UCP IN WONDERLAND
UCP IN WONDERLAND
Article 24 as Kim Revises in Dream
Editor's note: Kim Christensen is a great thinker. He thinks in real situations. He thinks in dreams. He thinks solutions. He thinks innovations. In dream he innovates article 24 to present it as a perfect solution to users of LC. He is great a writer - a prolific writer. What he thinks he writes. What he dreams he writes. For example, dream article 24. What he writes - he writes to share. His "thinking and writing" benefits the LC world. He is a great commentator. He comments - on UCP, on UCP draft, on ISBP, on banker's views. His commentary serves to enrich and improve LC knowledge management.
Article 24 of the UCP 500 covers the “Non-negotiable Sea Waybill”. I would rather see this (along with the other transport articles) taken out of the UCP – and into the ISBP. There are many reasons for that. The most important is to collect all the provisions dealing with the examination of documents in one document, in order to provide a single tool for the exporter in the phase of producing the documents.
As a consequence of this the following is based on the ISBP standard rather than the UCP standard.
In addition to that the order of the information has been changed to the same order as can be found in the document itself.
Some of the provisions may also apply to other transport documents – but are included here in order to illustrate my view on these items.
Introduction to the Non-negotiable sea waybill
The Non-negotiable sea waybill is by nature different from the traditional bill of lading. First of all it is not a document of title – i.e. it is not possible to transfer the rights to the goods by endorsing the document. Secondly the document itself does not provide access to the goods.
When choosing the document to be required under the credit these issues should be considered. In general the Non-negotiable sea waybill is a “lighter” document than the bill of lading, and may ideally be used where it is not likely that the ownership of the goods are to be transferred while at sea.
There are a number of ways for the parties to protect themselves – and for the Non-negotiable sea waybill to make a good match with the credit; e.g.
Require that the Non-negotiable sea waybill be consigned to the issuing bank.
Require that the shipper transfer the right of control to the consignee (is-suing bank).
 No doubt this statement is debatable – and it may be argued that this has never been tested in court – and that it may be different in various jurisdictions – and that it is not for the ICC to comment on such issues. I would accept all such arguments – but see no other way to push the usage of this document – and create the practice that seems to be desperately lacking here
Application of the Non-negotiable Sea-waybill
If a credit requires presentation of a Non-negotiable sea waybill, the transport document presented must not show that it is “negotiable” or words to that effect. This would include being issued “to order”.
Consignor / Consignee
a) The document may show a consignor/shipper different from the beneficiary mentioned in the credit.
b) The credit should stipulate the consignee to be mentioned on the Non-negotiable sea waybill. If the credit does not so stipulate, the beneficiary should be mentioned as consignee.
Port-to-port / Multimodal transports
The Non-negotiable sea waybill covers either port-to-port ir multimodal transports – depending on the wording of the credit.
The Non-negotiable must show transport of the goods between the port(s)/place(s) mentioned in the credit.
Any transport leg (s) outside the port(s)/place(s) mentioned in the credit will be disregarded.
If the credit requires transport from a place (rather than a port) the Non-negotiable sea waybill must indicate that goods are taken in charge, received for shipment, or shipped on board in the place indicated in the credit.
In the credit requires transport from a port, the Non-negotiable sea waybill must show that goods are shipped on board.
Such on-board notation must unambiguously indicate that the goods are shipped on board in
the port mentioned in the credit;
on a named vessel; and
the date of shipment.
If a pre-printed “Shipped on board” Non-negotiable Sea waybill is presented, its issuance date will be deemed to be the date of shipment unless it bears a separate dated on board notation, in which event the date of the on board notation will be deemed to be the date of shipment whether or not the on board date is before or after the issuance date of the bill of lading.
“Shipped in apparent good order”, “Laden on board”, “clean on board” or other phrases incorporating words such as “shipped” or “on board” have the same effect as “Shipped on board ”.
The information regarding where the goods are taken in charge or shipped on board and the destination may be shown in the relevant fields on the document, or anywhere else on the document
Clean non-negotiable sea waybills
Clauses or notations on Non-negotiable Sea waybills that expressly declare a defective condition of the goods and/or packaging are not acceptable.
The word “clean” need not appear on a Non-negotiable sea waybill even though the credit may require a “clean on board sea waybill” or one marked “clean on board”.
If the word “clean” appears on a Non-negotiable sea waybill and has been ^Delete^d, the Non-negotiable sea waybill will not be deemed to be claused or unclean unless it specifically bears a clause or notation declaring that the goods or packaging are defective.
Corrections and alterations
Corrections and alterations on a Non-negotiable sea waybill must be authenticated. Such authentication must appear to have been made by the carrier, master (captain), the multimodal transport operator or any of their agents (who may be different from the agent that may have issued or signed it), provided they are identified as an agent of the carrier or the master (captain) or the multimodal transport operator.
If a credit requires that a Non-negotiable sea waybill shows that freight has been paid or is payable at destination, the Non-negotiable sea waybill must be marked accordingly.
Applicants and issuing banks should be specific in stating the requirements of documents to show whether freight is to be prepaid or collected.
If a credit states that costs additional to freight are not acceptable, a Non-negotiable sea waybill must not indicate that costs additional to the freight have been or will be incurred.
Such indication may be by express reference to additional costs or by the use of shipment terms that refer to costs associated with the loading or unloading of goods such as Free In (FI), Free Out (FO), Free In and Out (FIO) and Free In and Out Stowed (FIOS). A reference in the transport document to costs which may be levied as a result of a delay in unloading the goods or after the goods have been unloaded, e.g. costs covering the late return of containers, are not considered an indication of additional costs in this context.
Signing and freight forwarders
The name of the carrier must appear from the Non-negotiable Sea waybill.
The Non-negotiable Sea waybill must be signed by:
The carrier or a named agent for an on behalf of the carrier, or
The master or a named agent for and on behalf of the master
The multimodal transport operator or a named agent for and on behalf the multimodal transport operator
The capacity of the party signing the document must appear from the document.
A Non-negotiable Sea waybill may be issued by a freight forwarder.
The Credit should not use terms like “Non-negotiable Sea waybill issued by freight forwarders are not acceptable” or “Non-negotiable Sea waybill issued by freight forwarders are acceptable”. Instead the credit should be precise as to the intention regarding who may / may not issue the document and/or the capacity of the issuer.
a) If a credit states “Freight Forwarder’s sea waybill is acceptable” or uses a similar phrase, then such will be disregarded, as this is already permitted.
b) If a credit states “Freight Forwarder’s sea waybill is not acceptable” or uses a similar phrase, then the document must not appear to be issued by a freight forwarder. There are a number of ways, by which such appearance can be identified. Some examples are:
* If the document issued is a “FWB – non-negotiable FIATA Multimodal Transport Waybill” or “HAWB – House Air Way Bill”
* If the form used is that of an international or national association of freight forwarders. I.e. FIATA or BIFA.
* The words “freight forwarder” forms part of the name of the issuer of the document.
This clause has no effect on the capacity of the party signing the document, and paragraph x16 should still be complied with.