instructions by only stating CIF in the Credit knowing that existence of CIF 1990 & CIF 2000 and what's in their sales contract .
Cheers
Correct me if I am wrong ,for ambiguity I am actually referring to the Credit, since it only mentioned as CIF , it is the applicant responsibility to ensure the Incoterm ie. in this case referring to 2000 or 1990 which is embedded in the sales contract mentioned correctly in their Credit application . Otherwise applicant would have to bear the risk of any ambiguity arising from their instructions by only stating CIF in the Credit knowing that existence of CIF 1990 & CIF 2000 and what's in their sales contract .
Cheers
ISBP Para 65
How Seng,
I appreciate to what you are referring but I fail to see how only mentioning CIF could in any way be considered ambiguous. To me the credit is wholly unambiguous. The trade term quoted must be CIF and that is exactly what has happened in the invoice you quote. The fact that the words ‘Incoterms 2000’ or whatever have been added does not change this in any way whatsoever.
Jeremy
This posting is made in a personal capacity without any liability/ responsibility on my part exclusively for use in the DC-Pro discussion forum and therefore must not be reproduced or the views expressed therein attributed to me elsewhere with out my prior agreement.
[edited 5/5/2005 9:35:45 AM]
I appreciate to what you are referring but I fail to see how only mentioning CIF could in any way be considered ambiguous. To me the credit is wholly unambiguous. The trade term quoted must be CIF and that is exactly what has happened in the invoice you quote. The fact that the words ‘Incoterms 2000’ or whatever have been added does not change this in any way whatsoever.
Jeremy
This posting is made in a personal capacity without any liability/ responsibility on my part exclusively for use in the DC-Pro discussion forum and therefore must not be reproduced or the views expressed therein attributed to me elsewhere with out my prior agreement.
[edited 5/5/2005 9:35:45 AM]
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
ISBP Para 65
Dear Jeremy,
You are of course right, when it comes to the ”relationship” between the sales contract etc. and the LC.
When I still think, that it is not that far out, to look in that direction in this case, then it is based in the APPARENT difference between the terms in the credit (CIF [place]) and the wording in the invoice (CIF [place] as per Incoterms 2000) – which from an objective point of view is not the same. So if you apply the very “strict” interpretation of article 3 (as I read from of your posting), then it seems only natural to apply a similar “strict” interpretation of article 13,a.
I realize this sounds like am I arguing for black when I actually want white
, the point I am making however, is that if you apply this line or arguing, then it should be carried through.
It seems however that the result that we both reach is the same; and I actually came to think of an example – that (if nothing else) helped me to get things clearer in my head:
An L/C stipulates the shipment of 10 cars.
The invoice shows: “10 cars: 5 of them red and 5 of them blue).
I take it everyone would accept that, even though it may in fact be contradicting the commercial contract; and not exactly identical with the L/C wording. So the principle applied here is that we “trust” the document presented, and does not look beyond it; or starts to question it – provided it is not “inconsistent”. We consider it logic – that these cars have colours – and that this is reflected in the invoice, even though not stated in the L/C.
So try to read this example into paragraph 65:
If the credit is specific (Incoterms 2000; / 5 red cars and 5 blur cars) then the invoice must reflect this.
If however the credit is not specific (CIF or 10 cars) then it would be acceptable to apply specific details to the invoice.
Best regards
Kim
The above without responsibility / liability & in my personal capacity.
[edited 5/6/2005 8:55:12 AM]
You are of course right, when it comes to the ”relationship” between the sales contract etc. and the LC.
When I still think, that it is not that far out, to look in that direction in this case, then it is based in the APPARENT difference between the terms in the credit (CIF [place]) and the wording in the invoice (CIF [place] as per Incoterms 2000) – which from an objective point of view is not the same. So if you apply the very “strict” interpretation of article 3 (as I read from of your posting), then it seems only natural to apply a similar “strict” interpretation of article 13,a.
I realize this sounds like am I arguing for black when I actually want white
, the point I am making however, is that if you apply this line or arguing, then it should be carried through.It seems however that the result that we both reach is the same; and I actually came to think of an example – that (if nothing else) helped me to get things clearer in my head:
An L/C stipulates the shipment of 10 cars.
The invoice shows: “10 cars: 5 of them red and 5 of them blue).
I take it everyone would accept that, even though it may in fact be contradicting the commercial contract; and not exactly identical with the L/C wording. So the principle applied here is that we “trust” the document presented, and does not look beyond it; or starts to question it – provided it is not “inconsistent”. We consider it logic – that these cars have colours – and that this is reflected in the invoice, even though not stated in the L/C.
So try to read this example into paragraph 65:
If the credit is specific (Incoterms 2000; / 5 red cars and 5 blur cars) then the invoice must reflect this.
If however the credit is not specific (CIF or 10 cars) then it would be acceptable to apply specific details to the invoice.
Best regards
Kim
The above without responsibility / liability & in my personal capacity.
[edited 5/6/2005 8:55:12 AM]
ISBP Para 65
Kim,
Apart from our not agreeing that “(CIF [place]) and the wording in the invoice (CIF [place] as per Incoterms 2000)” is AUTOMATICALLY “from an objective point of view … not the same”, I believe we are in complete agreement. Funnily enough I thought of quoting an example similar to yours to illustrate my argument but couldn’t be bothered.
Regards, Jeremy
This posting is made in a personal capacity without any liability/ responsibility on my part exclusively for use in the DC-Pro discussion forum and therefore must not be reproduced or the views expressed therein attributed to me elsewhere without my prior agreement.
Apart from our not agreeing that “(CIF [place]) and the wording in the invoice (CIF [place] as per Incoterms 2000)” is AUTOMATICALLY “from an objective point of view … not the same”, I believe we are in complete agreement. Funnily enough I thought of quoting an example similar to yours to illustrate my argument but couldn’t be bothered.
Regards, Jeremy
This posting is made in a personal capacity without any liability/ responsibility on my part exclusively for use in the DC-Pro discussion forum and therefore must not be reproduced or the views expressed therein attributed to me elsewhere without my prior agreement.
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
ISBP Para 65
I wholeheartedly concur with Jeremy's remarks on this.
However, one important aspect has not been sufficiently discussed, namely the lack of provenance of the trade term. When one quotes CIF (named port)without any further information, this could refer to a definition by common practice in a country or countries. Such definitions existed long before any version of Incoterms and have not been superseded.
CIF may also refer to any version of Incoterms.
When the LC quotes CIF without reference to provenence, bankers have no option but to accept any version (Incoterms or not) of CIF profferred in relation to documents submitted.
Laurence
However, one important aspect has not been sufficiently discussed, namely the lack of provenance of the trade term. When one quotes CIF (named port)without any further information, this could refer to a definition by common practice in a country or countries. Such definitions existed long before any version of Incoterms and have not been superseded.
CIF may also refer to any version of Incoterms.
When the LC quotes CIF without reference to provenence, bankers have no option but to accept any version (Incoterms or not) of CIF profferred in relation to documents submitted.
Laurence
ISBP Para 65
Ooer! Next there'll be a blue moon! ;->
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VijayalakshmiK
- Posts: 9
- Joined: Fri Apr 05, 2019 5:28 pm
ISBP Para 65
Kim & Jeremy,
Thanks a lot for sharing your views. I find your arguments very valid.
I had based my argument on the fact that without reference to incoterms terms like 'FOB','CIF' can have all kind of meanings.
Regarding the example you have mentioned. I feel in this case a better example would be an LC requiring shipment of 'leather' and the invoice showing shipment of ‘imitation leather'. Do you think the invoice is acceptable? We can argue both ways.
I will suggest to my customer to remove reference to incoterms, if possible.
Thanks a lot for sharing your views. I find your arguments very valid.
I had based my argument on the fact that without reference to incoterms terms like 'FOB','CIF' can have all kind of meanings.
Regarding the example you have mentioned. I feel in this case a better example would be an LC requiring shipment of 'leather' and the invoice showing shipment of ‘imitation leather'. Do you think the invoice is acceptable? We can argue both ways.
I will suggest to my customer to remove reference to incoterms, if possible.
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
ISBP Para 65
Dear Vijaya
Or for that matter ”imitation Suede” (ICC Opinion TA.564rev)
Great example – that shows the complexity of this. I think however that there is one vital difference between this example, and the one with the cars: Namely that this one “on its face” effectively changes the nature of the goods. Imitation leather is not leather, but cars are still cars whether blue or black – and you would have to check the commercial contract to find out if the cars should in fact have been white and purple, and as Jeremy has pointed out you are not to do that!
So what it comes down to, is not if a piece of information MAY be wrong, but if it appear from the documents/credit to be wrong (inconsistent is of course the correct term).
Why is it by the way, that you will ask your customer to remove the reference to Incoterms?
Best regards
Kim
Or for that matter ”imitation Suede” (ICC Opinion TA.564rev)
Great example – that shows the complexity of this. I think however that there is one vital difference between this example, and the one with the cars: Namely that this one “on its face” effectively changes the nature of the goods. Imitation leather is not leather, but cars are still cars whether blue or black – and you would have to check the commercial contract to find out if the cars should in fact have been white and purple, and as Jeremy has pointed out you are not to do that!
So what it comes down to, is not if a piece of information MAY be wrong, but if it appear from the documents/credit to be wrong (inconsistent is of course the correct term).
Why is it by the way, that you will ask your customer to remove the reference to Incoterms?
Best regards
Kim