Two draft Opinions to be discusssed at the April 2023 Banking Commission meeting.
TA.927rev (re-submitted)
A credit was issued providing for shipment of a cooking range and its spare parts for an amount of XXX (the credit amount). The presented documents included an invoice which displayed three rows under the header ‘Commodity':
The issuing bank refused the presentation stating that ‘free of charge' goods were not allowed by the credit.
The nominated bank considered, as the credit did not stipulate a price for the spare parts, that ‘free of charge' spare parts were acceptable under the credit.
It is queried as to whether the discrepancy is valid, and whether an invoice stating goods free of charge is acceptable.
TA.930
Documents were submitted and accepted by the issuing bank under a credit subject to UCP 600.
Prior to maturity, the issuing bank advised that they could not pay due to trade sanctions.
A number of questions have been raised by the nominated bank including whether or not a sanctions clause is a non-documentary condition; whether the obligation of the issuing bank under a credit is separate from the underlying agreement between the applicant and the issuing bank; whether evidence is required to prove a sanctions issue; whether the payment obligation remains in force until the sanctions issue is approved; whether an offer to pay in a different currency is valid.
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