When West is North - TA.796rev
I once ran
orienteering, so believe me when I say that I know how hard it can be to
determine North from West.
Apparently
the LC world has the same challenge. This is illustrated by a – in fact –
rather trivial case – or rather ICC Opinion: TA.796rev.
I previously discussed this one at the Blog Post “New Draft Opinions & North European Port & LC Radar”
(http://www.lcviews.com/index.php?page_id190).
Just to
recap:
The basis
for the ICC Opinion 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.
The issuing
bank refused the presentation stating that Antwerp is not within the
geographical area or range stated in the LC.
Defending
the refusal the issuing bank referred to the Internet website
www.mapsofworld.com which classifies Belgium as a Western Europe country.
In the
Draft Opinion this view was endorsed – making the document discrepant.
The Draft
Opinion concluded as follows:
“Belgium is
in Western Europe, not Northern Europe. The document is discrepant.”
So
apparently (from the Draft Opinion); whether or not Antwerp is a Northern or Western seaport is totally
objective: It is Western!
It seems
however that the ICC National Committees do not consider it as objective as the
technical advisers of the ICC Banking Commission:
Of the ICC
National Committees that commented on the Draft Opinions discussed in Dubai
last month 14 agreed that Belgium is in Western Europe – whereas 16 ICC
National Committees disagreed to the conclusion.
In fact
this Draft Opinion attracted rather different comments from the ICC National
Committees:
“Issuing
bank has a duty to be more precise”
“The LC
requirement is ambiguous – and such falls back on the applicant”
“ICC Should
refrain from giving Opinions that are not strictly related to the rules”
“It is not
up to the ICC to define the geographical area of Europe”
Based on
these comments the conclusion was changed 180 degree; or rather “On 30 April
2014 West became North:”
First of
all the Analysis makes reference to UCP 600 article 14(a): that a bank must
examine a presentation on the basis of the documents alone.
Logically
this means that a bank should not have to visit an external source in order to
determine LC compliance. Therefore – the fact that www.mapsofworld.com
classifies Belgium as a Western Europe country, cannot be used as an argument
for the refusal.
Hmmmm. If I
turn back time to somewhere in the 1970es; then I was at school, and the
Internet was not there. www.mapsofworld.com was not there. Instead we did
something rather unique: We learned things!
For example
we had geography at school – and learned (again an example) where Belgium is ….
This piece of information has been stored in my brain ever since.
So I ask:
is my brain an external source? And if it is – then how can I examine any set
of LC documents? All the information I have to do that task is in fact stored
in my brain.
So – in
general – refraining from accepting websites to support any fact (and I do mean
“fact”) in an LC transaction is somewhat ambiguous and strange – because the
same facts may well be – or may not be - “available” in the brain of the LC officers
discussing a case like this one ….
That being
said – I am indeed happy about the rest of the revised ICC Opinion:
The ICC Banking
Commission makes in clear that it is not for them to define or determine
geographical areas or ranges.
For this
case – the LC requirement clearly is vague and clearly is ambiguous – and such
do in fact fall back on the applicant. For that reason the document is not
discrepant.
Although
there is a somewhat logic breach in saying that “North European Port” is
ambiguous (compasses and maps has been invented) – the mere fact that any
issuing bank has the nerve to issue such refusal – and even to defend if –
makes the answer feel good.
It is a bit
sad that the Draft Opinion was so much “off track” – but that hopefully is soon
forgotten – and we now have a good Final Opinion to throw at the bank that does
this next.
So I thank
you deeply ICC Banking Commission for taking care of the LC.
Best
regards
Kim