This blog provides a brief overview of all the Opinions that were approved by the ICC Banking Commission in November 2016. The full text of each Opinion should be reviewed to fully understand all the issues.
TA.842rev3 - Manual signing of documents
A condition in a credit stated that all documents were to be manually signed. The issuing bank refused the presented documents on the basis that a copy of the commercial invoice was not manually signed.
It was highlighted that ISBP 745 re-emphasised that copies of documents need not be signed (nor dated). In summary, it was concluded that, in accordance with international standard banking practice, copies of document do not require a signature unless an express requirement for signature, directly applicable to copies, is stated in the credit.
TA.849rev3- Invoice includes a ‘sanctions' clause
An invoice presented under a credit included the following text: "These commodities, technology, or software were exported from the United States in accordance with the Administration Regulations. Diversion contrary prohibited." This was considered by the confirming bank to be a sanctions clause and therefore discrepant.
It was highlighted in the analysis that such text was not a sanctions clause. Furthermore, in view of the fact that the specific clause was not prohibited by the credit, the discrepancy could not be considered as valid.
However, any laws or regulations to which the confirming bank may be subject could prevent it from fulfilling its role under the credit and UCP 600.
TA.851rev3- Issuer of an acceptance certificate and Draft at sight
An issuing bank refused documents on the basis that the applicant's acceptance certificate differed to that required by the credit, without indicating in which respect it differed, and that the tenor of the presented draft was incorrect.
The presented acceptance certificate appeared to be a standard template form, which was duly completed with all required details and bore the requisite signatures of the applicant and beneficiary, but was presented on a document bearing the letterhead of the beneficiary. The document was not considered to be discrepant.
With regard to the draft, the credit included a condition for ‘Drafts At: At Sight". The presented draft stated ‘At Sight'. This was determined to be sufficient to fulfil the terms and conditions of the credit.
TA.852rev - 90% payment against complying presentation
A credit was issued available with the confirming bank by payment at sight and stated: "Payment condition: 90% of the L/C value will be paid against presentation of complying shipping documents." Partial shipments were allowed. The confirming bank refused documents covering the first partial shipment on the basis that the credit stated 90% of the credit value rather than 90% of the documents value. The confirming bank also argued that it would be required to hold all the documents for each partial shipment until the credit was fully utilised, and it would only then effect honour or negotiation under the terms of its confirmation.
It was concluded that the discrepancy was not valid and that the confirming bank must honour complying presentations that are made for each partial shipment.
TA.853rev - Contract number and date on draft and courier receipt
A credit stated that all documents were to show the contract number and date. The nominated bank, on the basis that neither the draft nor the courier receipt accompanying the beneficiary' certificate evidenced the contract number and date, refused the documents. However, the details were included in the beneficiary's certificate and on the other stipulated documents.
As concluded in an earlier Opinion, a ‘beneficiary statement' and an accompanying courier receipt form part of the same documentary requirement. Accordingly, this cannot be considered as a discrepancy.
The term ‘all documents' does not include a draft, which is to be considered as an unconditional order in writing, not a document. Accordingly, this is also not a discrepancy.
TA.855rev - Credit issued by a non-bank / non-return of documents
The issuer of a credit, a non-bank, having originally informed the presenting bank of discrepancies, subsequently informed the presenting bank that there was a quality dispute between the buyer and seller. The presenting bank requested the return of the documents but the issuer advised that it had closed its files.
The issuer, by failing to return the documents, was precluded from claiming that the documents did not constitute a complying presentation and it must honour. Furthermore, the issuer cannot close its files without the approval of the presenting bank.
Non-bank issuers are held to the same obligation and standard of care as a bank.
TA.856rev - Typographical error?
An issuing bank refused documents presented under a credit on the basis that the contract number in the invoice was incorrect due to the addition of an additional character.
Although there was no dispute that a difference existed, it was decided that the invoice still provided sufficient data to determine that the additional character in the invoice was solely a typographical error.
Subsequent provision of a corrected invoice did not imply an agreement of the nominated bank/beneficiary to the discrepancy advised by the issuing bank.
TA.858rev - Applicability of existing Opinions
An issuing bank, on the basis that the on board notation on a bill of lading showed a pre-carriage vessel instead of the ocean vessel, refused documents. In view of the fact that the on board notation should have indicated the ocean vessel, the discrepancy was considered to be valid.
It was agreed that two referenced UCP 500 Opinions (R350 and R352) were still valid for transactions subject to UCP 600.
TA.859rev - Trade term and source
Various issuing banks had been refusing documents on the basis that the omission of the name of the country against a trade term constituted a discrepancy. Additionally, it was alleged that trade terms and their source should be stated in the same area of an invoice.
ISBP 745 states that the name of a country is not required to be mentioned in the port of discharge on a bill of lading. By extension, this equally applies to omission of the country in a trade term.
When a trade term and its source are part of a goods description, it may be stated in different areas of an invoice.
It was concluded that nether of these issues represented a valid discrepancy.
TA.860rev - Goods description: spare parts
A nominated bank refused documents presented under a credit on the basis that the packing specifications included reference to ‘spare parts'.
As stated in ISBP 745 paragraph C5, it was concluded that the description of the goods could also indicate additional data in respect of the goods, provided that they did not appear to refer to a different nature, classification or category of goods.
The fact that the packing list additionally mentioned ‘spare parts' did not create a conflict with the description of the goods shown in the credit or with that shown on the invoice.
TA.861rev - Copy of performance guarantee under UCP 600
A nominated bank refused documents on the basis that the required performance guarantee stated an expiry date and amount that was in conflict with the credit terms.
In view of the fact that the performance guarantee included three separate validity options and, in addition, a reduction clause that could be exercised by the applicant of the guarantee, it was concluded that these were valid discrepancies.
TA.862rev - AWB's not showing issuing date
An issuing bank refused documents presented under a credit on the basis that two Air Waybills did not show an issuance date.
In accordance with UCP 600 sub-article 23 (a) (iii), air transport documents must appear to indicate the date of issuance. The date of issuance of an air transport document will be considered to be the date of shipment, unless the air transport document contains a specific notation of the actual date of shipment. However, neither UCP 600 nor ISBP 745 indicates that the reverse is permitted. An air transport document must always include a date of issuance.
TA.863rev - Port of discharge in bill of lading
An issuing bank refused documents presented under a credit on the basis that the bill of lading showed port of discharge as ‘Alexandria, Egypt' instead of ‘Alexandria Seaport, Egypt.'
For the purpose of a bill of lading, a ‘port' is considered equivalent to a ‘seaport'. Therefore, the absence of the word ‘seaport' cannot be considered as a discrepancy. If there is a necessity for the word ‘seaport' to appear within the port of discharge field, then this should be made clear in the credit.
The discrepancy was not valid.