ICC Digital Library Forum

I have just read ‘educational’ opinion TA727(ED) and to say that my blood is [metaphorically] boiling is understatement. As it will not be subject to revision I am logically at liberty to comment on it now.

What forces me to comment on it is that the fundamentally flawed views of the national committee expressed in the query have been agreed even though they plainly –to anyone that actually understands UCP600 and has bothered reading past opinions- go against sub-Article 14(l), the relevant transport articles and ICC Opinion TA 572 (which cannot be other than of equal applicability to UCP600 as UCP500).

I will not reproduce all its contents and leave you to examine them yourselves but comment on those aspects of it that are 100% wrong. The enquiring NC says that:

1. “Forwarders bill of lading is not acceptable”, or “Transport documents issued by freight forwarders not acceptable” means that “the credit is prohibiting the transport document being issued on the letterhead of the forwarder”.

2. “Transport documents issued or signed by freight forwarders not acceptable” means that not only the credit is prohibiting the transport document being issued on the letterhead of the forwarder but also that “the document must also be signed by a party acting as carrier or master and not a party as agent for either of them”. (How, it could be thought that the term “freight forwarder” could be extended to any agent is beyond me.)

Both of these views are completely wrong because as in signing as carrier or as agent of the carrier the document concerned will have been issued by or on behalf of a carrier and not a freight forwarder, even if it is apparent from the document that the carrier is ALSO a freight forwarder (as was the case in TA572). This should have been the clear message given. Furthermore, it should have been stated that if an issuing bank wishes to override the provisions of sub-Article 14(l) and the signing requirements of the relevant transport article they must be much more specific. For example:

‘Transport document signed as carrier by a party that is also a freight forwarder is not acceptable.’

‘Transport document signed by an agent of the carrier by a party that is also a freight forwarder is not acceptable.’

‘Transport document signed as carrier or by an agent of the carrier that is also a freight forwarder is not acceptable.’

Overall, that this opinion has been given is appalling and casts a very bad light indeed on the system of ‘educational opinions’.
[edited 8/25/2010 9:04:57 AM]

Following on from yesterday:

1. what the the reply to the NC should have said is that to prohibit 'freight forwarder' issued documents is meaningless, as UCP600 prohibits them because it only permits 'carrier' transport documents.

2. the documents in cases A - D are acceptable in all instances in the examples 1 & 2 given in the conclusion.
[edited 8/25/2010 10:43:52 AM]

Furthermore, does not para 95 of ISBP95 recognise that the term 'Freight forwarders' bill of lading' means a BL signed by a freight forwarder in the capacity of freight forwarder?

(Once I think I have thought of everything I shall provide a consolidated posting.)

Jeremy,

Calm down. There is no point in damaging your heart and arteries. Let us get a bit further. TA727 is just one example. There are others which evidence that there is something wrong in the system. System which is maybe out of control because it is getting really too complicated. It is nobody's fault but my opinion is that documentary credits should be reconsidered entirely.
I do not think we can go on like that for long
Regards
Daniel

Daniel,

I try to inure myslef to the absurdities that pervade the world of documentary credits but the egregious nature of this particular one was, and is, just too much for me.

Best regards, Jeremy

Jeremy,

I would not worry too much. Everybody makes mistakes. Hopefully it will be corrected. I am more worried about the fact that we have now (among other texts) 735 opinions. Opinions about 600 started with 629 (I think) and this despite the fact that 600 were supposed to be simpler and that we have ISBP. It is where something is wrong.
Regards
Daniel

I must admit that I spilled my coffee when I read this one. And I should add that I like coffee a lot – so altogether this did not leave me in a good mood …

It does indeed seem extraordinary Kim that this opinion could ‘reflect the view(s) of the ICC Banking Commission’s officers’. If this is really the case one has to wonder strongly if they should continue to occupy their positions.

Dear Jeremy,

That would not be for me to judge

I guess that I have a slightly different take on this: It may well be that people wiser than me have seen things that I have not seen – and perhaps want to “move” this to a better direction… perhaps even “preparing” for a fundamental change of this in the new ISBP …
The problem here is that the vehicle for doing that (assuming that is the case) is these “Educational Opinions” that you are not to comment upon. This opinion – and for that matter TA.725(ED) seems are to me highly controversial – not following the practice laid out so far. These opinions simply screams for discussion and comments, and my view is that people with access to give comments via any channel should not hold themselves back …

Have a nice day.

Kim

Agreed Kim that there also obvious (to anyone with any great knowledge of doc. credits, UCP600 etc.) problems with some of the other 'educational queries' and, although up and running for only a short time, it seems that the system of 'educational queries' will have to be abandoned if it cannot be guaranteed the 'opinions' given will be 100% correct.