2 new ICC Opinions approved by the ICC Banking Commission
Yesterday, the ICC met to discuss (and approve) 2 new Draft Opinions.
The Opinions were:
470/TA947rev: Deduction of issuing banks charges
The query concerned an LC that was unconfirmed and available and payable with the issuing bank. The LC did not include information as to who will bear the changes.
When paying, the issuing bank deducted USD 54,000 arguing that this was according to the contract between applicant and beneficiary as well as “prevailing circular of our bank”.
The main question asked was if the beneficiary should accept the deduction of the issuing bank’s charges.
The response from the ICC was “no”. Basically the issuing bank is obligated to recover these charges from the applicant elsewhere and to reimburse the deducted amount.
470/TA948rev (sequence 1): Draft not endorsed
The query concerns an LC calling for “Drafts at: 90 DAYS FROM INVOICE DATE”, “Drawee: (Issuing Bank)” as well as requiring “BENEFICIARY DRAFT DRAWN ON (ISSUING BANK) AT 90 DAYS FROM INVOICE DATE…”
The presented draft were issued to the order of the beneficiary, not endorsed by the beneficiary. On that basis, the presentation was refused stating, “B/E NOT ENDORSED TO (name of the issuing bank)”.
The ICC stated that the discrepancy was not valid, mainly on the basis that there was no explicit requirement in the LC for the draft to be endorsed and that it is not international standard banking practice for a draft payable to the beneficiary to be endorsed.
470/TA948rev (sequence 2): Packing list is not detailed
The query concerns an LC calling for, “PACKING LIST IN 1 ORIGINAL & 2 COPIES MENTIONING TOTAL QUANTITY OF GOODS AS PER LC AND COMMERCIAL INVOICE AND ALSO SPECIFYING TYPES OF TOTAL PACKING OF GOODS.”
Two separate packing lists were presented.
The packing lists were divided into sections headed by a description of the packing type ("Pallet type A", "Special Pal[l]et” and Pallet type E" and containing details of individual items contained in that packing unit, including their specific description, quantity and unit of that quantity.
The presentation was refused citing the following discrepancy, “ACTUAL PACKING DETAILS NOT MENTIONED IN PACKING LIST”.
The view of the ICC was that the refusal was not correct, as the packing list complies with the LC requirement to specify types of total packing of goods.
So again, thanks to the ICC for taking good care of the LC.
Reviews of the new ICC Opinions (duly linked to relevant articles and paragraphs) have been added to lcviews premium.
Kind regards
Kim