CAN A CERTIFICATE OF ORIGIN SHOW “FORM M NUMBER” WITHOUT THE ACTUAL NUMBER IF THE APPLICANT AGREES TO ACCEPT THE DISCREPANCY?

Understanding required data, Form M, and the limits of applicant–beneficiary agreements

In documentary credit practice, credits sometimes require documents to indicate specific reference numbers issued by government authorities or other institutions. One example is Form M, a document used in Nigeria. Questions may arise when the importer does not want the number shown or indicates that discrepancies will be accepted. Does this remove the requirement to comply with the credit?

QUESTION

Dear Sir,

Good day!

The LC shows that the Certificate of Origin must show Form M No. and Description of Goods.

My doubt here is that there is no specific Form M number (for example: Form M Number SEFASGPAJP12314) mentioned in the LC. Can we just mention “Form M Number” without inserting any number and proceed? Will this be a discrepancy?

The customer is in a free zone area and does not want the Form M number shown in any documents. The beneficiary has already requested an amendment, but the applicant says they will accept the discrepancy and release the documents. Hence, we would like to know whether this can be avoided by just mentioning Form M without the number, since the actual number is not mentioned in the LC.

Kindly also advise the clause in ISBP or UCP which supports this.

Regards,

Nishanth

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ANSWER

Dear Nishanth,

Thank you for your question.

What is Form M?

Form M is a document required by the Central Bank of Nigeria for the importation of goods into the country. It is used to monitor imports and foreign exchange utilization, and importers normally obtain it through an authorized commercial bank before shipment.

Because this requirement is specific to Nigeria, many exporters and banks outside the country may not be familiar with it. Nevertheless, once a documentary credit requires reference to a Form M number, that requirement must be treated like any other LC condition.

Compliance with the LC requirement

If a documentary credit requires that the Certificate of Origin must show the Form M number, the document must indicate an actual number.

A certificate of origin that merely states “Form M Number” without showing any number would normally be considered discrepant, because the specific information required by the credit has not been provided.

Applicant’s agreement to accept discrepancies

An agreement between the applicant and the beneficiary, or even a message from the applicant confirming that discrepancies will be accepted, does not guarantee that the issuing bank will refrain from raising discrepancies.

Under UCP 600, the issuing bank has an independent obligation to examine documents and determine compliance. In practice, banks normally raise discrepancies when documents do not comply, even if the applicant later decides to waive them.

Therefore, relying on a possible waiver is always uncertain and may cause delay, additional charges, or even refusal if circumstances change.

The safest course remains to amend the credit or provide the required number so that documents can be presented in compliance.

Relevant rules

• UCP 600 Article 14(d):
  Data in a document must comply with the terms and conditions of the credit. If required data is missing, the document is discrepant.
• ISBP 821 (general examination principles):
  Documents are examined to determine whether they appear on their face to comply with the credit. Therefore, when a credit requires a document to indicate specific information, that information must appear in the document.

Conclusion

If the credit asks for a Form M number, the number must be shown. Writing only the heading without the number would normally be discrepant, regardless of any prior understanding between the applicant and the beneficiary.

Practical tip from Mr. Old Man

It is always easier to add a number before presentation than to argue about it afterward.

I hope this clarifies your question.

Best regards,

Mr. Old Man

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