Field 46A vs. 47A in LCs: Are All Documents Treated Equally?

QUESTION

Dear Mr. Old Man,

I’ve heard of your name for years and now would like to trouble you with a question, hoping you might spare a moment for some expert advice.

Are documents required under fields 46A and 47A of an LC treated equally?

For example:

1. The issuing bank and applicant agree to state the requirement for a Phytosanitary Certificate in field 47A, since the document might be issued in a language other than English. They believe that, if required under 47A, banks will not be responsible for checking the compliance of such a document. Are they correct? That is, are documents mentioned in 47A not subject to compliance checks or consistency with documents listed under 46A and with the LC terms?
2. Suppose the Phytosanitary Certificate is eventually presented in English (contrary to the bank/applicant’s concern). The bank then finds an inconsistency with other documents. Can the bank raise a discrepancy?

Thank you very much in advance.

Best regards,

TD

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ANSWER

Dear TD,

Thank you for your thoughtful question.

According to SWIFT usage rules, field 46A is intended for listing required documents, while field 47A (Additional Conditions) is used to state any additional terms or conditions that must be fulfilled under the credit. However, this does not mean that banks can ignore documentary requirements stated in field 47A.

This point is well addressed in ICC Opinion R412 (issued under UCP 500 but still relevant under UCP 600), which clarifies:

“The fact that a requirement (documentary or otherwise) appears within field 47A of a SWIFT MT700 does not mean that a bank can ignore the condition on the grounds that it is an ‘additional instruction’ field. Whilst banks should list the required documents within field 46A, it is not unknown that documentary requirements have been included within field 47A.”

Therefore:

• a. The assumption that documents mentioned in field 47A are exempt from examination is incorrect. If a document is clearly required under field 47A, banks must still examine it for compliance, just as they would for documents in field 46A.
• b. If the Phytosanitary Certificate is presented in English, and the issuing or nominated bank finds an inconsistency between it and other documents or LC terms, a discrepancy may indeed be raised.

I hope this clears up your concerns.

Best regards,

Mr. Old Man