Nesaruls comments on ICC Banking Commission Official Opinion TA 886
The ICC Banking Commission, in its recent Annual Meeting held on 09-11 April 2019 at Beijing, discussed and approved five new Official Opinions. Among these opinions, TA886 got more comments from the floor that the rest. The background for the query was that an LC that required a commercial invoice with an additional clause in field 47A, i.e.:
“Unless otherwise stated with in this documentary credit, all document must be issued in English, however, documents in languages other than English are acceptable provided they also bear the text in English language”.
The presented commercial invoice, was rather unusual as it was issued on a plain paper as opposed to beneficiary’s letterhead. The invoice included all required data both in Chinese and English language with the exception that the beneficiary’s stamp was only in Chinese language.
Subsequently, the issuing bank refused the presentation quoting the following discrepancy:
“INV. NOT APPEARING TO HAVE BEEN ISSUED BY BENEF. AS PER UCP ART.18 A I/ISBP ART.A21A,C.I”.
The ICC Banking Commission concurred with the issuing bank and concluded that the discrepancy is valid.
In the analysis of the Opinion, the ICC Banking Commission elaborated on the rationale in reaching the conclusion: “it had been made clear within the terms and conditions of the credit that any non-English text within a document must also be written in English language, thereby, in this case, allowing non-Chinese speakers to be in a position to identify whether or not the documents had been issued correctly. The wording in the credit modified the practice as described in ISBP 745 paragraph A21 (e).”
During the session, my comment was in conformity with the conclusion. However, the rationale, stipulated in the analysis part, was not strong enough to reach the mentioned conclusion.
I am of the opinion that there are two parts of the additional condition in the LC i.e.:
(a) All document must beissuedin English and
(b) documents in languages other than English are acceptable provided they also bear the text in English language.
Consequently, it is relevant to start with ISBP745, paragraph A20 (“Issuer of documents”) to address the fact that the commercial invoice was issued on plain paper i.e.:
“When a credit requires a document to be issued by a named person or entity, this condition is satisfied…. …. when there is no letterhead, when the document appears to have been completed or signed by, or for [or on behalf of], the named person or entity.”
Hence, the presented invoice has been “issued” – but is not issued in English language as the company stamp was in Chinese language. Furthermore, there was no other reference to this effect on the document itself. Nevertheless, a “company stamp” may be in a language other than required the LC as stipulated in ISBP paragraph A21 e):
“….the name of a person or entity,any stamps, legalization, endorsements or similar, and the pre-printed text shown on a document, such as, but not limited to, field headings, may be in a language other than that required in the credit.”
Despite the above exception, UCP 600 article 18 (a) (i) requires that“a commercial invoice must appear to have been issued by the beneficiary”.The issuing bank was actually unable to identify such issuance, due to the absence of “English text”, and because of that it is within its right to raise an appropriate discrepancy. The issuing bank has further reinforced the same expectation in part (b) of the additional condition by specifically requiring “documents in languages other than English are acceptable provided they also bear the text in English language”.
Therefore, in the above backdrop, either because of the specific requirement in part (b) of additional condition or the specific requirement of article 18 (a) (i) of UCP 600, the practice articulated in ISBP 745, paragraph A21 (e) is effectively modified.
Concluding the above, unless the beneficiary’s name appeared on the invoice in English language the discrepancy raised by the issuing bank is valid.