Letter of Credit calls for a Certificate of Authenticity Certificate of German Origin (all in one documentary requirement). The documents when presented include a Certificate of Authenticity plus a Certificate of Origin (evidencing the goods are of German Origin).
My opinion is the documents do not comply since the Certificate of Origin is actually an additional document and should not even be reviewed.
However, the issuing bank is refusing documents because the Certificate of Authenticity does not include the origin as called for in the credit but they are also referring to discrepancies in the Certificate of Origin (which I think I can argue).
Seems like the issuing bank is including the C/O as part of the documents being presented which may give me an arguement that the C/O may meet the terms of the credit for the origin of the goods since they are looking at it for compliance.
Any thoughts
Two Documents Presented in Lieu of One
Two Documents Presented in Lieu of One
Larry,
My personal thought, without any liability or responsibility, is that I can see no obvious justification for interpreting “Certificate of Authenticity Certificate of German Origin”, even if appearing on the same line, as requring one single document. What is it that makes you say this is ‘one documentary requirement’?
Regards, Jeremy
My personal thought, without any liability or responsibility, is that I can see no obvious justification for interpreting “Certificate of Authenticity Certificate of German Origin”, even if appearing on the same line, as requring one single document. What is it that makes you say this is ‘one documentary requirement’?
Regards, Jeremy
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Two Documents Presented in Lieu of One
Dear Larry,
My personal view without responsibility / liability.
Another perfect example that the majority of the problems arising under documentary credits, are caused by the wording inserted in the credit … and not necessarily the rules.
This is one of those cases, where I would have hoped that someone (Advising bank or the Beneficiary) would have seen this at time of advising the credit, and reverted to the issuing bank in accordance with article 12 of the UCP for clarification. Is one or two documents required.
There are a few issues to consider:
1) one or two documents?
Well; who am I to say (without having seen the credit) – but this sure sounds like TWO documents to me. Certificate of Authenticity and Certificate of Origin is to me of a very different nature. Usually when documents are combined in the credit requirement, they are so because they are similar of nature. I.e. Packing and weight list.
My head has really been spinning over this, but I do not think that I would consider the C/O as “additional document” – and would consequently accept the presentation as two separate documents.
In any case I think that it is unclear whether one or two documents are required. The issuing bank is (as I see it) responsible for this, and must accept whatever seems to be an hornets attempt by the beneficiary to meet the credit requirements.
2) The basis for refusal.
Notwithstanding the above, it does not seem unreasonable that the document(s) actually shows German origin – and for that matter “Authenticity” (Whatever that is ??) .
3) To eat the cake and have it
Thirdly – and I guess your point as well. The issuing bank on one hand refuses because of missing origin; indicating that the C/O has been disregarded, and on the other mentions discrepancies stated there. You simply can not do both.
Consequently; in your shoes I would take the fight with the issuing bank, arguing that the “origin” is included in the Certificate of Origin (which by the way seems a natural place
Best regards
Kim
[edited 4/19/2005 9:30:49 AM]
My personal view without responsibility / liability.
Another perfect example that the majority of the problems arising under documentary credits, are caused by the wording inserted in the credit … and not necessarily the rules.
This is one of those cases, where I would have hoped that someone (Advising bank or the Beneficiary) would have seen this at time of advising the credit, and reverted to the issuing bank in accordance with article 12 of the UCP for clarification. Is one or two documents required.
There are a few issues to consider:
1) one or two documents?
Well; who am I to say (without having seen the credit) – but this sure sounds like TWO documents to me. Certificate of Authenticity and Certificate of Origin is to me of a very different nature. Usually when documents are combined in the credit requirement, they are so because they are similar of nature. I.e. Packing and weight list.
My head has really been spinning over this, but I do not think that I would consider the C/O as “additional document” – and would consequently accept the presentation as two separate documents.
In any case I think that it is unclear whether one or two documents are required. The issuing bank is (as I see it) responsible for this, and must accept whatever seems to be an hornets attempt by the beneficiary to meet the credit requirements.
2) The basis for refusal.
Notwithstanding the above, it does not seem unreasonable that the document(s) actually shows German origin – and for that matter “Authenticity” (Whatever that is ??) .
3) To eat the cake and have it
Thirdly – and I guess your point as well. The issuing bank on one hand refuses because of missing origin; indicating that the C/O has been disregarded, and on the other mentions discrepancies stated there. You simply can not do both.
Consequently; in your shoes I would take the fight with the issuing bank, arguing that the “origin” is included in the Certificate of Origin (which by the way seems a natural place
Best regards
Kim
[edited 4/19/2005 9:30:49 AM]
Two Documents Presented in Lieu of One
Maybe I was not very clear. The requirement for the Certificate of Authenticity/Certificate of German Origin is under one documentary requirement (e.g. document number one), there was also a document number two and a document number three and so on and so forth. I had no problem with the requirement was part of the Certificate of Authenticity. The certificate could have simply said the "coin" was of German Origin and the document would have complied. Unfortunately the Certificate of Authenticity did not say that and the beneficiary obtained a C/O from the Chamber of Commerce to meet that condtion. My question was once the issuing bank acknowledged the C/O as being discrepant, did I now have a right to argue the C/O met the condition of the Certificate of Authenticity?
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
Two Documents Presented in Lieu of One
I agree with Kim that this should have picked up by the Advising Bank. Nevertheless, in my opinion, the only thing missing here is a comma after the word "Authenticity" to make it abundantly clear that two documents are required. Despite lacking this clarity, there is no clear instruction in the LC for a single document to satisfy this requirement. This, and the fact that two certificates are listed (Cert. of Authenticity and Cert. of Origin) would lead me to believe that the intention was for two documents to be submitted. Furthermore, I am not aware of any recognised document combining these two into one document.
Laurence
Laurence
Two Documents Presented in Lieu of One
Larry,
I would interpret ‘Certificate of Authenticity/Certificate of German Origin’ to mean Certificate of Authenticity OR Certificate of German Origin. If the intention was that a single document was presented that combined the function of certificate of authenticity (whatever that is) and certificate of German origin this term of credit was simply not correctly expressed. I certainly do not see any grounds for the issuing bank to refuse the Certificate of Authenticity on the grounds that the credit required the document to state the goods were of German origin as, on the face of it, the credit did not. All that the certificate had -& was required- to do was contain some statement regarding the ‘authenticity’ (as opposed, e.g., to origin) of the goods.
Sorry but I think your question is based an incorrect premise. I certainly see no grounds for arguing the C/O met the conditions for the Certificate of Authenticity as ‘origin’ and ‘authenticity’ are completely different things.
All the above is personal and without liability or responsibility on my part.
Jeremy
I would interpret ‘Certificate of Authenticity/Certificate of German Origin’ to mean Certificate of Authenticity OR Certificate of German Origin. If the intention was that a single document was presented that combined the function of certificate of authenticity (whatever that is) and certificate of German origin this term of credit was simply not correctly expressed. I certainly do not see any grounds for the issuing bank to refuse the Certificate of Authenticity on the grounds that the credit required the document to state the goods were of German origin as, on the face of it, the credit did not. All that the certificate had -& was required- to do was contain some statement regarding the ‘authenticity’ (as opposed, e.g., to origin) of the goods.
Sorry but I think your question is based an incorrect premise. I certainly see no grounds for arguing the C/O met the conditions for the Certificate of Authenticity as ‘origin’ and ‘authenticity’ are completely different things.
All the above is personal and without liability or responsibility on my part.
Jeremy
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Two Documents Presented in Lieu of One
(silent laugh)
After reading the above postings, I guess that ONE thing is absolutely clear: This credit requirement IS ambiguous!
Now, looking at this from a trouble shooting point of view, I have to disagree with you Jeremy:
1) The statement is ambiguous. It is not clear whether this should be one document, two documents – or one or the other documents. (See by the way ISBP Para. 7)
2) Since issuing bank raises discrepancies concerning both documents, I would interpret this as their “acceptance” of the two being presented.
3) Consequently I would argue hardcore against the discrepancies raised within the documents presented: I.e. That the credit requirement “Authenticity” an “Origin” has been complied with in the document(s) required in the credit.
I sure hope this case is not against Nordea
Best regards
Kim
After reading the above postings, I guess that ONE thing is absolutely clear: This credit requirement IS ambiguous!
Now, looking at this from a trouble shooting point of view, I have to disagree with you Jeremy:
1) The statement is ambiguous. It is not clear whether this should be one document, two documents – or one or the other documents. (See by the way ISBP Para. 7)
2) Since issuing bank raises discrepancies concerning both documents, I would interpret this as their “acceptance” of the two being presented.
3) Consequently I would argue hardcore against the discrepancies raised within the documents presented: I.e. That the credit requirement “Authenticity” an “Origin” has been complied with in the document(s) required in the credit.
I sure hope this case is not against Nordea
Best regards
Kim