NON DOCUMENTARY CONDITION

QUESTION

Dear Mr. Old Man,

We have one situation below, and we are looking forward to hearing your comment.

L/C required in Field 46A

CERTIFICATE OF ORIGIN (A-K FORMS) SHOULD BE SENT DIRECTLY TO THE
NOTIFY PARTY BY EXPRESS COURIER MAIL.

The documents presented to the issuing bank did not include CERTIFICATE OF ORIGIN FORM A-K. The issuing bank raised the discrepancy “CERTIFICATE OF ORIGIN FORM A-K NOT PRESENTED”.

Is the discrepancy valid?

Thanks and best regards.

N
—

ANSWER

Dear N.

Although stated in F 46A, the clause “CERTIFICATE OF ORIGIN(A-K FORMS) SHOULD BE SENT DIRECTLY TO THE NOTIFY PARTY BY EXPRESS COURIER MAIL” should be treated as a non-documentary condition rather than as one of the documents required to be presented under F.46A. Banks will deem this condition as not stated and disregard it as per UCP 600 sub-article 14 (h).

The discrepancy raised by the issuing bank is not valid.

The L/C was badly issued. If the issuing bank was instructed by the applicant to issue the L/C with such a clause, then it is the applicant that bears the risks of the ambiguity in its instructions to issue the L/C (Please refer to ISBP para. 2).

Best regards,
Mr. Old Man