ICC Digital Library Forum

ISBP addresses the matter of misspellings and/or typing errors with regards to words or sentences (article 23). However often there are typing errors in either the beneficiary's or applicant's address which appear insignificant enough yet are considered a discrepancy. An example is a street name appearing in the credit as "hongchon" yet the beneficiary's invoice cites it as "honghon".
Would any of you consider calling this variance to the credit as a discrepancy and not honouring documents as a result of it?
ICC500 article 37a states that "the invoice must appear on its face to be issued by the beneficiary named in the credit" and "made out in the name of the applicant".
Would one include the address as part of the "name"? ISBP states that the "telex or fax numbers etc forming part of the address, need not be present or, if stated need not be identical to that in the credit". Also the postal code may be incorrect according to ICC Opinion R209. So…with all of these variances being allowed, what about the actual address not being identical?

Without liability/responsibility, personally:

There is no UCP requirement for the address of a beneficiary or applicant to appear on a document. Also, I do not believe there are any grounds for regarding the address as part of the relevant party’s name. Therefore, if an address is quoted in a document, I believe any address may appear (even one in a completely different country). Accordingly, unless the credit itself requires a particular address to appear, I do not see how a bank can raise as a discrepancy any difference in or -absence of- the address quoted in the credit of the applicant or beneficiary (unless it is a requirement of the law to which the credit is subject).
[edited 1/8/03 2:57:56 PM]

without responsibility/liability

I noted that in the first three drafts of the ISBP, beneficiary's address "need not be stated, or if stated need not be identical to that in the credit". Only in the fourth and final draft was this taken out (unfortunately, in my opinion). The reason that was quoted to me was that the address was a way of identifying the beneficiary, since in certain countries, there could be more than one company with the same name (for example in various states or provinces each having their own commercial registry).
The same sentence was taken out of the paragraph concerning the applicant's address, which to me seems not pertinent to the argument concerning the beneficiary's address. After all, the issuing bank is certainly able to identify their applicant (altho for customs or tax purposes there might be a difficulty with an entirely different address for the applicant).

In this particular case, I would think that the difference could be attributed to a typographical error, and would be acceptable as such (however, not be fluent in Chinese, could there be another address with such a spelling?).

Also we run into problems with the "translation" of names and addresses from a language not using the same alphabet. Working constantly with arab countries, this is one of our problems in our bank. We have never had any refusals with such a slight difference in an address.

And happy new year to all.
Judith

I would accept the document as tendered. Looking at past ICC opinions the Banking Commission have taken a lenient approach to typo errors (which I believe the above to be) and this has now been enshrined in ISBP.

Philip

Misspellings and/or typing errors in the beneficiary's/applicant's address would be acceptable.
However different address, such as street or even country name is taken as discrepancy by many banks. In our country – Czech Republic – it is quite common that companies have the same name but different address. So the address is the only difference to recognize the correct party. Similar situation is in Austria for instance.

Pavel Andrle

Without liability/responsibility:

‘Banks must examine all documents …… to ascertain whether or not they appear, ON THEIR FACE, to be in compliance with the terms and conditions of the Credit.’ A banks duty, with respect to determining documents compliance goes no further than that under UCP. Therefore, I cannot understand why a bank should go beyond this by concerning itself with whether facially compliant documents have -as a matter of fact- been actually presented by (or on behalf of) the beneficiary named in the credit, or are actually addressed to the applicant named in the credit, even if in the relevant country there can be more than one ‘company’ with the same name (that is unless the law governing the credit entitles/obliges it to do so). This is simply not a requirement of the UCP.

Also, if there are countries where there can be more than one ‘company’ with the same name, presumably one could have different companies with the same name at the same address anyway? (Not that I regard this as being material to the central principle in question.)

Therefore, to me, there is absolutely no basis in the UCP for a bank to concern itself with the applicant or beneficiary address details and therefore for raising ‘discrepancies’ with regard to addresses (unless covered by the express terms of the credit or the law governing the credit). Finally from a practical point of view, I would also observe that this non-UCP mandated approach to addresses simply increases the (invalid) discrepancy rate, thus further increasing banks’ costs and undermining the credit as a method of settlement.

In summary, I would say to those who say that there may be more than one company with the same name in a given country: ‘So what?’
[edited 1/9/03 3:41:37 PM]

Jeremy, you are absolutely correct in your statement that the documentary credit instrument is undermined by the calling of invalid discrepancies. The named discrepancy of misspellings/typing errors and even a completely different address to that shown in the credit is a perfect example of this. The all important article 14b (...ON THEIR FACE...) does not appear to be adhered to on a continual basis. All too often banks get involved in the "what if" game (even though we deal only in documents ON THEIR FACE) and consequently end up naming dubious discrepancies which cannot be backed by ICC500. Despite this being true, negotiating banks who follow the ICC500 are unfortunately at risk with issuing banks who do not and end up leaving themselves open to loss.
JudithAutié I agree that it is a shame that the early versions of ISBP did not keep the version that the address “need not be stated, or if stated need not be identical to that in the credit”. It would have made it clear beyond a doubt to everyone that the addresses are irrelevant to the party names. In simple terms and on a personal level, we are who we are irrelevant of our address. The same applies to corporations/companies and we should not get involved in addresses.

Dear colleagues,

I share your views but I must also admit that the practice of many banks in many regions in the world differs to your interpretation. We have discussed this issue very deeply within our ICC Czech Republic Banking Commission. I have not come accross an opinion from my colleagues that the completely different address, for instance street name and/or country name, would not be taken as discrepancy. Our practice with many banks from abroad is very similar.

The problem is, in my view, with the interpretation of the article 37(a). Banks argue that if the address is different, the invoice does not appear on its face to be issued by the Beneficiary named in the Credit (or made out in the name of the Applicant) as it might be another Applicant or Beneficiary. I am not sure what is the requirement of the law but because of the possibility that it might be different party (as explained above) banks follow strict compliance in this respect.

The fact that the first versions of ISBP were very specific re. this issue but the last version does not contain the leeway you suggest is also important aspect which should be taken into account. ICC Banking Commission and respective National Committees simply could not agree on this – so it was left out.

Best Regards,

Pavel Andrle

simonj,
I would not consider a misspelling or a typing error in the beneficiary’s/ applicant’s address as a discrepancy. However, please note that the conclusion of R209 states that it “is only applicable to this specific query”.

JudithAutie,
You mentioned that you are constantly running into problems with the “translation” of names and addresses and you made reference to Arab countries. Could you please elaborate further on this?

Dimitri

Without responsibility/liability:

I have read the new comments on this interesting and controversial topic.
Article 37a refers to the beneficiary “NAMED” in the credit. The addresses provided in credits serve the purpose of facilitating advising banks in their locating beneficiaries in order to advise them of the credits. Let us suppose for arguments sake, the beneficiary has offices in various cities in the same country. It is one of those office’s that is doing the shipping and invoicing of the goods. Now how would that change the beneficiary “NAMED” in the credit? I use this example to further illustrate the point that the address does not make the beneficiary however, the NAME must be as shown in the credit. The purpose of all addresses are for communication purposes not Identity purposes.

PavelA

As I mentioned in an earlier comment, although a presenting bank may check
documents “on their face” they are always confronted by issuing bank’s who
have their own version of what constitutes a discrepancy. Unfortunately many banks are uncomfortable with checking documents ON THEIR FACE based on ICC500, and
now ISBP, and therefore end up calling invalid discrepancies which defeats the
integrity of the documentary credit instrument resulting in buyers/sellers turning to other less complicated means of payment in order to avoid the frustrations created by bankers. We are responsible for our own demise!
Would you call it a discrepancy if the address were not shown?