Five Practical Questions on ISBP 821 – A Few Points Worth Clarifying

INTRO
Every time a new version of ISBP is published, people read it carefully… and then real-life cases start raising new questions. That is how learning in trade finance usually works—not only from rules, but from practice.

A reader recently sent me several thoughtful questions on ISBP 821. Since they touch on points many practitioners quietly wonder about, I thought I would share the exchange here.

QUESTION

Dear Mr. Old Man,

I would like to thank you for your enthusiasm and willingness to answer us with so many questions.

I find your answers extremely useful and valuable.

Today, I have some questions related to ISBP 821. I hope you have time to review and share your opinion.

1. A21(c) states that a confirming bank or a nominated bank acting on its nomination may restrict the number of acceptable languages as a condition of its engagement in the credit.
   How can the confirming bank or nominated bank restrict languages? Can they restrict directly to the presenter?
2. C15 states that when no quantity of goods is stated in the credit, and partial shipments are prohibited, an invoice issued for an amount up to 5% less than the credit amount will be considered to cover the full quantity and not a partial shipment.
   When quantity of goods is stated in the L/C, does article C15 not apply?
3. F14 mentions that when the address and contact details of the applicant appear as part of the consignee or notify party, they should not conflict with the L/C.
   How about the address and contact details of the issuing bank appearing as consignee or notify party—may they conflict with the L/C?
4. G25(c): Why does this paragraph not mention detention cost as an additional cost to freight?
5. K4: When an agent or proxy signs an insurance document, does the agent’s name need to be stated?

Best regards,

KT

_______

ANSWER

Hi KT,

Thank you for your kind words—and for the thoughtful questions. I may not always be able to reply quickly when several points are raised at once, but let me try to address them one by one.

1. Restricting acceptable languages (A21(c))

A confirming bank or a nominated bank may restrict acceptable languages as a condition of its engagement.

In practice, this restriction is normally communicated to the beneficiary when the credit or confirmation is advised. The reason is simple: the beneficiary is the party who prepares the documents, so that is where the instruction is most effective.

It is not normally notified in advance to a presenting bank, because at the time of advice the presenting bank is often unknown.

That said, the restriction still applies when documents are presented to that bank, regardless of which bank forwards the presentation.

2. Application of C15 when quantity is stated

Paragraph C15 applies only where no quantity of goods is stated in the credit.

If the credit does state quantity, then examination follows the normal UCP 600 rules. In appropriate cases, sub-article 30(b) may allow a tolerance of up to 5% more or less in quantity, provided the conditions of that article are met.

So, in short, C15 is meant for a specific situation and does not apply where quantity is expressly stated.

3. Address of the issuing bank as consignee or notify party

Here, the guiding principle comes from sub-article 14(d) UCP 600: data in documents must not conflict with the credit.

If the issuing bank is shown as consignee or notify party:

• the name must be consistent with the credit, and
• if address or contact details are shown, they should not conflict with those stated in the credit.

At the same time, a transport document does not necessarily have to repeat address or contact details unless required.

4. Why detention costs are not mentioned in G25(c)

G25(c) deals with charges that typically appear on the transport document and are relevant to document examination—particularly freight and related costs.

Detention charges are different in nature. They usually arise later, often after discharge or during container use, and are normally invoiced separately rather than appearing on the bill of lading at issuance.

For that reason, detention is generally outside the scope of what ISBP is addressing in that paragraph.

5. Insurance document signed by an agent or proxy

ISBP 821 is clear on this point. Under K2(b), when an insurance document appears to be signed by an agent or proxy for or on behalf of an insurer or underwriter:

The name of the agent or proxy need not be stated.

What matters is that it is clear the signature is made for or on behalf of the insurer.

Closing remark

Many of these points show how ISBP works in conjunction with UCP 600. ISBP does not replace UCP; rather, it explains how examiners interpret and apply it in daily practice. Reading the two together usually provides the clearest answer.

Best wishes,

Mr. Old Man