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:
“Shipping
documents”
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.
“Shipping
company”
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.
Shipping
marks
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
other document.
- 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
(article 23)
- 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
etc.
- 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!
Kim