ICC Banking Commission Fall meeting October 2023
Last week, the ICC Banking Commission met in Paris. A couple of the items on the agenda will be shared in this blog post. I will focus on the new Opinions (circulated by the ICC today) as well as the next steps for the ISBP.
New Opinions
4 New Draft Opinions, TA931-934, were discussed and approved. Below is an overview:
TA931rev
This Opinion includes two different issues.
One is linked to the invoice called for in an LC where the requirement was that it must “confirm” that it is as per quotation number xxx.
The presented (signed) invoice did mention the quotation number – but not the word “confirm”.
The view of the ICC Banking commission is that the reference to the quotation number in the invoice is a confirmation that the invoice is issued as per the quotation number.
The other issue is linked to a required carrier/agent certificate. The query refers to both the original requirement in the LC – as well as a wording that was in a subsequent requirement.
The presentation actually contained two originals of the required certificates. However, one of those were in the extra set of documents for the issuing bank's records.
The presentation was refused stating that the certificate was “short of one original”.
This was not deemed a valid discrepancy.
TA932rev
This Opinion addresses a collection question where the collection is subject to URC 522.
After receiving the collection, the collecting bank did not pay, and following various tracers, the collecting bank responded that they do “not perform documentary credit services (Cash against Documents)” and that they “consider this file as closed”.
Later the remitting bank found that the goods were released against the presentation of all original bills of lading, duly endorsed by the collecting bank in favour of the drawee.
The view of the ICC Banking Commission is that since the collecting bank did not comply with the collection instructions, they are responsible for breach of its obligations.
Likewise, the Opinion also notes that “URC 522 does not impose any payment obligation on banks; any remedy would be a matter of applicable law and outside the URC 522.” Also, the issue of interest is outside the URC 522.
TA933rev
The query deals with an LC that includes a presentation period of 21 days after the date of shipment.
The forwarding schedule from the nominated bank was dated 22 days after the date of shipment. Also, the forwarding schedule mentioned that all terms and conditions of the LC had been complied with. The presentation was refused on the basis of late presentation.
The view of the ICC Banking Commission is that the statement in the forwarding schedule did satisfy the requirement in UCP 600 sub-article 29 (b). Hence, this is not a valid refusal.
TA934rev
This Opinion includes two different issues.
One is linked to a presented CMR consignment note which was the “copy for sender” and not the “original for shipper” (as was required by the LC). The presentation was refused on that basis.
The view of the ICC Banking Commission was that this is not a valid discrepancy. This was based upon ISBP 821 paragraph J7, which basically says that “original for consignor or shipper” are considered synonymous to the “copy for sender”.
The other issue is regarding an EUR1 certificate. The LC requirement was that all documents must be issued in English language. However, this certificate included the word “Tunisko” (the Czech for "Tunisia") as well as the ISO code “TN”. By using the ISO code “TN” it was clear that the document fulfilled its required function and therefore the discrepancy was not valid.
Except for TA932rev, all ICC Opinions deal with spurious discrepancies. In other words, acts by banks that do not take care of the LC! This is not good, and during the coming weeks, there will be a deep dive into new ICC Opinions TA931rev, TA933rev and TA934rev.
ISBP – Next steps
Also on the agenda of the ICC Banking Commission meeting was the next steps of ISBP.
Basically, it is acknowledging that most problems in the handling of LCs is related to “document examination”. For that reason there may be a need to review ISBP 821 and therefore the SteerCo of the ICC have approved the below actions (bullets from the presented PowerPoint slide):
* A small Working Group, consisting of the “Briefing Papers” Technical Advisory team, will evaluate ISBP 821 to assess existing content in line with current market practice.
* To the extent it is relevant, such review is to consider digital practices.
* Work will commence November 2023.
* Subsequently, the Working Group will provide a final report during the April 2024 Global Banking Commission Plenary session.
* ICC National Committees will then be provided with the opportunity to comment and decide on potential next steps, if any.
The intention is that the result of this work will be presented at the April 2024 meeting in the ICC Banking Commission.
It will be interesting to follow this work.
All for now – and do remember to take care of yourself and the LC.
Kind regards
Kim
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