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DOCUMENTS ISSUED BY COMPETENT AUTHORITY

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Dear All,

Please find below another Q&A on the case where documents are required to be issued by competent authority. This is from DCPro Forum.

What’d you think?

Best regards,
Mr. Old Man
————–
QUESTION

ARTICLE 3 UCP 600

JOEE – Malta
Posted 03 Jan 13 |

May I kindly solicit your expert opinion on a technical issue.

A letter of credit calls for two documents to be "issued and signed by the competent authorities in the C.O.O". The relative documents were presented duly issued by the supplier but bearing a clause affirming that "shipper/consignor/supplier as supplier X for and on behalf of Beneficiry Y". (it is a b/b trans).

Would such a clause on these docs, albeit issued by the supplier, infringe article 3 of the UCP600?

I thank you
Joee Malta
—————

ANSWER

N.H.Duc – Viet Nam Posted 03 Jan 13 |

Hi,

Agreed with Jeremy.

It is understood from Article 3 UCP 600 that if the L/C requires a document to be issued by a competent authority, any party except the beneficiary can issue that document.
The document issued by the supplier on behalf of the beneficiary is considered to be issued by the beneficiary, hence, it contradicts Article 3 UCP 600.

Regards,
N.H.Duc

P/s: Article 3 UCP 600 is attached for convenient reference:

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.

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4 Comments

  1. anonymous

    January 4, 2013 at 11:01 pm

    Anonymous writes:Art 3, UCP 600 or ISBP did not clearly indicate whether any parties other than Bene sign for and on behalf of Bene would consider as issued by Bene or not. Hence, IMHO, docs issued by the supplier on their letterhead and duly signed by them even if on their face appear the clause "shipper/consignor/supplier as supplier X for and on behalf of Beneficiry Y" would not consider as issued by Bene. If you want to raise a discrepancy, pls refer to any Arts in UCP, ISBP or ICC opinion… so that you could convince other banks.

    Reply

  2. mroldmanvcb

    January 5, 2013 at 8:01 am

    Good point. I agree with you that Art 3 does not reflect exactly what the case describes, especially where the document is issued on the supplier's stationary. The statement "shipper/consignor/supplier as supplier X for and on behalf of Beneficiry Y" leads the document checker to believe that the document is signed by the supplier on behalf of the beneficiary, hence, it is considered to be issued by the beneficiary. Where the L/C requires a document to be issued by competent authority, according to Article 3 it would be not aceptable if the supplier signs the document for and on behalf of the beneficiary as in the following example: For and on behalf of the beneficiary Y (signature) X Company as SupplierAnyway, thanks for your comment.

    Reply

  3. thaoly169

    January 14, 2013 at 5:01 pm

    Dạ em chào anh,Trước tiên, em rất xin lỗi vì comment lạc đề. Em muốn đặt câu hỏi trên wall blog của anh nhưng không biết làm thế nào, em chỉ thấy mỗi ô comment là gõ chữ được, em không biết cách dùng Opera này, mong anh thông cảm nhé! :(Em muốn hỏi anh là trong trường hợp bộ chứng từ xuất trình không hợp lệ (phương thức tín dụng chứng từ) thì ai sẽ là người quyết định cuối cùng về việc thanh toán?Vì theo như em biết, NHPH sẽ chịu trách nhiệm thanh toán nếu bộ chứng từ xuất trình là phù hợp, nhưng nếu BCT không phù hợp NHPH có thể từ chối thanh toán nhưng cũng có thể hỏi ý kiến của người yêu cầu mở LC phải không ạ? Và nếu người này đồng ý thì NHPH sẽ thanh toán phải không ạ? (Giả sử người này chỉ mới ký quỹ 10%?)

    Reply

  4. mroldmanvcb

    January 15, 2013 at 8:01 am

    Nếu chứng từ xuất trình không phù hợp, NHPH có quyền từ chối thanh toán NGAY CẢ KHI NGƯỜI YÊU CẦU MỞ LC CHÂP NHẬN SAI SÓT. Thực tế cho thấy hầu hết các trường hợp khi người mở L/C chấp nhận sai sót VÀ HOÀN THÀNH NGHĨA VỤ THEO HỢP ĐỒNG PHÁT HÀNH LC VỚI NHPH, tức là,ký quỹ đủ 100% (nếu bằng vốn tự có) hoặc nhận nợ vay (nếu bằng vốn vay), thì NHPH có thể chấp nhận thanh toán L/C.

    Reply

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