DOCUMENT ISSUED BY COMPETENT AUTHORITY

QUERY FROM TT

Hi Mr. Old Man,

Article 3 UCP600: "Terms such as "first class", "well known", "qualified", "independent", "official", "competent" or "local" used to describe the issuer of a document allow any issuer except the beneficiary to issue that document"

If LC requires a document issued by a competent authority, is it a discrepancy if it is issued by some company like SGS or Vinacontrol? As per Article 3 UCP 600, it is ok because the word competent is used to describe document issuer and beneficiary is not the one who issues the document. However, "authority" means an official organization or government dept that has the power to make a decision. Therefore issuer should be a governmental agency, ministry, chamber of commerce, industry….

The same situation is when LC requires a document issued by an independent laboratory. Is this a discrepancy if the document presented issued by a company, again SGS, not by a laboratory?

Could you please give me some advice on this?

Thank you!
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COMMENT

Hi,

1) Document issued by a competent authority

Like you I ever thought that a competent authority is an agency or body created by the government to perform its designed function, e.g., the Vietnam Chamber of Commerce and Industry is authorized to issue C/O Form A (GSP Form A) for goods exported to the countries accepting GSP Form A
However, I now think differently about this and see that the phrase “competent authority” is ambiguous and that the applicant bears the risk of any ambiguity in its instructions to issue the L/C (ISBP paragraph 2).

If the applicant expects to receive a document issued by a government authority he should expressly indicate the name of the government agency or body which is to issue the document.

Where a document is required to be issued by a competent authority, it can be issued by any party except the beneficiary. The document issued by SGS is acceptable under Article 3 of UCP 600.

2) Document issued by an independent laboratory

“Independent laboratory” also falls into Article 3 of UCP 600. There is no discrepancy if the document is issued by SGS.

By the way, SGS is the world’s leading inspection, verification, testing and certification company which offers laboratory services to carry out local and international companies in all industry areas.

Hope it is of your help.

Best regards,
Mr. Old Man