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DESCRIPTION OF GOODS IN INVOICE

By Mr Old Man
Posted on September 23, 2010
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________________________________________
From: Ayman Mesaowa []Sent: Thu 9/23/2010 2:33 AM
To: Nguyen Huu Duc (DNG)
Subject: certificate and declaration under ispb no.8 &13

Dear Mr. OLD MAN,

know you a long time from my search on the internet about subjects about lcs, I really admire to your large knowledge of trade finance field and lcs i want to get your value opinion about two cases which faces me as i check documents.

1) if invoice shows more discreption of goods which exceeds than showed in lc under field 45a. .
can it be considered as more details and as well as the discreption requierd in the lc showed in the invoice . it `s not consider discrepancy .

2) in case a certificate or decrlation required, it must be dated and signed or not .

I’am looking forward to receiving your appreciated reply .

Best regards,
ayman ibrahim mesaowa
trade finance officer NBE

________________________________________
From: Nguyen Huu Duc (DNG)
Sent: Thu 9/23/2010 9:13 AM
To: Ayman Mesaowa
Subject: RE: certificate and declaration under ispb no.8 &13

Dear Ayman Mesowa,

1) The description of the goods, services or performance in the invoice must correspond with the description in the credit. There is no requirement for a mirror image. For example, details of the goods may be stated in a number of areas within the invoice which, when collated together, represent a description of the goods corresponding to that in the credit.

It’s not easy to give a correct answer for all cases without seeing the documents. I wish to give you two examples:

Example 1: (based on ICC Opinion R584/TA564rev).

– Description of goods in LC:
Men's suede jackets, plain suede fabric"

– The invoice presented:
Men's suede jackets (imitation suede with 100 per cent polyester knitted backing) plain suede fabric”

It is a discrepancy. The addition of the words "(imitation suede with 100 per cent polyester knitted backing)" is not part of the description of the goods in the credit. The word "imitation" indicates a different category or classification of the goods, which is not apparent in the goods description within the credit. The addition of the word "imitation" is grounds for refusal on the basis that the goods description in the invoice does not correspond with that in the credit.

Example 2:

– Description of goods in LC:
500 packages of frozen seafoods – Trade term: CIF Hong Kong port”
Total amount: USD10,000.-

– The invoice presented:

Frozen seafoods

Details as follows:

It is NOT a discrepancy.

2) It is understood from the below guiding provisions of ISBP that a SEPARATE certificate and declaration must be dated and signed, and that the one that appears in another document which is signed and dated need not be signed or dated.

ISBP para. 8: “A certification, declaration or the like may either be a separate document or contained within another document as required by the credit. If the certification or declaration appears in another document which is signed and dated, any certification or declaration appearing on that document does not require a separate signature or date if the certification or declaration appears to have been given by the same entity that issued and signed the document.”

ISBP para. 13: “Although it is expected that a required certificate or declaration in a separate document be dated, its compliance will depend on the type of certification or declaration that has been requested, its required wording and the wording that appears within it. Whether other documents require dating will depend on the nature and content of the document in question.”

ISBP para. 37: “Even if not stated in the credit, drafts, certificates and declarations by their nature require a signature.”

Best regards,
Mr. Old Man

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15 Comments

15 Comments

  1. anonymous

    September 24, 2010 at 10:09 am

    zac writes:Dear Mr Old Man, When the LC only indicates UCP600 as governing rule but not ISBP, should a bank also make references to ISBP provisions in addition to UCP when checking documents to determine clean/discrepant? Please also advise on what other occasions do we use ISBP. Thanks.

    Reply

  2. mroldmanvcb

    September 24, 2010 at 11:09 am

    Dear Zac,As seen from the ISBP’s introduction, the international standard banking practices documented in ISBP 681 are consistent with UCP 600 and the Opinions and Decisions of the ICC Banking Commission. ISBP does not amend UCP 600. It explains how the practices articulated in UCP 600 are applied by documentary practitioners. The ISBP and the UCP should be read in their entirety and not in isolation. The incorporation of the ISBP into the terms of a credit should be discouraged, as UCP600 incorporates international standard banking practice, which includes the practices described in the ISBP.It is the UCP, not the ISBP, that are the binding rules for for a credit that incorporates them. Documents should be examined in accordance with international standard banking practice as stated in UCP 600. However, any refusal of documents should be completed according to UCP 600 Article 16. ICC Opinion R599/TA562rev says there is no harm in explaining to another party which paragraph of the ISBP supports a particular position the Banking Commission has taken in applying the UCP.Best regards,Mr. Old Man

    Reply

  3. anonymous

    March 30, 2011 at 6:03 am

    Anonymous writes:niceee!!!! 😉

    Reply

  4. murttuza

    April 15, 2011 at 9:04 pm

    Dear Old Man,If an LC calls for a ''Certificate'' (Example: Cert of Analysis) under field 46a, without further stipulating to be dated and signed, then the presented Certificate need not be dated. ISBP para 8, 13 and 37 does not require a certificate to be dated. Please note some Issuing bank's refuses the presentation citing a discrepancy Certificate not dated where there is no such requirement in the LC.Pls comment on this.

    Reply

  5. mroldmanvcb

    April 16, 2011 at 7:04 am

    I'm on business. So, a quick reply by quoting ICC opinions for your reference is OK?QuoteThe credit required presentation of three beneficiary certificates, the discrepancy refers to "Certificate – not dated". For the purpose of this response, it is presumed that the discrepancy relates to all of the certificates. Although in international standard banking practice, it is expected that a required certificate be dated, its compliance without a date will depend on the type of certification that has been requested, its required wording, and the wording that appears within it. None of the requirements in the credit, for any of the certificates, makes dating of the certificate crucial to the establishment of compliance with any of the statements therein. There is no discrepancy in this instance. UnquoteQuoteOfficial Opinion R443 – 2000/01Whilst a certificate should, in the normal course of events, be dated there is no firm answer to this question as the answer will lie in the type of certificate that has been requested, the wording or confirmation that is to appear thereon and the exact wording that appears within the certificate.UnquoteHope it can be helpful.

    Reply

  6. murttuza

    April 20, 2011 at 1:04 am

    Dear Old Man, How can one know whether which type of certification or wording in a certificate must be dated though the LC do not stipulate to indicate a date.

    Reply

  7. mroldmanvcb

    April 20, 2011 at 10:04 pm

    Dear Syed Murtuza,Perhaps an example (which I borrow from Son Chee Seng) can help make clear which type of certification requires the certificate to be dated . If the L/C requires a certificate issued by the shipping company certifying that the ship is not older than 25 years, then the certificate presented must be dated as it has to show the ship is not older than 25 years when the shipment is effected. Yet, if the L/C requires a certificate issued by the shipping company certifying that the ship was built in 1996, then this certificate may not be dated as it has certified the fact that the ship was built in 1996.Best regards,Mr. Old Man

    Reply

  8. anonymous

    June 29, 2011 at 3:06 am

    Nadia writes:Hello Mr. old man,if an LC calls for description of goods as "CD players" and upon presentation of documents the same description above was included in the invoice however Bill of lading incoporated the description of goods as "CD players and disketts". Is this a discrepany noting that the addtional description of goods did not affect the LC amount.Thanks,Nadia

    Reply

  9. anonymous

    June 29, 2011 at 3:06 am

    Nadia writes:Hello Mr. old man,if an LC calls for description of goods as "CD players" and upon presentation of documents the same description above was included in the invoice however Bill of lading incoporated the description of goods as "CD players and disketts". Is this a discrepany noting that the addtional description of goods did not affect the LC amount.Thanks,Nadia

    Reply

  10. anonymous

    June 29, 2011 at 3:06 am

    Nadia writes:Hello Mr. old man,if an LC calls for description of goods as "CD players" and upon presentation of documents the same description above was included in the invoice however Bill of lading incoporated the description of goods as "CD players and disketts". Is this a discrepany noting that the addtional description of goods did not affect the LC amount.Thanks,Nadia

    Reply

  11. mroldmanvcb

    June 29, 2011 at 10:06 pm

    Hi Nadia,ISBP para 108 says “a goods description in the bill of lading may be shown in general terms not in conflict with that stated in the credit”.UCP 600 sub-article 14(d) says: “data in a document, when read in context with the credit, the document itself and international standard banking practice, need not be identical to, but must not conflict with, data in that document, any other stipulated document or the credit”.In view of the above, the described bill of lading is discrepant as the goods description in the bill of lading conflicts with that in the invoice and the L/C.Regards,Mr. Old Man

    Reply

  12. anonymous

    July 2, 2013 at 3:07 pm

    kiki writes:Hi,Anh giải đáp giúp e trường hợp sau với nhe:L/C yêu cầu mặt hàng A,B,CBCT về, trên Invoice và các chứng từ đểu thể hiện đủ A,B,C và còn thêm D là mặt hàng kèm theo, không để trị giá mặt hàng D nàyThợp này có bị xem là BHL không, và nếu có e dùng ISBP điều 64B có hợp ký khôngCảm ơn Anh nhiều

    Reply

  13. mroldmanvcb

    July 4, 2013 at 10:07 am

    It's not complying. Please refer to ISBP paragraph 64 (b), which says: An invoice must not show merchandise not called for in the credit (including samples, advertising materials, etc.) even if stated to be free of charge.

    Reply

  14. Hrusikesh samal

    October 19, 2017 at 8:01 am

    Hi all,
    I would like to ask a question regarding invoice goods description.
    Lc calls for scale but invoice presented with physician scale.whether we ll Mark as discrepancy or not

    Reply

    • mroldman

      October 19, 2017 at 2:17 pm

      An invoice showing a description of the goods, services or performance that corresponds with that in the credit may also indicate additional data in respect of the goods, services or performance provided that they do not appear to refer to a different nature, classification or category of the goods, services or performance.

      In my opinion, no discrepancy.

      Reply

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