The Istanbul Draft Opinions has landed
Beginning
November the ICC Banking Commission will meet in Istanbul. A “fixed” item on
the agenda is “DRAFT OFFICIAL OPINIONS OF THE BANKING COMMISSION AND LATEST
DOCDEX DECISIONS” – a one and a half hour slot in the afternoon of 6 November.
This time
there are 8 Draft Opinions in the sequence 806-813 to be discussed.
For me the
first read-through these 8 Draft Opinions left a somewhat “empty” impression.
What is there to discuss here in one and a half hour? However after the second
read-through a picture is drawn. A number of the Draft Opinions (3 in
particular) closely examines UCP 600 article 14(d) – i.e. when is a “conflict” of
data a discrepancy? … and suddenly it seems as if we are at a crossroad:
When I
started working with LCs a main discussing was if the documents presented under
an LC should comply “strict” or “substantial.”
With the
Opinions this time we take it one step further: The document examiner need to
carefully understand the date in the documents – and the context in which it
appears. We can call it “evaluated compliance” ….
Personally
I am really in doubt about a number of these. On one hand I really appreciate
that refusals are not based on nitty-gritty details with no relevance to
anything. On the other hand – the UCP 600 makes no distinction between
“important” and “unimportant” data. In fact article 14(d) reads:
Data in a document, when read in context with
the credit, the document itself and international standard banking practice,
need not be identical to, but must not conflict with, data in that document,
any other stipulated document or the credit.
It is ALL
data that should be compared to ALL data!
It is
unsure if the Technical advisers have had same doubt – at least you will find
some parts of the analysis that seems to totally disregard the content of
14(d).
Let’s take
a look:
ICC
Opinion TA.809
LC goods
description: “As per proforma invoice n. 104 dated 12/12/1012”
CMR
evidence proforma invoice number as 1074
I.e. 1074
instead of 104.
The
conclusion is that this is NOT a discrepancy. That conclusion is reached using
the following arguments:
* The CMR
included all other information as required by the terms and conditions of the
LC and was compliant in all aspects.
* The
addition of one character to the proforma invoice number within the CMR is not
sufficient grounds for refusal, particularly when the correct proforma invoice
number was stated in the invoice.
* Information
in respect of, for example, a proforma invoice number, is additional
information over and above that required by this document and its purpose.
* The
reference to the CMR number on the CMR is superfluous.
Further the
Draft Opinions makes reference ISBP 745 and quotes paragraph A3: “A misspelling or typing error that does not
affect the meaning of a word or the sentence in which it occurs does not make a
document discrepant.”
What is
“forgotten here is the examples used in this paragraph, i.e.:
For example, a description of the goods shown
as “mashine” instead of “machine”, “fountan pen” instead of “fountain pen” or
“modle” instead of “model” would not be regarded as a conflict of data under
UCP 600 sub-article 14 (d). However, a description shown as, for example,
“model 123” instead of “model 321” will be regarded as a conflict of data under
that sub-article.
So to
analyse the analysis:
* ALL the
arguments found the “Analysis” supporting that this is not a discrepancy is
actually NOT in line with UCP 600 article 14(d) – e.g.:
- There is no such thing as “additional information”!
- There is
no such things as superfluous data!
* Taking
outset in ISBP 745 paragraph A3 – this example is closer to “model 123” versus
“model 312” than it is to the misspelling of “machine.”
ICC
Opinion TA.810
Amount of
the drawing: USD 54.000.00
Amount
stated in required “Copy of Shipment Advice sent to the insurance company” USD
54.00,00
This one is
interesting! The analysis goes:
* As such
this is clearly a typing error, as “54.00,00” as is not a correct way to state
any amount.
* However
for this particular case – where the amount is in the shipment advise
the document fails to “fulfil” its function.
For that reason
the document is deemed discrepant.
For this
case what is interesting is that this – at the outset – is deemed a spelling
error; that would be accepted if it were in another document (the Draft opinion
is not specific in this respect – but that would be the only logical
conclusion).
Again
taking outset in ISBP 745 paragraph A3 – this example is clearly closer to
“model 123” versus “model 312” than it is to the misspelling of “machine.”
ICC
Opinion TA.811
Invoice: “PO
# SOL140430-01”
Packing
list: “PO #SOL140”
The
conclusion is that this is NOT a discrepancy. The analysis includes the
following statement:
The credit did not stipulate a PO number nor
any requirement for mentioning the PO number in any of the documents.
This
statement leads to:
Based on the information given in the query a
conflict between the two PO numbers cannot be determined.
Hmmm. The
first statement is NOT in line with UCP 600 article 14(d) (date need no be
required in order for it to be examined on the basis of 14(d)).
Secondly there
are no arguments bridging the first statement – and the conclusion: Why is
there no conflict? Surely there is a conflict! So what “context” deems this not
to be a discrepancy?
Also here
it seems that taking outset in ISBP 745 paragraph A3 – this example is clearly
closer to “model 123” versus “model 312” than it is to the misspelling of
“machine.”
So,
although I have sympathy with these 3 examples – it seems to me that they are
clearly NOT in line with UCP 600. And what is really troublesome, is that they place
the document examiner in a very very difficult position. I.e. when is “model
123” versus “model 312” a discrepancy –
and when is it not?
It will be
very interesting to hear the discussions in Istanbul on these 3 Draft Opinions.
They may materially change the practical application of UCP 600 article 14(d) –
i.e. ISBP 745 paragraph A3 can no longer be used after this.
Is that
what we want?
Take care
of each other and the LC.
Best
regards
Kim