Credit issued by Far Eastern bank:
1. Requires the presentation of invoices, marine bills of lading and a certificate that copies of the documents had been forwarded to the applicant.
2. Contains the following ‘additional condition’:
‘GOODS PACKED INTO FULL CONTAINER, CONSOLIDATION IS NOT ACCEPTABLE.’
Grateful for DC-PRO subscribers’ views (the more the better) as to whether or not this 'additional condition' is a non-documentary condition. Also, if it is, your views as to what would be necessary to evidence compliance. Your reasoning would additionally be appreciated.
P.S. I have my own, by no means conclusive, views but would prefer not to influence ‘postings’ by expressing them.
[edited 11/22/01 11:47:12 AM]
NON-DOCUMENTARY CONDITIONS
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PGauntlett
- Posts: 153
- Joined: Fri Apr 05, 2019 5:25 pm
NON-DOCUMENTARY CONDITIONS
Jeremy,
You possibly could ignore this condition but it might be risky to do so. I would look for 'fcl/fcl' to appear on the b/l or just a simple addition on one of the ben's docs (such as inv and p/list) stating 'goods packed in full container'.
Regards,
Phil
You possibly could ignore this condition but it might be risky to do so. I would look for 'fcl/fcl' to appear on the b/l or just a simple addition on one of the ben's docs (such as inv and p/list) stating 'goods packed in full container'.
Regards,
Phil
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
NON-DOCUMENTARY CONDITIONS
Phil's advice on acceptability of fcl/fcl is clearcut and positive, but I would also accept negative compliance, meaning that there is no evidence of lcl or groupage shipment.
NON-DOCUMENTARY CONDITIONS
Thank you for these thoughts. I will wait to see if there are other postings, which I hope there will be, before giving my reactions.
[edited 11/22/01 5:21:31 PM]
[edited 11/22/01 5:21:31 PM]
NON-DOCUMENTARY CONDITIONS
MANY WAYS TO CHECK FOR CONSOLIDATION IN A CONTAINERISED SHIPMENT
On top of FCL/FCL, how about CY/CY?
There are lots of ways to verify whether a containerised shipment is made by consolidation or not. Regretably, the DC Pro Discussion Forum is not the right medium to do lecturing on such a technical subject. Sorry for this Jeremy as we have been criticised previously for lecturing in the DC Pro.
http://www.tolee.com
On top of FCL/FCL, how about CY/CY?
There are lots of ways to verify whether a containerised shipment is made by consolidation or not. Regretably, the DC Pro Discussion Forum is not the right medium to do lecturing on such a technical subject. Sorry for this Jeremy as we have been criticised previously for lecturing in the DC Pro.
http://www.tolee.com
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AbdulkaderBazara
- Posts: 256
- Joined: Fri Apr 05, 2019 5:15 pm
NON-DOCUMENTARY CONDITIONS
This is a non-documentary condition. As Laurence stated, negative compliance can satisfy the condition.
[edited 11/22/01 6:30:39 PM]
[edited 11/22/01 6:30:39 PM]
NON-DOCUMENTARY CONDITIONS
In my opinion this condition
'GOODS PACKED INTO FULL CONTAINER, CONSOLIDATION IS NOT ACCEPTABLE.’
is a non documentary condition as (I feel) it can't be clearly linked to either the invoice or the bill of lading required under this credit.
However, it would be very difficult for me to "disregard" this condition.
"Negative compliance" would most likely suffice but the safest option has been outlined already by Phil.
'GOODS PACKED INTO FULL CONTAINER, CONSOLIDATION IS NOT ACCEPTABLE.’
is a non documentary condition as (I feel) it can't be clearly linked to either the invoice or the bill of lading required under this credit.
However, it would be very difficult for me to "disregard" this condition.
"Negative compliance" would most likely suffice but the safest option has been outlined already by Phil.
NON-DOCUMENTARY CONDITIONS
DEFINITION OF NON DOCUMENTARY CONDITIONS
We would define "non-documentary conditions" as:
"Those conditions named in a documentary credit that cannot be checked for compliance solely on the face of the stipulated documents".
If this definition is acceptable, then in the original query, where there is an 'additional condition’:
‘GOODS PACKED INTO FULL CONTAINER, CONSOLIDATION IS NOT ACCEPTABLE.’
IT MAY NOT NECESSARILY be a non documentary condition if it is checked by a document checker who knows about the shipping practice in containerised transport.
CERTIFICATE REQUIREMENT IN DC SHOULD NOT BE ABUSED
And where a condition is named in the DC, it is not ALWAYS necessary to ask for a certificate to that effect. This is only simple common sense.
Do we need a certificate for "freight prepaid" "containerised shipment" or "partial shipment not allowed"?
The beneficiary should not be penalised by the ignorance of document checkers on containerised shipment. To do their jobs well, and also to serve the trading community well (what the banking business is all about) the document checkers should armour themselves with knowledge on other trade practices.
http://www.tolee.com
[edited 11/22/01 9:30:56 PM]
We would define "non-documentary conditions" as:
"Those conditions named in a documentary credit that cannot be checked for compliance solely on the face of the stipulated documents".
If this definition is acceptable, then in the original query, where there is an 'additional condition’:
‘GOODS PACKED INTO FULL CONTAINER, CONSOLIDATION IS NOT ACCEPTABLE.’
IT MAY NOT NECESSARILY be a non documentary condition if it is checked by a document checker who knows about the shipping practice in containerised transport.
CERTIFICATE REQUIREMENT IN DC SHOULD NOT BE ABUSED
And where a condition is named in the DC, it is not ALWAYS necessary to ask for a certificate to that effect. This is only simple common sense.
Do we need a certificate for "freight prepaid" "containerised shipment" or "partial shipment not allowed"?
The beneficiary should not be penalised by the ignorance of document checkers on containerised shipment. To do their jobs well, and also to serve the trading community well (what the banking business is all about) the document checkers should armour themselves with knowledge on other trade practices.
http://www.tolee.com
[edited 11/22/01 9:30:56 PM]
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hatemshehab
- Posts: 220
- Joined: Fri Apr 05, 2019 5:19 pm
NON-DOCUMENTARY CONDITIONS
I personally consider the first part of the condition (GOODS PACKED INTO FULL CONTAINER) as a documentary condition. The stipulation that shipment should be made in container can be directly linked to the B/L. the document checker should make this linkage by simple common sense.
As for the second part, I believe that stepping from the first reasoning the second part should, by implicity, be considered at least quasi-documentary, if you like, but not a non-documentary condition.
Consider the following example where I have read some where in L/Cs literature but cannot exactly remember where.
The L/C called for certificate of origin, under documents required.
Under additional conditions the L/C stipulated that “origin of goods to be xyz origin.
Would you consider this as a non-documentary condition?
Personally I would not, because there is an evident linkage between the document called for and the condition stipulated. The purpose of the certificate of origin is, by definition, to show the origin of goods.
As for the second part, I believe that stepping from the first reasoning the second part should, by implicity, be considered at least quasi-documentary, if you like, but not a non-documentary condition.
Consider the following example where I have read some where in L/Cs literature but cannot exactly remember where.
The L/C called for certificate of origin, under documents required.
Under additional conditions the L/C stipulated that “origin of goods to be xyz origin.
Would you consider this as a non-documentary condition?
Personally I would not, because there is an evident linkage between the document called for and the condition stipulated. The purpose of the certificate of origin is, by definition, to show the origin of goods.
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AbdulkaderBazara
- Posts: 256
- Joined: Fri Apr 05, 2019 5:15 pm
NON-DOCUMENTARY CONDITIONS
Because we can't ignore a condition doesn't make it a documentary condition. Partial shipment not allowed, expiry date of a credit, place of presentation of documents / place or expiry of credit etc are all non-documentary condition but can't be ignored.