Copies, Coverage Dates, and Telex Release B/Ls: Three Practical LC Questions

In day-to-day documentary credit work, seemingly small details—dates on insurance documents or wording in transport clauses—can lead to real examination dilemmas.
A reader recently sent three practical questions that many trade finance practitioners have probably encountered at least once.

Question

Dear Mr. Old Man,

Greetings of the day. I hope you are doing well.

May I ask for your views on the following issues:

1. Copy of an insurance document dated after shipment

I came across an LC that required a copy of an insurance document. The copy presented was dated after the shipment date.

As per ISBP, copies of documents need not be dated. If a copy of an insurance document is dated after shipment, can this be treated as a valid discrepancy?
Also, should a copy of an insurance document be examined in light of UCP 600 Article 28?

2. Insurance document without an issue date but showing an effective date

I saw an insurance document that did not indicate an issue date but did indicate an effective date of coverage.

ISBP states that drafts, insurance documents, and original transport documents are to indicate a date of issuance. If the insurance document does not show an issue date but shows an effective date of coverage prior to shipment, would this be acceptable?

3. Bill of lading clause requiring originals marked “Telex Release”

An LC required:

“3 originals and 3 copies of Bill of Lading … marked Telex Release.”

My understanding is that once the originals are surrendered to the carrier and the bill of lading is marked “Telex Release,” the originals are no longer available for presentation. Would such a clause be contradictory?

Sorry for raising several questions at once, and thank you in advance for your guidance.

With much respect,

Priya

_______

Answer

Dear Priya,

Thank you for your thoughtful and very practical questions. Let me address them one by one.

1. Copy of an insurance document dated after shipment

It is correct that under ISBP, copies of documents are not required to be dated.

However, when a copy does show a date, that date becomes part of the data to be examined. Any data in a document, even a copy, must not conflict with:

• the credit,
• the document itself, or
• international standard banking practice.

Under UCP 600 Article 28(e), insurance coverage must be effective not later than the date of shipment.

If a copy of an insurance document shows a date later than shipment and does not indicate—by note, endorsement, or stated effective date—that coverage commenced on or before shipment, the document suggests that coverage may have been late. In such circumstances, refusal would be justified                 .

So yes, a discrepancy may be raised—not because the document is a copy, but because the data it contains conflicts with the requirement for timely insurance coverage.

2. Insurance document without an issue date but showing an effective date

 ISBP recognizes that an insurance document may indicate either:

• a date of issuance, or
• an effective date of coverage.

What matters under UCP 600 Article 28(e) is that coverage is effective not later than shipment.

Therefore, if an insurance document does not show an issue date but clearly indicates an effective date of coverage that is on or before the shipment date, the document is acceptable.

3. Requirement for originals marked “Telex Release”

A Telex Release Bill of Lading (also called a Surrendered Bill of Lading) allows cargo to be released without presentation of the original bills of lading, because the originals have already been surrendered to the carrier at the port of loading.

Once surrendered:

• the originals are retained by the carrier or its agent, and
• the shipper normally retains only copies marked “Surrendered” or “Telex Release.”

For this reason, an LC clause requiring presentation of original bills of lading marked “Telex Release” is contradictory in practice and creates ambiguity, since originals marked in this way are normally no longer available to the beneficiary.

Such wording usually results from careless drafting, and in practice banks should seek clarification or amendment where possible.

I hope these comments help clarify the issues.

Best regards,

Mr. Old Man