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Discussed at the ICC Banking Commission meeting on 17 February 2025.

TA.949

A documentary credit, subject to UCP 600, required presentation of one copy of "Surrendered B/L". 

Three original bills of lading were presented stating, below the description of goods, "Original Bill Surrendered at Origin".

The presentation was refused on the basis of two discrepancies:

1. Surrendered bill of lading not presented in copy (but 3/3 originals)
2. The surrendered bill of lading does not contain a surrendered stamp

Three questions were raised:

• In the event that a credit requires one copy of surrendered bill of lading, does this mean that a copy, as opposed to an original, must be presented?
• Should the presented bill of lading be stamped "Surrendered" or can the wording "surrendered" (or similar) be printed on the bill of lading?
• Are the discrepancies valid?

The draft opinion highlights that the terms "surrender" or "surrendered" are not in common usage in respect of documents presented under documentary credits, and any definition or interpretation is likely to be legalistic rather than aligning with international standard banking practice.   

Further states that when a bank issues a credit permitting or requiring surrender bills of lading, the credit must include clear instructions on how the surrender of the original bills of lading should be documented on the copy provided to the shipper for presentation under the credit.

Extensive feedback had been received from ICC National Committees, and this prompted significant discussion within the Technical Advisory Team, as well as during the Opinions session in Dubai.

A number of key decisions were reached which revolved around five fundamental areas:

• Application of UCP 600 sub-article 17 (d) and ISBP 821 paragraph A30 (b)
• Surrender Bills of Lading not being referenced in UCP 600 or ISBP 821
• Responsibility of an issuing bank when issuing such a credit
• The meaning of Surrendered Bills of Lading
• General Remarks

These are summarised below:

Application of UCP 600 sub-article 17 (d) and ISBP 821 paragraph A30 (b)

• A number of comments make the point that the credit does not ‘prohibit' or ‘exclude' the presentation of original bills of lading, implying that there must be a specific prohibition of sub-article 17 (d). This is not so. The wording of the credit can provide a modification by its terms and conditions e.g., copy of .... removing the need for an original. Opinion R803 includes "Modifications to the rules do not necessarily require a bank to specifically state the article that has been modified or the manner in which it has been modified."
• In this context refer to ISBP 821 Preliminary Considerations (ii) "The practices described in this publication highlight how the articles of UCP 600 are to be interpreted and applied, to the extent that the terms and conditions of the credit, or any amendment thereto, do not expressly modify or exclude an applicable article in UCP 600." In ISBP 745, this text was preceded by "It should be noted that any term in a documentary credit that modifies or excludes the applicability of a provision of UCP 600 may have an impact on international standard banking practice."
• ICC Opinion TA675rev (R758) is not relevant to this Opinion as it covers release of goods without the need for an original bill of lading to be handed over in exchange for the goods.
• It is agreed that this is a poorly drafted credit and that the issuing bank should bear the risk of any ambiguity in the context of how the ‘surrender' of one or more original bills of lading was completed. Three originals bills of lading were presented - we do not see how this can be treated as anything other than a discrepancy, bearing in mind that the originals (or at least one) should have been surrendered and no longer be available. This does not make sense (even raises a red flag to the layman), and would not be understandable to an examiner, even if they did not comprehend the essence of a surrendered bill of lading.

Surrender Bills of Lading not being referenced in UCP 600 or ISBP 821

• The terms "surrender" or "surrendered" are not incommon usage in respect of documents presented under documentary credits and therefore, a document-checker islikelynot quite familiar withthe function ofSurrender B/Ls.
• There is no common practice of returning to and holding by the carrier or their agent the full set of original bills of lading, instead, it could be found in shipping practice that after the carrier or their agent makes a mark or notation of "surrendered" or similar wording on B/L, they may be willing to return the B/L to the shipper at their request. Further, bankers who examine documents are not required to know the specific shipping practice and knowledge about "surrendered B/L".
• It is well known that "surrendered Bill of lading" was not defined in UCP. It is recommended not to use such words in the L/C, since it is rarely related to the international rules and practices.

Responsibility of an issuing bank when issuing such a credit

• We agree that there was a responsibility for the issuing bank to explain how the ‘surrender' was to be evidenced on the copy of the surrendered bill of lading. However, this does not detract from the fact that if a credit requires the presentation of a copy of a surrendered bill of lading, at least one original bill of lading (if not all originals) should have been retained by the carrier, otherwise what has been surrendered and what would be the underlying purpose of requesting a copy of a surrendered bill of lading?

The meaning of Surrendered Bills of Lading

• It appears that some NCs have members that have knowledge and application of surrendered bills of lading are of a similar view to that expressed by the TA's in the draft Opinion.

General Remarks

• We agree with the comments regarding inclusion of surrendered bills of lading into the ISBP revision.

OUTCOME

Given the diversity of comments, the apparent lack of experience with such documents and the impact of the surrendering of bills of lading (one or all originals), the TA Team will seek written comments from transport industry organisations. 

This does not infer that we are encouraging document examiners to look outside the face of the document for answers as to the acceptability of a presented "copy of surrendered bill of lading" but this is intended to provide education to banks, especially issuing banks, as to the documentary requirements that are needed to issue a documentary credit that is in a form that will be understood by all parties. The ISBP revision working group can then work on the appropriate text that could be included in the proposed revision. 

Until this Opinion is finalised and approved, it is recommended that an issuing bank allowing the presentation of a copy of a surrender bill of lading clearly indicate in the documentary credit the full requirements for the indication of "surrender" on the copy of the bill of lading and also whether one or more original bills of lading (e.g., 1/3 or 2/3 originals) are still to be presented along with the copy. Confirming banks should seek clarification from an issuing bank for any term or condition that it does not understand or finds to be unclear.

Accordingly, this draft Opinion will be postponed until the requisite feedback is received. 

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