An example of a discrepancy that was recently raised by an issuing bank in Singapore:
This bank issued a credit requiring a ‘CERTIFICATE OF ORIGIN’. The beneficiary issued a certificate of origin which was undated. The issuing bank rejected the documents because the c/o was undated, claiming it was ‘standard international practice’ that certificates had to be dated.
Despite a detailed explanation of the baselessness of this discrepancy (it is not a UCP500 requirement, Article 21, it does not affect the legal validity of the document, there is not any need to establish the c/o was issued prior to shipment (Opinion R268) and, if it were ‘standard international practice’ we would -by definition- know of it which we did not) the issuing bank persisted in its erroneous position.
The purpose of my posting is to put on notice bankers -who may mistakenly think to the contrary- that a certificate does not automatically have to be dated in order to be compliant.
UNDATED CERTIFICATE- INVALID DISCREPANCY
-
larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
UNDATED CERTIFICATE- INVALID DISCREPANCY
Jeremy,
you may have been rather hasty in your conclusion. I assume that the certificate of origin in question was a Chamber of Commerce c/o. In which case I would refer you to the Eurochambres "Guide for the issue of certificates of origin and other attestations". In item XI, 7 titled "Period for validity of certificates" it states "A certificate is valid from the date of issue by the Chamber of Commerce........"
I presume that Singapore Chambers follow similar guidelines, but even if not, I suggest that European Chambers are required to do so, i.e. standard international practice. Therefore your sweeping statement regarding the date not being required is at least partially flawed.
I agree that there is no requirement for the date to be prior to shipment.
Laurence
you may have been rather hasty in your conclusion. I assume that the certificate of origin in question was a Chamber of Commerce c/o. In which case I would refer you to the Eurochambres "Guide for the issue of certificates of origin and other attestations". In item XI, 7 titled "Period for validity of certificates" it states "A certificate is valid from the date of issue by the Chamber of Commerce........"
I presume that Singapore Chambers follow similar guidelines, but even if not, I suggest that European Chambers are required to do so, i.e. standard international practice. Therefore your sweeping statement regarding the date not being required is at least partially flawed.
I agree that there is no requirement for the date to be prior to shipment.
Laurence
UNDATED CERTIFICATE- INVALID DISCREPANCY
Laurence,
No, as I said it was a beneficiary issued c/o.
If it had been a chamber of commerce issued c/o then I cannot see that a bank, per sub-Article 13a, would be entitled to take into a/c any guidelines issued by external bodies regarding c/o’s. However, I am prepared to accept that if dating appeared necessary, from the contents of the document itself (alone), to make a chamber of commerce c/o legally complete and binding then lack of dating would be a discrepancy.
Regards, Jeremy
No, as I said it was a beneficiary issued c/o.
If it had been a chamber of commerce issued c/o then I cannot see that a bank, per sub-Article 13a, would be entitled to take into a/c any guidelines issued by external bodies regarding c/o’s. However, I am prepared to accept that if dating appeared necessary, from the contents of the document itself (alone), to make a chamber of commerce c/o legally complete and binding then lack of dating would be a discrepancy.
Regards, Jeremy
UNDATED CERTIFICATE- INVALID DISCREPANCY
As we are now involved in a DC litigation case as an expert witness in which the dating of a certificate is an issue, to respect the local legislations, and to avoid being charged with "contempt of court", please exuse us that we cannot make any comment here, although we love to for this very interesting issue.
We would like to share with our members once the court has its own decision in this regard. But approval from our clients as a customer must be obtained.
http://www.tolee.com
[edited 1/11/02 4:48:58 PM]
We would like to share with our members once the court has its own decision in this regard. But approval from our clients as a customer must be obtained.
http://www.tolee.com
[edited 1/11/02 4:48:58 PM]
UNDATED CERTIFICATE- INVALID DISCREPANCY
Posted by ADMIN on behalf of David Papa
Ftn exporting
UN DATED:Certificate of Origin:
The issuing Bank is clearly wrong...I had a similar
experience with a Bank in China Ten years ago...on
an L/C for 180 Million..I argued and I won..
A VALID CERTIFICATE OF ORIGIN differs greatly in Law
to A DATED CERTIFICATE of ORIGIN..Let me put another
way on a Court ruled matter.A personal Performance
Guarantee issued by a seller then accepted by the
buyer,is valid..if the subsequent contract carried
that a "Performance Guarantee " is to be issued..and
one was issued ,even though it's worthless..The buyer
cannot refuse to challenge the contract,simply on the
grounds that a "BANK ENDORSED PERFORMANCE GUARANTEE"
was not issued...The learned Judge ruled that under
the "Doctrine of Strict Compliance"..A Performance
Guarantee was asked for...as such a PERSONAL one was
given..even though it was wotrthless..it followed the
requirement of the contract...The issuing bank in the
above case was very wrong..
and defeated the requirements of strict compliance in
that..(1)an undated but valid Certificate was
issued..hence eliminating fraud..(2)The requirements
of the credit was filled"A CERTIFICATE of ORIGIN was
ISSUED...Simple
Really...www.ftnexporting.freeservers.com
David Papa
Ftn exporting
[edited 1/18/02 2:17:05 PM]
[edited 1/21/02 9:49:44 AM]
Ftn exporting
UN DATED:Certificate of Origin:
The issuing Bank is clearly wrong...I had a similar
experience with a Bank in China Ten years ago...on
an L/C for 180 Million..I argued and I won..
A VALID CERTIFICATE OF ORIGIN differs greatly in Law
to A DATED CERTIFICATE of ORIGIN..Let me put another
way on a Court ruled matter.A personal Performance
Guarantee issued by a seller then accepted by the
buyer,is valid..if the subsequent contract carried
that a "Performance Guarantee " is to be issued..and
one was issued ,even though it's worthless..The buyer
cannot refuse to challenge the contract,simply on the
grounds that a "BANK ENDORSED PERFORMANCE GUARANTEE"
was not issued...The learned Judge ruled that under
the "Doctrine of Strict Compliance"..A Performance
Guarantee was asked for...as such a PERSONAL one was
given..even though it was wotrthless..it followed the
requirement of the contract...The issuing bank in the
above case was very wrong..
and defeated the requirements of strict compliance in
that..(1)an undated but valid Certificate was
issued..hence eliminating fraud..(2)The requirements
of the credit was filled"A CERTIFICATE of ORIGIN was
ISSUED...Simple
Really...www.ftnexporting.freeservers.com
David Papa
Ftn exporting
[edited 1/18/02 2:17:05 PM]
[edited 1/21/02 9:49:44 AM]
-
larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
UNDATED CERTIFICATE- INVALID DISCREPANCY
David Papa is missing the fine points of this discussion, I fear.
I would agree with him that for an unspecified issuer of the certificate of origin, there is no requirement for it to be dated, but if a Chamber of Commerce c/o is called for, this should be completed in accordance with the Guidelines published by Eurochambres (at least for European Chambers).
Laurence
I would agree with him that for an unspecified issuer of the certificate of origin, there is no requirement for it to be dated, but if a Chamber of Commerce c/o is called for, this should be completed in accordance with the Guidelines published by Eurochambres (at least for European Chambers).
Laurence
-
JudithAutié
- Posts: 195
- Joined: Fri Apr 05, 2019 5:20 pm
UNDATED CERTIFICATE- INVALID DISCREPANCY
Just a word about applying the guidelines for european certificates of origin.
Article 13 does say documents are to be examined using "international standard BANKING practice".
Certificates of inspection also follow strict guidelines for their issuance, (albeit inhouse rules) but do we as bankers have to know and apply them?
As a matter of fact, and as can be seen from these discussion forums (which are often facinating), bankers can't really agree on the international standard banking practices (which is why the ICC has a working group to try to set up some guidelines).
Hopefully the document that will be finally issued some day may clarify such points.
Until then, pity both the overworked document checker and the often disarmed exporter.
Article 13 does say documents are to be examined using "international standard BANKING practice".
Certificates of inspection also follow strict guidelines for their issuance, (albeit inhouse rules) but do we as bankers have to know and apply them?
As a matter of fact, and as can be seen from these discussion forums (which are often facinating), bankers can't really agree on the international standard banking practices (which is why the ICC has a working group to try to set up some guidelines).
Hopefully the document that will be finally issued some day may clarify such points.
Until then, pity both the overworked document checker and the often disarmed exporter.
UNDATED CERTIFICATE- INVALID DISCREPANCY
Judith,
I understand ISBP is undergoing a substantial re-write, but I note the last draft stated:
‘Documents such as transport documents and insurance documents must be dated, but other documents do not necessarily need to be dated.’
The other thing I would say is international standard banking practice -with respect to compliance- must be routed in sound principles, i.e. it must exist for good reasons, if it is likely to be upheld by courts. The argument that all certificates must automatically dated is not -I believe- grounded in any sound principle.
Salutations, Jeremy
P.S. You are right to say it is not a banker's job to be familiar with any particular body's c/o issuing regulations.
[edited 1/21/02 5:10:19 PM]
I understand ISBP is undergoing a substantial re-write, but I note the last draft stated:
‘Documents such as transport documents and insurance documents must be dated, but other documents do not necessarily need to be dated.’
The other thing I would say is international standard banking practice -with respect to compliance- must be routed in sound principles, i.e. it must exist for good reasons, if it is likely to be upheld by courts. The argument that all certificates must automatically dated is not -I believe- grounded in any sound principle.
Salutations, Jeremy
P.S. You are right to say it is not a banker's job to be familiar with any particular body's c/o issuing regulations.
[edited 1/21/02 5:10:19 PM]
-
larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
UNDATED CERTIFICATE- INVALID DISCREPANCY
Jeremy,
I agree with you that there is no standard international practice requiring ALL certificates to be signed.
In your first posting, you said that if there were such a standard, you would be aware of it, but in your last posting you say that "it is not a banker's job to be familiar with any particular body's c/o issuing regulations". As the Eurochambres standard applies, at least to European Chambers, it can be said to be an international standard. Are you saying that European banks should or should not be familiar with such standards ?
Laurence
I agree with you that there is no standard international practice requiring ALL certificates to be signed.
In your first posting, you said that if there were such a standard, you would be aware of it, but in your last posting you say that "it is not a banker's job to be familiar with any particular body's c/o issuing regulations". As the Eurochambres standard applies, at least to European Chambers, it can be said to be an international standard. Are you saying that European banks should or should not be familiar with such standards ?
Laurence
UNDATED CERTIFICATE- INVALID DISCREPANCY
Laurence,
I find your query rather surprising; it makes me wonder if you might be trying to have some fun with me here. Nonetheless, I shall assume not and ‘play a straight bat’ in response.
The use of the term ‘international standard practice’ seems to have caused some confusion. When checking documents the only ‘international standard practice’ with which a banker is concerned is ‘international standard BANKING practice’. Therefore, if the issuing bank was referring to something other than this they were even more in the wrong. It is certainly to what I was referring and I thought it reasonable to assume others to the forum would appreciate this, given the issue in question is facial compliance.
Thus, what I am saying is that:
1. Were it international standard BANKING practice that all certificates had to be dated (the issuing bank’s contention) we would -by definition- know of it.
2. It is generally not a banker’s duty to be familiar with the issuing rules of any particular body, whether they be chambers of commerce or anything else.
I do hope this clarifies matters to your satisfaction.
Regards, Jeremy
I find your query rather surprising; it makes me wonder if you might be trying to have some fun with me here. Nonetheless, I shall assume not and ‘play a straight bat’ in response.
The use of the term ‘international standard practice’ seems to have caused some confusion. When checking documents the only ‘international standard practice’ with which a banker is concerned is ‘international standard BANKING practice’. Therefore, if the issuing bank was referring to something other than this they were even more in the wrong. It is certainly to what I was referring and I thought it reasonable to assume others to the forum would appreciate this, given the issue in question is facial compliance.
Thus, what I am saying is that:
1. Were it international standard BANKING practice that all certificates had to be dated (the issuing bank’s contention) we would -by definition- know of it.
2. It is generally not a banker’s duty to be familiar with the issuing rules of any particular body, whether they be chambers of commerce or anything else.
I do hope this clarifies matters to your satisfaction.
Regards, Jeremy