ISSUE 19 Jun2008 Final review of UCP opinions reviewed by the ICC Banking Commission in April 2008 By Gary Collyer In the last newsletter we covered 6 of the requests for opinions that were discussed by the national committees. In this newsletter we cover some of the remaining opinions that were under discussion. When a credit allows for the presentation of consignment notes or original bills of lading or forwarding agents "goods receipt", do the requirements for place of delivery apply to the forwarding agents "goods receipt"? The nominated bank had rejected for absence of this data. The forwarding agents receipt evidenced that the goods had been received at the disposal of the [named] applicant at the place of receipt, but had no indication of the place of delivery. This is an example of an issue that occurs on a regular basis. Banks issue credits that allow for different forms of transport documents to be presented but indicate only one set of requirements for "from" and "to" without regard to the fact that the documents have different requirements in this respect. A forwarding agents receipt is just that - a receipt. Too many banks try to turn a forwarding agents receipt into a transport document by requiring it to evidence shipment from A to B and that it evidence shipment prior to a latest shipment date. If an applicant or issuing bank requires a document that evidences receipt of goods and shipment thereof then they should call for a document that is subject to articles 19-25 of UCP 600. As far as a forwarding agents receipt is concerned, there is only one date that is relevant and that is the date of receipt of the goods. This can be evidenced by the date of issuance of the document or the date as shown within the body of the document. The conclusion to the opinion stated that the forwarding agents receipt did not require the place of delivery to be inserted thereon. See opinion TA.641 for the full transcript of the opinion. In another opinion, the requirements for signing an insurance certificate were called into question when an insurance document stated: This certificate is not valid unless the Declaration be signed by: [company V] Logistics Corporation and/or Associates and/or Subsidiaries or [company A] Limited for and on behalf of The Underwriters at Lloyd's of London and Insurance Companies. The certificate had been signed by [company V] Truck Corporation but did not indicate that they were an associate or subsidiary of Company V Logistics Corporation. The conclusion indicated that the signature of company V Truck Corporation should have indicated whether they were an associate of subsidiary of company V Logistics Corporation. See opinion TA.645rev for the full transcript of the opinion. A credit calls for a certificate of origin from a local chamber of commerce. What is a local chamber of commerce in this context? Again, this is another issue that stems from poor language in the credit. Unfortunately, for the issuing bank or the applicant they may not receive the form of document that they had intended. Article 3 of UCP 600 states that where the word "local" is used it means any issuer other than the beneficiary. In the context of the query, and the conclusion given therein, this would equate to any chamber of commerce issuing the certificate of origin. See opinion TA.652rev for the full transcript of the opinion. For letters of credit issued by banks in Nigeria it is usual to see a requirement for a CCVO (Combined Certificate of Value and of Origin). There may or may not be a separate requirement for the presentation of an invoice. When a credit requires a CCVO and no invoice and it is stated to be transferable, does the allowance in sub-article 38 (h), for the first beneficiary to substitute their own invoice, extend to substituting their own CCVO? The CCVO contains data that you would see in an invoice and a declaration as to the value and origin of the goods. The answer given in the conclusion to this opinion stated that as the credit in question did not require the presentation of a commercial invoice and the issuing bank had stated that the credit was transferable, it would not be unreasonable to consider the CCVO as a document that can be substituted in the context of sub-article 38 (h). See opinion TA. 653 for the full transcript of the opinion. Among the issues discussed in opinion TA. 654rev was whether or not a requirement for a copy courier receipt required that it be signed. The credit in question allowed for the presentation of an original, copy or photocopy of a courier receipt evidencing the sending of documents to the applicant by that means. The submitted query did not indicate the form (original, copy or photocopy) of the courier receipt that was presented. The conclusion stated that if the receipt were a copy or photocopy, then it need not be signed. This highlights the need for issuing banks to be specific in relation to the requirements for documents when they are to be presented in copy form. The ISBP, at paragraph 32, states that copies of documents need not be signed. [On a similar note, where transport documents are required to be presented as a copy, paragraph 20 states that copies of transport documents are not transport documents for the purposes of articles 19-25 of UCP 600 and that where a copy transport document is to be presented, the credit must explicitly state the details that are to be shown.] See opinion TA. 654rev (Discrepancy 3) for the full transcript of the opinion. Does the statement, given by a nominated bank "Please be informed that the documents are accepted by us for maturity date June 05, 2008 (Jun 04, 2008 is a holiday in our country). At maturity date we will revert to the matter of payment of proceeds" imply that they have given a deferred payment undertaking? When questioned, they reverted stating that as they had not confirmed the credit they had no obligation to pay on the maturity date. Whilst the first sentence implies the acceptance of the documents for payment on the due date, the second qualifies it to the extent that further action is required before payment will be made. This was the view of the Commission. However, it can be seen how the choice of words can be seen to be different to the intention of the sender. The message is loud and clear to banks, be careful as to how you phrase the taking up of documents and clearly indicate whether or not you are undertaking to pay on the due date. See opinion TA. 655rev for the full transcript of the opinion. A credit requires presentation of an International Consignment Note - copy for Shipper. Does this require that the document must indicate "copy for shipper" or that it will be accepted provided it does not indicate that it is intended for anyone other than the shipper? The requirement in the credit implies that the document will be issued in a fanfold set of which one will be the copy for shipper. However, the document could be issued in a single form. The conclusion to the opinion reflected this option and stated that provided the document did not evidence it was intended for anyone other than the shipper it would be acceptable under the credit in question. See opinion TA. 656 for the full transcript of the opinion.