ISBP 745 from a transport angle
The ISBP (short for: International Standard Banking Practice for the Examination of Documents under Documentary Credits) is a publication by the International Chamber of Commerce describing some of the practices related to the banks examination of documentary credit documents. Since 2011 the ISBP has been subject to a revision process, and the final “new” version is expected approved by the ICC Banking Commission 17 April 2013. (After approval it will be known as ISBP 745).
Naturally the ISBP is essential for exporters making the documents to be presented under an LC. The fact is however that also transport companies, such as freight forwarders, need to be familiar with the ISBP in order to navigate safely through the “rough documentary credit waters,” as there are quite a number of ISBP paragraphs that deals with transport documents. In the new ISBP there are some paragraphs that are new – and there are some that has been updated.
Below are some examples of the transport issues dealt with in the new ISBP:
“Copies of transport documents” and “documents for which the UCP 600 transport articles do not apply.” (E.g. Delivery Note, Delivery Order, Cargo Receipt, Forwarder’s Certificate of Receipt, Forwarder’s Certificate of Shipment.)
When the LC requires such document, then the relevant transport article (UCP 600 article 19-25) does not apply. In essence the document is to be examined only to the extent expressly stated in the credit, otherwise according to UCP 600 article 14(f).
Although this sounds logic – there is a great risk hidden in this. The LC may often indicate “transport document requirements” even where the “transport” document is not to be examined on the basis of the relevant UCP 600 transport article. Such requirements may well be “non documentary conditions” that are to be disregarded – of course unless they are stated in the document, in which case they must not be in conflict with the LC requirement.
The date required on a transport document
In the new ISBP a confusion from the previous ISBP has been cleared: original transport documents, are to indicate a date of issuance, a dated on board notation, a date of shipment, a date of receipt for shipment, a date of dispatch or carriage, a date of taking in charge or a date of pick up or receipt, as applicable.
Boxes, fields or spaces to be completed
The new ISBP underlines that the fact that a document has a box, field or space for data to be inserted does not necessarily mean that such must completed. The example used is taken from an air waybill: I.e. the box titled “Accounting Information” or “Handling Information” commonly found on an air waybill. Such need not be completed.
Expressions not defined in UCP 600
The new ISBP defines a number of expressions that should not be – but commonly are – found in LCs. Some of those are related to transport:
Which means all the documents required by the LC, except drafts, teletransmission reports and courier receipts, postal receipts or certificates of posting evidencing the sending of documents.
The context is when the expression is used of the issuer of a certificate, certification or declaration relating to a transport document. In such case any one of the following may issue or sign the document: carrier, master or, when a charter party bill of lading is presented, the master, owner or charterer, or any entity identified as an agent of any one of the aforementioned.
The new ISBP includes 3 paragraphs on shipping marks. The following is important to know:
- The data in a shipping mark
indicated on a document need not be in the same sequence as in the LC or in any
- A shipping mark indicated on
a document may show data in excess of what would normally be considered a
“shipping mark” such as net and gross weight, “this side up” or “fragile.”
- When the transport document
covers containerized goods then it may only show the container number, with or
without a seal number, under the heading “Shipping mark”.
The practice regarding the UCP 600 transport documents
The new ISBP includes paragraphs regarding the following UCP 600 transport documents:
- TRANSPORT DOCUMENT COVERING
AT LEAST TWO DIFFERENT MODES OF TRANSPORT (“multimodal or combined transport
document”) (Article 19)
- BILL OF LADING (article 20)
- NON-NEGOTIABLE SEA WAYBILL
(article 21) (New to the ISBP)
- CHARTER PARTY BILL OF
LADING (article 22)
- AIR TRANSPORT DOCUMENT
- ROAD, RAIL OR INLAND
WATERWAY TRANSPORT DOCUMENTS (article 24)
These provide a detailed walkthrough the abovementioned transport documents describing topics such as:
- When to apply the various
transport document articles in the UCP 600 (the documentary credit rules)
- How the transport document
is to be signed
- Onboard notations, shipment
- Place of final destination,
port of discharge etc.
- Consignee, order party,
shipper and endorsement and notify party
- Transhipment, partial
shipment and determining the presentation period
- Clean transport documents
- Goods description indicated
on a transport document
- Indication of name and
address of delivery agent at port of discharge
- Corrections and alterations
- Freight and additional costs
- Release of goods with more
than one transport document to be surrendered
There is much news to these paragraphs. Here are some examples:
When to use article 19
Contrary to a previous ICC Opinion it is now stated that:
“When a credit requires the presentation of a transport document other than a multimodal or combined transport document, and it is clear from the routing of the goods stated in the credit that more than one mode of transport is to be utilized, for example, when an inland place of receipt or final destination are indicated, or the port of loading or discharge field is completed but with a place which is in fact an inland place and not a port, UCP 600 article 19 is to be applied in the examination of that document.”
This means that if the LC calls for a bill of lading, but indicates (as an example) the following:
44E – Port of loading: Hong Kong
44F – Port of Discharge: Copenhagen
44B – Place of delivery: Sorø (Denmark)
then this is an indication that a multimodal transport is to be covered, and hence the presented transport documents is to be examined on the basis of UCP 600 article 19.
A branch of the carrier can now sign a transport document:
“When a bill of lading is signed by a named branch of the carrier, the signature is considered to have been made by the carrier.”
Transport document issued by freight forwarder acceptable / not acceptable
The previous ISBP deals with the situation where the LC stipulates that a transport document issued by a freight forwarder is acceptable (the effect of this is that the transport document may be signed without indicating the capacity in which it has been signed or the name of the carrier).
The new ISBP adds to this by including the opposite situation where the LC stipulates that a transport documents issued by a freight forwarder is NOT acceptable. Such requirement has no meaning in the context of the title, format, content or signing of the transport document unless the LC provides specific requirements. In the absence of such the transport document will be examined according to the requirements of the relevant UCP 600 transport article.
Release of goods with more than one bill of lading to be surrendered
The example added at the end to this paragraph is also new to the ISBP:
“A bill of lading is not to expressly state that goods covered by that bill of lading will only be released upon its surrender together with one or more other bills of lading, unless all of the referenced bills of lading form part of the same presentation under the same credit.
For example, “Container XXXX is covered by B/L No. YYY and ZZZ and can only be released to a single merchant upon presentation of all bills of lading of that merchant” is considered to be an express statement that one or more other bills of lading, related to the referenced container or packing unit, must be surrendered prior to the goods being released.”
All in all it is highly recommended that transport companies that are issuing transport documents to be presented under a documentary credit gets acquainted with the ISBP. This will make their life easier.
For more information on the transport issues related to documentary credits: Kim Sindberg: “UCP 600 Transport Documents” (http://www.remburs.com/UCP%20600.htm)
For transport companies in the need of LC help: http://www.kimsindberg.com/transport.html
Take care of each other – and the LC!
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