ICC Opinion TA925rev approved by the ICC Banking Commission
Last week, the ICC approved one new Opinion; namely TA925rev.
The topic for the Opinion is a refusal by the confirming bank after issuing banks refusal.
The background for the Opinion is as follows:
On 27.01.2022 the beneficiary presents documents to the confirming bank. The documents were taken up (without reserve) by the confirming bank.
On 03.02.2022 the confirming bank informed the beneficiary that they have received a refusal of the documents from the issuing bank, mentioning the following discrepancy:
“GROSS WEIGHT ON CERTIFICATE OF ORIGIN NOT AS PER THAT ON AWB AND PACKING LIST”
The confirming bank offered payment under reserve or payment after acceptance of documents by the issuing bank.
The key question asked is if the beneficiary insist on payment (subject to the confirmation), without reserve, or if the confirming bank is allowed to revise their acceptance of the documents?
The answer from the ICC is that once the confirming bank has taken up the documents, it can no longer claim that the documents do not constitute a complying presentation. This irrespective of whether the issuing bank have identified discrepancies in the documents not identified by the confirming bank.
In conclusion, the confirming bank is required to effect payment without reserve to the beneficiary
Interesting to note is that in the Opinion the ICC describe the phrase “taken up the documents” as follows: It is understood to mean that a bank has determined that the documents are in compliance with the terms and conditions of an LC and has informed the presenter of that fact.
Already now, review of the new Opinion can be found in lcviews premium duly linked relevant articles, paragraphs and topics.
Thanks to the ICC for taking good care of the LC!
Kind regards
Kim