ICC Digital Library Forum

A credit is opened indicating a price followed by FCA Incoterms 2000. A marine/ocean bill of lading is called for, but without requiring any mention concerning the payment (or in this case the non-prepayment) of freight charges.
Since article 23 makes no reference to freight charges, and turning to article 33, there does not seem to be a requirement for such a mention, would a B/L bearing no reference to payment or non-prepayment be acceptable?

Article 33 b, in accepting bills of lading marked paid, is predicated on the basis of such a requirement in the DC. Without such requirement in the DC, there is no requirement in the B/L, so a B/L without an indication of freight paid would be acceptable.

Article 33 b is based on a stipulation in the DC that the B/L show freight paid. In my opinion, this can be done in two ways -
1. direct instruction "B/L to be marked freight paid"
2. indirect instruction "CIF Kobe Incoterms 2000".

CLEAN SLATE PRINCIPAL
Article 33 works on the "clean slate" principal, assuming that a B/L presented is clean (unclaused) and then goes on to indicate clauses which are acceptable such as freight paid, collect etc, under given circumstances. Thus the B/L presented in its basic form (unclaused) is acceptable, unless contra-indicated by requirements in the DC for such clauses.

In the specific case you mention, it would appear that the Incoterm quoted is not appropriate. A "shipped" B/L would indicate FOB & not FCA. A B/L issued on the basis of FCA could be issued indicating "received for shipment" or similar, but unless specifically permitted in the DC, would be unacceptable under UCP.

Laurence

Thanks for your quick reply. Actually you anticipated the second point that I was going to bring up - since FCA does not cover the loading on board, the B/L could be a "received". I realize that Article 23 requires the B/L to be on board -- however it also states as usual, "unless otherwise stipulated in the credit". The use of an incoterm FCA is arguably "otherwise stipulated".
In fact we all agree that the credit is poorly opened, unfortunately not caught when received. So we must battle it out!!
Judith

To avoid crossing swords with some bankers I would suggest an amendment permitting "Received for shipment B/L", although I agree with you that strictly speaking it should not be necessary under FCA terms.

It is also debatable whether an ocean B/L is appropriate as Art. 23 covers port to port shipments, which by definition does not relate to FCA.

Laurence

FCA is Incoterm which might be used for any mode of transport, also for port – to- port even if it is not so common. Please see official publication of Incoterms 2000. It is correct that requirement in documentary credit for ocean B/L lading without stipulating „otherwise“ that the received B/L is required or allowed would be complied with only when shipped on board B/L is presented. Mentioning the FCA term in credit will not do, it will not itself make „received B/L“ acceptable.

Re. „2. indirect instruction "CIF Kobe Incoterms 2000" – this will not “itself” mean under ISBP that the transport document must be “prepaid”.

Best Regards,

Pavel Andrle

I am glad to join in the discussions from an Internet Café in Roma.

Firstly, to end arguments between Laurence and Pavel, we must realise that the UCP 500 cannot be expected to cover each and every special situation. This is only common sense. Or the UCP 500 would be as long as the Great Wall of China!

Hence when we face a situation that a DC calls for FCA shipment BL without saying anything on freight payment, we cannot simply rely on the wordings in the UCP 500 to find the support. As reflected in the Civil Law practice, we must go to the underlying intention of the related transport Articles in the UCP 500 to see what the Working Party really wants.

I believe that an on board notation is needed for a Received for Shipment BL under the UCP 500, although the DC is silent in this point.

Parties should use FOB Incoterms 2000 in a DC asking for a BL, although there is no restrictions to use FCA Incoterm 2000 in a DC asking for a BL.

If FCA is nevertheless used, then if the BL is silent on payment of freight, it is understood to be Freight Collect, although it is more clear for the document examiner with a Freight Collect stamping in the BL. Otherwise it would be marked Freight Prepaid.

We cannot deem silence in freight payment as a valid discrepancy.

Having said that, on the other hand, if the DC asks for CIF Incoterms 2000 and a BL, then absence of Freight Prepaid in the BL is a discrepancy.

Disagree?

When I go to Teatro dell,Opera tonight for L,Elisir D,Amore with an Internet Reservation Form printed out in Toronto, it is not marked Fees Prepaid, and yet it is valid. When I show this form to the Box Office tonight, and when I pay with my credit card, I will be given the entry ticket if I arrive 30 minutes before the opera starts. There is no need to mark the booking form Fees Collect! This is only simple common sense. So why in DC it should be different?

www.tolee.com

[edited 11/3/02 2:31:51 AM]

T.O.

I do not have an argument with Pavel. I have said that FCA is not appropriate for port to port shipments. Pavel has said that FCA is allowed for port to port shipments. I do not dispute Pavel's statement. This is not a basis for argument.
Under FCA, the carrier is not required to issue a B/L, which in this case would be problematic. However, the real problem here is the very poor drafting of the DC.

However, Art. 23 permits only port to port shipments, which, depending on the mode of transport, may contra-indicate FCA.


Laurence
[edited 11/4/02 5:19:52 PM]

Laurence,

Your point noted with thanks.

In fact, during the drafting stage of Incoterms 2000, at one point of time, the Working Party proposed to drop FOB, CFR and CIF to avoid confusions. But these terms were nevertheless retained due to the objection from the commodities trade and also realising that these terms are already deeply implanted into the minds of the traders who would treat these terms as a default.

In certain parts of Asia some traders quote FOB whereas they actually mean EXW.

If these terms were dropped from Incoterms 2000, then using FCA would require issue of BL in maritime transport. Otherwise it won’t work.

www.tolee.com

[edited 11/5/02 4:04:12 PM]