I am very puzzled by some comments of the Technical Adviser in the latest DCI. He refers -apparently disapprovingly- to ‘discrepancies that have no true value in relation to the underlying transaction’ and quotes (I’m not sure where from) -seemingly approvingly- the words ‘[that banks should (I infer)] look at the presentation, the parties involved and the goods before refusing documents for reasons that have no real bearing on the underlying transaction, the credit or the rules in UCP 600’.
However, under the doctrine of facial compliance (which on the face of it [!] continues under UCP600):
1. the parties involved and the goods and:
2. whether or not a discrepancy has any true value in relation to or bearing on the underlying transaction,
is wholly and utterly irrelevant.
What is going on?
While on the subject of facial compliance, I also notice that there appears to be a significant misunderstanding in the article ‘A shipping association’s view’ where it is stated:
‘The removal of the words "on its face" [‘except in one place’] indicates to BIMCO that banks must perform a more thorough examination of the documents than has previously been the case.’
Oh no they mustn’t! It is simply not the role of banks to ‘play a more active role in the detection of maritime fraud’.
[edited 11/10/2006 3:53:14 PM]