Field 45a of a Mt 700 swift format indicates:
100 tm soya bean oil at USD ..../TM
TERMS OF DELIVERY: CIF....
ANALYTICAL REQUIREMENTS:
....
....
....
Doccred calls for a Commercial Invoice in duplicate, Full Set 3/3 Marine b/l and Inspection Certificate in duplicate.
Beneficiary presents Commercial Invoice containing as a goods description the same as under field 45A with exception of including Analytical Requirements.
Analytical requirements are indicated
in full (as per indicates in field 45A) on Inspection Certificate.
The question is:
1) Could be considered discrepant the lack of analytical requirements in Commercial Invoice since Art. 37 c of UCP 500 indicates: "The description of the goods in the Commercial Invoice must correspond with the description in the credit".-
2) Art. 37C says MUST CORRESPOND, it does not say MUST BE EXACTLY THE SAME.-
Can I have your views on this matter ?
Description of goods in Commercial Invoice
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JuanQuevedo
- Posts: 3
- Joined: Fri Apr 05, 2019 5:18 pm
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hatemshehab
- Posts: 220
- Joined: Fri Apr 05, 2019 5:19 pm
Description of goods in Commercial Invoice
1. In a documentary credit every document called for serves a purpose and therefore has it peculiarity over the other. The bank when establishing the L/C does not expect the beneficiary to surrender three documents only in lieu of six documents called for in the L/C claming that these three are “sufficient and serves the purpose of the six.”
Therefore it goes without saying that the documents are valued for what it represents on its own; that is to say the content of the document must be as per credit terms and conditions. after all a document is not the paper and the letterhead but the data that is included therein which makes a doument.
Accordingly if we require certain data to appear on inspection certificate, the inclusion of this same data on the packing list will not serve the purpose for too many reasons least of them is legal effect of these data appearing on the packing list rather that on the inspection certificate, the effectives and sufficiency of the inspection certificate in the market place if the applicant wants to dispose of the goods to another buyer or if certain regulations imposed by authorities has to be complied with, the status of the issuing party of this particular document,and so forth….
2. Article 37c states correspond not exactly, but correspond does not mean that cetain data should be sacrificed.
The use of word "correspond" is to give tolerance for more details that do not contradict the terms and conditions of the credit not to curtail the description of goods appearing in field 45 a.
As you know, commercial invoices are often issued with more details on goods than what is stated in L/C hence the word “CORRESPOND” should be interpreted to refer to “close similarity between separate things” or to “have comparable elements”
This close similarity between the narrative in field 45a and the commercial invoice is not there as major elements have been lifted notwithstanding that these elements are indicated in the inspection certificate.
Although, the bank may consult his applicant if he is satisfied with this presentation and whether the applicant can manage with these documents, this remains an issue outside the L/C mandate and a bank –costumer relationship.
3. If you think that article 37c does not use the word "exactly" as you say in your query, just ask yourself this question. Who will be able to decide what enough data to be included in the commercial invoice? How would you be sure that this much information is enough and let us forget about analytical specifications?
Commercial invoice should reflect the description of goods as stated in L/C FIELD 45A
In brief I consider this as discrepancy.
4. EXCESSIVE DESCRIPTION SHOULD BE DISCOURAGED
Bankers should always remember that excessive details in description of goods give rise to problems. The will place an undue burden on all the parties involved in L/C
I here below quote the late master Bernard Wheble for what he has to say on excessive details.
“The problem that the demand for the inclusion of excessive detail usually originates with the applicant for the credit, often in the mistaken belief that he is thereby protecting himself. This is rarely so: in fact the more complicated the credit, the more likely it is to give rise to problems. The way to avoid fraud is to avoid dealing with a rogue, rather than to deal with him and hope to prevent a fraud by a mass – or “mess” of detail.”
THE ABOVE QUOTATION IS TO SERVE AS A GUIDLINE FOR THE DISCREPTION OF GOODS AND NOT TO UNDERMINE THE INCLUSION OF "ANALYTICAL REQUIREMENTS” CONTAINED IN YOUR L/C.
Hatem Shehab
[edited 9/3/01 7:42:31 AM]
Therefore it goes without saying that the documents are valued for what it represents on its own; that is to say the content of the document must be as per credit terms and conditions. after all a document is not the paper and the letterhead but the data that is included therein which makes a doument.
Accordingly if we require certain data to appear on inspection certificate, the inclusion of this same data on the packing list will not serve the purpose for too many reasons least of them is legal effect of these data appearing on the packing list rather that on the inspection certificate, the effectives and sufficiency of the inspection certificate in the market place if the applicant wants to dispose of the goods to another buyer or if certain regulations imposed by authorities has to be complied with, the status of the issuing party of this particular document,and so forth….
2. Article 37c states correspond not exactly, but correspond does not mean that cetain data should be sacrificed.
The use of word "correspond" is to give tolerance for more details that do not contradict the terms and conditions of the credit not to curtail the description of goods appearing in field 45 a.
As you know, commercial invoices are often issued with more details on goods than what is stated in L/C hence the word “CORRESPOND” should be interpreted to refer to “close similarity between separate things” or to “have comparable elements”
This close similarity between the narrative in field 45a and the commercial invoice is not there as major elements have been lifted notwithstanding that these elements are indicated in the inspection certificate.
Although, the bank may consult his applicant if he is satisfied with this presentation and whether the applicant can manage with these documents, this remains an issue outside the L/C mandate and a bank –costumer relationship.
3. If you think that article 37c does not use the word "exactly" as you say in your query, just ask yourself this question. Who will be able to decide what enough data to be included in the commercial invoice? How would you be sure that this much information is enough and let us forget about analytical specifications?
Commercial invoice should reflect the description of goods as stated in L/C FIELD 45A
In brief I consider this as discrepancy.
4. EXCESSIVE DESCRIPTION SHOULD BE DISCOURAGED
Bankers should always remember that excessive details in description of goods give rise to problems. The will place an undue burden on all the parties involved in L/C
I here below quote the late master Bernard Wheble for what he has to say on excessive details.
“The problem that the demand for the inclusion of excessive detail usually originates with the applicant for the credit, often in the mistaken belief that he is thereby protecting himself. This is rarely so: in fact the more complicated the credit, the more likely it is to give rise to problems. The way to avoid fraud is to avoid dealing with a rogue, rather than to deal with him and hope to prevent a fraud by a mass – or “mess” of detail.”
THE ABOVE QUOTATION IS TO SERVE AS A GUIDLINE FOR THE DISCREPTION OF GOODS AND NOT TO UNDERMINE THE INCLUSION OF "ANALYTICAL REQUIREMENTS” CONTAINED IN YOUR L/C.
Hatem Shehab
[edited 9/3/01 7:42:31 AM]
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hatemshehab
- Posts: 220
- Joined: Fri Apr 05, 2019 5:19 pm
Description of goods in Commercial Invoice
To add value to your relationship with the applicant I suggest that one should take note if the inspection certificate is issued by a party other than the beneficiary. If for example the inspection certificate is issued by Lloyds I as an applicant should be more at ease than when it is issued by the beneficiary. If the two documents are issued by the beneficiary naturally this presentation might raise my alertness (applicant) to reject them from a business point of view. However this is to be decided by the applicant.
[edited 9/3/01 6:11:26 AM]
[edited 9/3/01 6:11:26 AM]
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
Description of goods in Commercial Invoice
I agree with Hatem Shehab's comments both on the necessity to comply with the full description in the invoice and that banks should dissuade excessive detail.
An export client recently sent me a L/C which contained a two page proforma invoice with an instruction in the L/C that description was as per attached proforma. About one and a half pages of this dealt with terms and conditions relating to the contract, rather than the description per se, but the beneficiary was left with no option but to include all of this detail.
An export client recently sent me a L/C which contained a two page proforma invoice with an instruction in the L/C that description was as per attached proforma. About one and a half pages of this dealt with terms and conditions relating to the contract, rather than the description per se, but the beneficiary was left with no option but to include all of this detail.
Description of goods in Commercial Invoice
We wish to make two points only:
(1) Specifications of products should better be stated in an inspection certificate rather than in an INVOICE OR ALSO in an invoice to avoid duplications, and also to be concise.
(2) In drafting of the UCP 500, there are two shools of thinking: "identical" or "correspond". Finally the corresond shool wins because otherwise if the DC uses dark blue ink and Times Roman fonts size 12, the invoice in black C. G. Times size 14 fonts would be deemed as a discrepancy. This is ridiculous and against the intent of DC, to facilitate payment rather than to hinder payment.
We are joining you in New Jersey
From http://www.tolee.com
[edited 9/4/01 2:34:40 AM]
(1) Specifications of products should better be stated in an inspection certificate rather than in an INVOICE OR ALSO in an invoice to avoid duplications, and also to be concise.
(2) In drafting of the UCP 500, there are two shools of thinking: "identical" or "correspond". Finally the corresond shool wins because otherwise if the DC uses dark blue ink and Times Roman fonts size 12, the invoice in black C. G. Times size 14 fonts would be deemed as a discrepancy. This is ridiculous and against the intent of DC, to facilitate payment rather than to hinder payment.
We are joining you in New Jersey
From http://www.tolee.com
[edited 9/4/01 2:34:40 AM]