"Poor Banker" versus "Smart Beneficiary" on "place of receipt different from port of loading"


[September 2007]

 

The UCP 500 included the following text in article 23,a,ii:

 

If the bill of lading indicates a place of receipt or taking in charge different from the port of loading, the on board notation must also include the port of loading stipulated in the Credit and the name of the vessel on which the goods have been loaded, even if they have been loaded on the vessel named in the bill of lading. This provision also applies whenever loading on board the vessel is indicated by pre-printed wording on the bill of lading

 

 

 This wording was not carried through to UCP 600.

At the same time ISBP (2007) dit not reflect paragraph 82 from ISBP (2003). Paragraph 82 had a direct link to the above lines from UCP 500.

 

Paragraph 82 from ISBP (2003) reads:

 

 If a Container Yard (CY) or Container Freight Station (CFS) is stated as the place of receipt and that place is the same as the stated port of loading (e.g. Place of Receipt: Hong Kong CY; Port of Loading: Hong Kong), these places are deemed to be the same, and therefore the specification of the port of loading and the name of the vessel in the "on board" notation are not necessary.

 

 

Many LC experts and specialists had the impression that because of the removal of the two above passages - the rule would not apply any more; i.e. that the "extended" on board notation was not necessary.

There are however many indicators pointing at the fact that notwithstanding these omissions - nothing has been changed.

 

The best example is Coastline newsletter number 12 by Gary Collyer; available at:

 

http://www.coastlinesolutions.com/news11.htm

 

Is this right? Is this wrong?

 

My personal opinion is that it is wrong: If nothing has been changed - then why remove the clear rule from UCP 500. I can not imagine way.

 

On the political scene there is mantra saying "what you can not explain - you can not defend".

 

 

With that in mind I overheard a phone conversation by total coincidence. I will relay the full un-edited transcript here. It is between the “poor banker” and the “smart beneficiary”:

 

 

 

 

           

 Poor banker:

God morning this is the poor banker. You have submitted documents under LC number GGG-45-A. They are at your usual high standard – there is however one small detail that you need to correct. The shipped on board notation on the bill of lading is insufficient. Since it indicates a place of receipt different from the port of loading, the on board notation must also include the port of loading stipulated in the LC as well as the name of the vessel on which the goods have been loaded

 

Smart beneficiary:

Why is that?

 

Poor banker:

Well – according to UCP 600 article 20,a,ii it must indicate that the goods have been shipped on board a named vessel at the port of loading stated in the credit.

 

Smart beneficiary:

But it does!? The required port is mentioned in the port of loading field – and it bears a pre-printed shipped on board wording. What is the problem?

 

Poor banker:

Since there is a place pf receipt different from the port of loading – it is not sufficiently clear that the on board wording relates to the vessel in the “port of loading” field.

 

Some bills of lading states that the shipped on board statement refers to the named vessel OR the conveyance carrying the cargo from the place of receipt.

 

Smart beneficiary:

Okay then, but am I correct in saying that what you are asking me right now was reflected clearly in the UCP 500 – but taken out of the UCP 600.

 

Poor banker:

That is correct.

 

Smart beneficiary:

Then kindly tell me why it was taken out of the UCP 600 – if it is still so.

 

Poor banker:

This was discussed with ICC’s Transport Commission and it was decided that the structure of this article should reflect the role of a bill of lading i.e., to cover shipment from a port to a port.

 

The “place of receipt different from port of loading part” as you mention was seen to actually encourage a bill of lading to evidence pre-carriage – whereas if this were the intention, the LC should have called for a multimodal transport document.

 

Smart beneficiary:

You confuse me a bit there. What you are saying indicates to me that such “place of receipt” would be something else than a port. How can you otherwise talk of multimodal transport document? If that was the case under UCP 500 – then how come this “place of receipt” is now a potential port under UCP 600?

 

Poor banker:

You said the word: “potential” – the point is that the banker must be 110% sure that the goods are on board at the required port!

 

Smart beneficiary:

Okay then. I must say that I simply do not understand why it was taken out if it is still so. Tell me this then: Is it not correct that paragraph 82 from the 2003 version of ISBP was not carried through to the 2007 version?

 

Poor banker:

That is correct!

 

Smart beneficiary:

Why?

 

Poor banker:

Because this paragraph was directly linked to UCP 500 article 23,a,ii – regarding the place of receipt different from the port of loading.

 

Smart beneficiary:

Does this mean that the practice reflected in ISBP from 2003 paragraph 82 does not apply anymore?

 

Poor banker:

Oh no. It still applies! There is an Opinion from the ICC with the same content. This one will also apply in respect of UCP 600 sub-article 20,a,ii.

 

Smart beneficiary:

Why was it removed then?

 

Poor banker:

Because the lines it referred to in the UCP 500 was removed.

 

Smart beneficiary:

But you just said it would refer to other lines – with same intent – in the UCP 600?

 

Poor banker:

Yes!

 

Smart beneficiary:

Why was it removed then?

 

Poor banker:

Because the lines it referred to in the UCP 500 was removed.

 

Smart beneficiary:

Ehhh hmm. Think we are going in circles. I will hang up now – I need to make a few phone calls. I must change the bill of lading, bank and payment instrument before the end of the day. So please excuse me. I am in a hurry. Goodbye.

 

Poor banker:

??!!


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LCViews - "Poor Banker" versus "Smart Beneficiary" on "place of receipt different from port of loading"