ARTICLE 19 OR ARTICLE 20?

GerhardH – Germany
Posted 26 Jan 11 |

Dear all,

L/C requires:
FULL SET OF CLEAN ON BOARD OCEAN BILLS OF LADING
L/C shows:
:44E: EUROPEAN MAIN SEAPORT
:44F: QINGDAO SEAPORT,CHINA
:44B: END-USER

Nothing is said in the L/C, that B/L should/must show place of final destination.

We have presented a Bill of Lading to confirming bank showing port of loading and port of discharge as per L/C. Now we received the following discrepancy: B/L not showing final destination, although mentioned under field 44b.
In our opinion it is not a discrepancy, as B/L must only show ports of loading and discharge as per art. 20 UCP 600.

Please let me know your opinions to this discrepancy.
Thanks in advance.
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GlennRansier – United States
Posted 27 Jan 11 |

It really depends on what the LC states. In general, if either 44 a or b are requested in a LC then a multimodal BL is required. This BL type could be structured to satisfy both UCP Article 19 or 20 and the named places in the LC would match those indicated on the BL. In this case if the LC field 44 a. actually quoted "end user" then this is not a place and as such the BL would not need to quote it.
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DUC N.H – Viet Nam
Posted 28 Jan 11 |

I agree with Glenn. End-user is not a concrete place. The applicant bears the risk of any ambiguity in its instructions to issue or amend a credit (ISBP para. 2).

Regards,
Duc N.H
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GerhardH – Germany
Posted 28 Jan 11 |

Thanks for your answers.

But in our opinion, even if L/C would show a concrete place under 44B, this must not be shown on the bill of lading.
L/C requires a "bill of lading" and not a "multimodale transport document", therefore art. 20 applies. And art. 20 only requires port of loading and port of discharge as per fields 44E and F.

Do you agree?
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DUC N.H – Viet Nam
Posted 29 Jan 11 |

Hi Gerhard,

I’m afraid I do not agree with you. According to ICC Banking Commission Recommendations in respect of On Board Notations, transport documents must be examined under the article that is applicable to the conditions stated in the L/C. These conditions include: the type of document that is to be presented and the details given with respect to the shipment of the goods e.g., those shown in fields 44A, E, F or B of the MT700, 710 or 720. If the L/C is incorporated with any 3 fields from 44A, E, F or B (or all of them), the appropriate transport document that should be required is Multimodal or Combined Transport Document and it is to be examined under Article 19 and not Article 20.

Back to your scenario, notwithstanding that the type of document required under the L/C is Bill of Lading, the transport document presented shall be examined under Article 19 as the L/C shows 3 fields 44E, F and B. As said in my previous post, “end-user” indicated in field 44B is not a concrete place, hence, the applicant bears the risk of ambiguity in its instructions to issue or amend a credit. It’s not a discrepancy.

Looking forward to hearing from other experts.

Regards,
Duc N.H
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Note: Thread of discussion is quoted from DCPro Forum.