New Draft Opinions & North European Port & LC Radar

The ICC Banking Commission have just circulated a new “bundle” of Draft Opinions; to be discussed at the meeting in Dubai this April. There are a total of 11 Draft Opinions. 2 relates to Collections – URC 522 – the rest to UCP 600 – with the comment that one is regarding a guarantee presented under an LC.


It is clear from the writing style that they are no longer drafted by Gary Collyer; especially in the analysis part – where – in many cases – the “analysis” merely consists of quotes from UCP and ISBP – and a re-statement of the facts of the query. This for example is the case in the query I will discuss later in this blog post, where there is no real analysis leading to the conclusion. In this case it is badly needed.


That being said – the majority of the Draft Opinions are well written – and answer the query in a good way.


That being said, when reading through these Draft Opinions there were a couple of times where I thought: Either this is totally off-track or someone have thrown a magnet into my “LC Radar” …. I hope it is not the latter – but in this and the coming blog posts, I will present these to you – and hope that you will share with me your view on this …. So that I can adjust my “LC Radar” …. If needed ….


So – here goes:


The first Draft Opinion I will discuss is TA796 – and is in fact a “trivial” case. The outset is an LC that calls for a bill of lading showing shipment from “Any North European Port.”

The presentation showed that the goods were shipped on board in Antwerp.


And bang: The issuing bank refused the presentation stating that Antwerp is not within the geographical area or range stated in the LC.

In the following communication the issuing bank referred to the internet website which classifies Belgium as a Western Europe country.

In the Draft Opinion this view is endorsed – making the document discrepant.


I do acknowledge that Antwerp is on the Western coastline of Europe – but I would for sure consider Belgium as a part of Northern Europe. For the purpose of LCs it makes no sense talking about Northern, Southern, Eastern and Western Europe – it simply is tangled together too much – and there are too many “grey zones” where one can argue for different directions.

If one would “divide” Europe for the purpose of LCs then the only reasonable approach would be to do so in “Northern Europe” and “Southern Europe;” Italy and Spain clearly falling in the latter range and Finland clearly in the first. However even here there are borderline cases – where an interpretation is required. There simply are no clear cuts here….


Since the requirement (as argued above) clearly is open to interpretations, it is ambiguous, and such ambiguity falls back on the applicant (as per ISBP 745 paragraph v).


For this reason I think that the conclusion reached are 180 degrees wrong: For the purpose of the LC requirement “Northern European Port” – shipment from Antwerp is close enough. I surely hope that the conclusion will be changed.


The lesson learned here is that the higher degree of precision in drafting the LC – the higher the chance that the transaction will not be “interrupted” by trivial disputes, loose interpretations …. and in fact silly and pointless discussions like the above.


Anyway: What do you think?


Take care of each other and the LC.


Best regards



Please Login to Leave Your Comment

Viewer's Recent Comments

Be the first to make a comment.

What's Inside

Login To LCViews

   Email Address

   Remember   Forgot Password

Latest Blog Post

Fob, Fca And The Incoterms In The Pipeline
The High Risk Ghost In Trade Finance
Combating Trade Based Money Laundering: Rethinking The Approach
The New Icc Opinions Are Out
The Ucp 600 Revision – Now You See It. Now You Don’t

Latest Single Window Questions

Lc Confirmation
Refusal To Negotiate Documents By A Nominated Bank
Definition Of Shipping Company
Ta629 And Isbp D8
Cost Additional To Freight

LCViews - New Draft Opinions & North European Port & LC Radar