ICC Digital Library Forum

Hi,
What data would be considered under ''content appears to fulfill the function of the required document'' if a credit calling for a copy of a TD does not explicitly state the details to be shown on it. Like all SWIFT LCs, there is data in fields 44E, 44F, 44C and 45A.
Regards
Jason

The ''content appears to fulfill the function of the required document'' is also referred to under Para 41 of ISBP 681 and Para 43 of ISBP 645. My understanding, in relation to your posting, is that the content of the transport document need to refer to transportation of goods.

In this regard, I know that many people may not agree with me but I would link the information in field 44C, 44E, 44F & 45A to the copy of the transport document (TD) and would not accept a copy of transport document that contains data inconsistent with the details in these fields.

Best regards
Abdulkader

Dear Jason and Abdulkader,

… now … we have been through this recently – so I will only say the following:

If you are about to issue an LC calling for a “copy of B/L” – which is by definition – not a transport document for the purpose of UCP – AND at the same time want to use swift fields directly linked to transport documents … then you should stop … and think twice what it is that you want to achieve … and then say so exactly under the LC requirements for the “copy of B/L”.

Best regards
Kim

Dear Kim,

Though I don't want to come back on this issue again, I just want to say two things:

1) I would agree with you if I am the one who will issue the letter of credit. I will always try to avoid areas of controversies.

2) Where the LC is in the form stated by Jason, I am sorry to say that I disagree with you. I would not venture to accept a copy of TD with data in conflict with the LC.

This would be my last posting on this issue. -:)

Best Regards
Abdulkader
[edited 7/4/2007 1:44:08 AM]

Dear Kim
I agree with AbdulKadeer as we are never the ones to open such lCs but always on the receiving end. My intention here is to avoid beneficiaries from being aware that copies of TD are not checked. Else when we receive copies banks will end up paying benes for goods that have never been transported from one place to another and you know the trouble faced in getting back funds against a fraud or a Issuing Bank refusing to pay.
Regards
Jason

Like Abdulkader I don't want to come back on this issue again. However a general observation, if a ‘condition’ is a ‘non-documentary condition’ it must -per 15(h)- be ‘deem[ed] ... as not stated’. If something is deemed not stated it cannot, by definition, be ‘data … in the credit’ per 14(f).

Jeremy,
I am getting your point and have to assume that the Swift fields I had earlier mentioned have to be ignored. My question was, what is the data on the document that needs to be looked at? Do I ignore everything on the doc including the description of goods and the place of discharge which may be any country other than mentioned? In other words even a copy B/L which has no relevance to the transaction/LC has to be accepted under such an L/C as the main contents are deemed to be not stated.
Regards
Jason

Dear Jason,

I think it is actually a good question – and I guess that you could ask about the “function” for a number of documents presented. I mean the example given in ISBP (2007) paragraph 41 (packing list versus packing note) is one that even bankers can understand – but it may be hard to apply to many other documents – where you (or perhaps rather: “I”) do not fully understand the actual purpose of the document.
So in this case I would check if the specific LC requirements have been complied with – and that it otherwise looks like a B/L – and have some kind of “link” to the case in question…

… and then I do not understand the lack of desire to discuss these “non documentary conditions” versus shipment requirements versus non-transport documents … to me these discussions have really proven that there is a lack of “international standard banking practice” here … and no matter what outcome … any outcome would be for the benefit of all of us.

Best regards
Kim

Hi Kim,
Thanks for understanding and I agree with you on the lack of desire part.. The NDC can be interpretted differently. Egs are Origin of goods not calling for a C.O. and some doc presented states some country other than what is mentioned in the LC. Why should this be acceptable?What puzzles me is why do I only require a C.O. to prove/disprove the origin, just because the doc is titled so. After all what is more important is the declaration made.Another NDC, shipment to be effected in Containers. In the first case I would accept if the origin is not mentioned on any doc but would I accept a TD that does not evidence a Container shipment? There are 2 sides to the NDC, some for and some against. Which is correct?
Regards
Jason

Dear Jason,

I think that I actually agree with you more than you think.

On this issue of “non-documentary conditions” I have become – I guess you can say – a bit stubborn.

The reasons are the following:

The interpretation of UCP 500 article 13,c is based on position paper no. 3.

During the drafting process – all four position papers were taken into account:
The issue dealt with in position paper no. 1 (amendments) is handled in UCP 600 article 10,f.
Negotiation in position paper 2 – has been considered for the new “definition” of Negotiation in UCP 600 article 2.
Position paper 4 has later been “modified” through a number of ICC opinions – and the wording in UCP 600 on of how the transport documents should be signed is expected to stand by itself – perhaps together with relevant ISBP paragraphs.

So my point is that if the LC community wanted the position reflected in position paper no. 3 on non-documentary conditions also to be the practice under UCP 600, then that should (would) have been included into the UCP 600.
Please also bear in mind that the interpretation of UCP 500 article 13,c as found in position paper no. 3 – is rather wide – you may even say “conflicting” with a literal reading of 13,c.

In addition to the above, I want to direct attention to the introduction of UCP 600 which reads:

QUOTE
The four Position Papers issued in September 1994 were issued subject to their application under UCP 500; therefore, they will not be applicable under UCP 600.
UNQUOTE

Therefore my view – at this point in time – is that UCP 600 article 14,h should be read literally – without applying the principles as reflected in position paper no. 3.
I think that the signals sent are very clear – so although the wording reflected in UCP 600 article 14,h is almost identical to UCP 500 article 13,c – a change in practice must be anticipated. I dare not say exactly how this “new” practice will be – but I would expect some change in practice.

Interesting to see of course what the “UCP 600 commentary” has to say about this

The above view is mainly meant as a theoretical statement – hoping that such will help create a good and “easy to apply” practice (unlike position paper 3) as soon as possible.

So coming back to my opening line …. Notwithstanding the above I would also be very reluctant to just disregard any kind of non-documentary conditions. I mean: they have been added to the LC for some reason – and simply disregarding them may (no matter how right you turn out to be) be a major source for problems – and since I would not be sure what the UCP 600 practice would be – I would be even more careful.

This will be my last posting on this issue for some time, as I am leaving on vacation today – and am looking forward to 3 weeks away from e-mails and internet (so you can relax now)

I wish you all a very nice summer.

Best regards
Kim