How about listing our ideas for the ISBP revision here and having a good old ‘chin wag’ (= conversation) about them? Once I have thought of mine (assuming I do) I will post them. Anyone care to get the ball rolling in the meantime?
Jeremy
ISBP REVISION
ISBP REVISION
OK
To start with par. 77 and similar. Correct as long as the the shipper is not the applicant.
par 177: "franchise" or "excess (deductible)" - with brackets - should be explained and examples given.
Par. 89 and similar. All these paragraphs should be deleted and replaced by paragraphs stating that if an IB does not want to see costs additional to freight, the unwanted costs should be precisely specified.
General: there should be a link between documents.
Daniel
To start with par. 77 and similar. Correct as long as the the shipper is not the applicant.
par 177: "franchise" or "excess (deductible)" - with brackets - should be explained and examples given.
Par. 89 and similar. All these paragraphs should be deleted and replaced by paragraphs stating that if an IB does not want to see costs additional to freight, the unwanted costs should be precisely specified.
General: there should be a link between documents.
Daniel
ISBP REVISION
Thanks Daniel. I am still preparing my own views but some reactions to yours:
Para 77: Yes, I see what you mean but have to admit to surprise that this could occur in practice.
Para 177: Given sub-Art. 28(j) I do wonder why this should be necessary. My main concern is the extent to which a bank must examine the document to identify if this ‘clause’ is present.
Para 89: I agree wholeheartedly that this para is profoundly unsatisfactory. Bankers should not have to understand or take account of specialist shipping jargon.
Link between documents: I find this ‘interesting’. On the one hand one has the UCP600 Commentary that states (p65) ‘UCP600 does not refer to, require or imply that linkage is necessary between or among documents’ and then one has in ISBP681, which was supposedly revised to take account of UCP600, para 183 the requirement for linkage. Similarly, in both UCP500 and 600 it is stated ‘Contents of terms and carriage will not be examined’ and then one has in ISBP645 & 681 para 99 / 114 a banking practice that is based on reading the terms and conditions of carriage. (It is just this sort of thing that results in my holding the ‘Banking’ Commission in such low esteem.) Anyway, I believe it is critical that the next ISBP contains a clear and unequivocal statement regarding document ‘linkage’.
Regards, Jeremy
[edited 12/11/2009 10:23:06 AM]
Para 77: Yes, I see what you mean but have to admit to surprise that this could occur in practice.
Para 177: Given sub-Art. 28(j) I do wonder why this should be necessary. My main concern is the extent to which a bank must examine the document to identify if this ‘clause’ is present.
Para 89: I agree wholeheartedly that this para is profoundly unsatisfactory. Bankers should not have to understand or take account of specialist shipping jargon.
Link between documents: I find this ‘interesting’. On the one hand one has the UCP600 Commentary that states (p65) ‘UCP600 does not refer to, require or imply that linkage is necessary between or among documents’ and then one has in ISBP681, which was supposedly revised to take account of UCP600, para 183 the requirement for linkage. Similarly, in both UCP500 and 600 it is stated ‘Contents of terms and carriage will not be examined’ and then one has in ISBP645 & 681 para 99 / 114 a banking practice that is based on reading the terms and conditions of carriage. (It is just this sort of thing that results in my holding the ‘Banking’ Commission in such low esteem.) Anyway, I believe it is critical that the next ISBP contains a clear and unequivocal statement regarding document ‘linkage’.
Regards, Jeremy
[edited 12/11/2009 10:23:06 AM]
ISBP REVISION
Jeremy,
I could also add for the time being:
Par. 23: documents should/must? be issued in the language of the credit (unless otherwise specified in the credit).
Par. 61: the two last sentences should be deleted. reason: ???
Par. 71 and similar: as "indentified as the carrier" does not convince everybody, it should be added that the word "carrier" must appear on the document.
Par. 175: in my opinion it is the document itself which has an expiry date i.e. you cannot us it after its expiry date (because the insurer may have amended it). Nothing to do with loading date and claims
Daniel
I could also add for the time being:
Par. 23: documents should/must? be issued in the language of the credit (unless otherwise specified in the credit).
Par. 61: the two last sentences should be deleted. reason: ???
Par. 71 and similar: as "indentified as the carrier" does not convince everybody, it should be added that the word "carrier" must appear on the document.
Par. 175: in my opinion it is the document itself which has an expiry date i.e. you cannot us it after its expiry date (because the insurer may have amended it). Nothing to do with loading date and claims
Daniel
ISBP REVISION
And by the way:
par. 77: we've seen that (strict FOB).
par. 177: why? for our "culture générale" of course. Mind you there an excellent explanation in the book of judge R. Jack.
I was also wondering if the ISBP could address the endorsements of the insurance documents by specifiying that if the document is not endorsed correctly (see for instance TA 688) the document is discrepant but if it is not endorsed at all, it is OK as these endorsements are useless.
Daniel
par. 77: we've seen that (strict FOB).
par. 177: why? for our "culture générale" of course. Mind you there an excellent explanation in the book of judge R. Jack.
I was also wondering if the ISBP could address the endorsements of the insurance documents by specifiying that if the document is not endorsed correctly (see for instance TA 688) the document is discrepant but if it is not endorsed at all, it is OK as these endorsements are useless.
Daniel
ISBP REVISION
My general views regarding an ISBP revision are as follows:
1. With the possible exception of Preliminary Considerations, all paragraphs should contain unequivocal statements of what is isbp. An examples of where this is not the case is para 23 which states: ‘it is expected that documents issued by the beneficiary will be in the language of the credit’.
2. If there is no clear isbp in an area of importance the Commission should not hesitate to create it, so as to bring certainty to the matter concerned, but the practice created should always increase the likelihood of a discrepancy not being found.
3. ISBP must not be inconsistent with UCP600. Inconsistency apparently occurs between:
A. para’s 90 & 114, which seem to involve reading the terms & conditions of carriage, and sub-Art’s 19(a)(v) and 20(a)(v) which state the terms & conditions of carriage will not be read.
B. para 183, which appears to require linkage between the C/O and the invoice, and the UCP600 Commentary –which presumably is accurate- that states (p65) ‘UCP600 does not refer to, require or imply that linkage is necessary between or among documents’.
Regarding new documents that I favour covering in isbp, these are:
• Forwarder’s certificate of receipt.
• Packing list (and the interpretation of the often encountered requirement for a ‘detailed’ packing list).
• Weight list.
Other areas that I think ought to be covered are:
A. linkage between documents so as to make the position clear (my remarks above refer).
B. the ‘status’ of drafts (bills of exchange), i.e. in what circumstances are they and are they not a document required under a credit. (Docdex Decision 260, Opinion TA.703 & the English court case Credit Industriel et Commercial v China Merchants Bank refer.)
C. what documents must, as opposed to may, contain a description of the goods, services or performance at least in general terms not conflicting with their description in the credit. For example, transport documents, insurance documents, inspection certificates, certificate of origin.
D. the last sentence of sub-Art. 14(j): ‘when the address and contact details of the applicant appear as part of the consignee or notify party details on a transport document subject to articles 19, 20, 21, 22, 23, 24 or 25, they must be as stated in the credit’ so as to reinforce and expand upon the recent related opinion.
E. the ‘status’ of Incoterms when quoted in a credit and would like to see a statement that other than being quoted correctly in a presented document, when they are or have to be quoted, an Incoterm quoted in a credit plays absolutely no role in determining the compliance of documents.
Lastly, with regard to para 89, 113, & 133, bankers should not have to understand or take account of specialist shipping jargon and therefore I would like to see these paragraphs take a quite different view.
1. With the possible exception of Preliminary Considerations, all paragraphs should contain unequivocal statements of what is isbp. An examples of where this is not the case is para 23 which states: ‘it is expected that documents issued by the beneficiary will be in the language of the credit’.
2. If there is no clear isbp in an area of importance the Commission should not hesitate to create it, so as to bring certainty to the matter concerned, but the practice created should always increase the likelihood of a discrepancy not being found.
3. ISBP must not be inconsistent with UCP600. Inconsistency apparently occurs between:
A. para’s 90 & 114, which seem to involve reading the terms & conditions of carriage, and sub-Art’s 19(a)(v) and 20(a)(v) which state the terms & conditions of carriage will not be read.
B. para 183, which appears to require linkage between the C/O and the invoice, and the UCP600 Commentary –which presumably is accurate- that states (p65) ‘UCP600 does not refer to, require or imply that linkage is necessary between or among documents’.
Regarding new documents that I favour covering in isbp, these are:
• Forwarder’s certificate of receipt.
• Packing list (and the interpretation of the often encountered requirement for a ‘detailed’ packing list).
• Weight list.
Other areas that I think ought to be covered are:
A. linkage between documents so as to make the position clear (my remarks above refer).
B. the ‘status’ of drafts (bills of exchange), i.e. in what circumstances are they and are they not a document required under a credit. (Docdex Decision 260, Opinion TA.703 & the English court case Credit Industriel et Commercial v China Merchants Bank refer.)
C. what documents must, as opposed to may, contain a description of the goods, services or performance at least in general terms not conflicting with their description in the credit. For example, transport documents, insurance documents, inspection certificates, certificate of origin.
D. the last sentence of sub-Art. 14(j): ‘when the address and contact details of the applicant appear as part of the consignee or notify party details on a transport document subject to articles 19, 20, 21, 22, 23, 24 or 25, they must be as stated in the credit’ so as to reinforce and expand upon the recent related opinion.
E. the ‘status’ of Incoterms when quoted in a credit and would like to see a statement that other than being quoted correctly in a presented document, when they are or have to be quoted, an Incoterm quoted in a credit plays absolutely no role in determining the compliance of documents.
Lastly, with regard to para 89, 113, & 133, bankers should not have to understand or take account of specialist shipping jargon and therefore I would like to see these paragraphs take a quite different view.