QUESTION
Hi Mr. Old Man,
We have an enquiry as follows:
LC available for negotiation calls for Beneficiary’s Certificate certifying that a set of copied document has been sent to applicant…
When we presented the documents including drafts to the negotiating bank for negotiation. The negotiating bank raised the discrepancy “Draft dated later than Beneficiary’s Certificate”.
We did not agree as drafts are not required under Field 46A.
Is the discrepancy raised by the negotiating bank correct?
Need you advice, please.
Terence Tan
——-
ANSWER
Hi,
LC available by negotiation would require presentation of drafts in Field 42C of Swift MT 700. The beneficiary would present the documents including drafts (bills of exchange) to the negotiating bank/the issuing bank for negotiation/payment.
Where the LC requires presentation of Beneficiary’s Certificate certifying that one set of copied documents has been sent to the applicant within a stipulated period of time, such a set of shipping documents would not include drafts (bills of exchange). Therefore, provided that it is not dated later than its date of presentation, a draft dated later than the date of Beneficiary’s Certificate does not constitute a valid discrepancy.
The copied documents required to be sent to the applicant are the shipping documents required under Field 46A and would not include drafts (see ISBP para. A19a). The discrepancy raised by the negotiating bank is not correct.
Kind regards,
Mr. Old Man
Abdul Raheem
May 19, 2016 at 7:40 pm
Dear Mr. Old Man,
My I please request you to kindly provide me the website address where I can find the ICC opinions.
Also please confirm if the this to be subscribed (fee payment) or available free access. Thanks a lot.
Rgds
AR.
mroldman
May 19, 2016 at 8:21 pm
It’s DC-PRO http://www.dcprofessional.com. DC-PRO is the ICC’s essential online LC resource for documentary credit professionals.
It provides instant online access to all the information necessary for a documentary credit professional to make high value decisions day-to-day and, for the first time, this information is delivered in a structured and fully searchable manner.
It’s a pay website (EUR2,500.00). Too expensive for individual, but it’s ok for banks. You have two weeks free trial.
Sanchai
June 2, 2016 at 2:47 pm
Dear Mr. Oldman,
Could you please share your idea as to the below context?
According to the context which are mentioned in :
ISBP 745, E 1 a, that is :
A requirement in a credit for the presentation of a transport document, however named, only covering a PORT-TO-PORT shipment, i.e., a credit that contain no reference to a place of receipt or taking in charge or place of final destination means that “UCP 600 ARTICLE 20 IS TO BE APPLIED” in the examination of that document.
and
UCP 600, Article 20, that is :
A bill of lading, however named, must appear to……
Indicate that the goods have been shipped on board “A NAMED VESSEL”…………
HOWEVER, UCP 600 Article 20 ALSO MENTIONED THAT :
A bill of lading indicating that transshipment will or may take place is acceptable, even if the credit prohibits transshipment, if the goods have been shipped in a container, “TRAILER” or lash barge as evidenced by the bill of lading.
If my understanding is correct, Article 20 will be applicable when transportation of goods is from port-to-port by Vessel .
My question is :
Why is “TRAILER” included in Article 20 ? (and Article 21)
Sanchai.
Letter of Credit
June 3, 2016 at 9:44 pm
Dear Mr.Oldman,
Thank you for your comment.
Please allow me to discuss with you further on this point.
Referring to your comment which you said that…..
“This would take place where the container ship or big ship cannot call at the port of loading and the goods must be loaded on to a feeder vessel, a LASH barge and even on a TRAILER “for tranportation to the port of lading” to load on the mother vessel/container vessel. That is the reason why “TRAILER” is included in Article 20.”
It seems like that activities were taken place before the goods are shipped on board the vessel at the port of loading.
My opinion are that :
1) Transhipment is the activity after the goods have been shipped on board the vessel at the port of loading, according to the purpose of Article 20.
2) Even if this activity take place after the goods have been shipped on board or before the goods have been shipped on board as in your example, it would constitute what I called “more than one mode of transport” and it will be in conflict with the purpose of Article 20.
Sorry if my understanding is not correct.
What do you think ?
Sanchai.
mroldman
June 4, 2016 at 10:13 am
Hi,
As said in my previous post, transhipment is the unloading and reloading of goods from one vessel to another during the carriage of those goods from the port of lading to the port of discharge stated in the LC . So I agree that transhipment is an activity that takes place after the goods loaded on board the vessel.
Perhaps, my comment “This would… included in Article 20” is not clear and makes you misunderstanding. Sorry for my unclear comment. I would like to re-explain the reason why the term “TRAILER” is included in Article 20 as follows:
Trailer is a kind of container on wheels to be towed by a motor vehicle. Goods shipped in container(s), TRAILER(S), LASH barge(s) and the like will be carried from the place of taking in charge or the port of loading to the port of discharge or the final destination in the SAME CONTAINER(S), TRAILER(S) or LASH barge(s) and the like… That is to say, the container(s), the trailer(s) or the LASH barge(s) containing goods (and not the goods only) is loaded on board the vessel at the port of loading and unloaded at the port of discharge.
Where the goods are shipped in containers, trailers or LASH barges or the like… the bill of lading indicating that transhipment will or may take place is acceptable even if the LC prohibits transhipment
Hope it is clearer.
Kind regards,
Mr. Old Man
P/s: Let me edit my previous comment
mroldman
June 4, 2016 at 10:17 am
Hi,
As said in my previous post, transhipment is the unloading and reloading of goods from one vessel to another during the carriage of those goods from the port of lading to the port of discharge stated in the LC . So I agree that transhipment is an activity that takes place after the goods loaded on board the vessel.
Perhaps, my comment “This would… included in Article 20” is not clear and makes you misunderstanding. Sorry for my unclear comment. I would like to re-explain the reason why the term “TRAILER” is included in Article 20 as follows:
Trailer is a kind of container on wheels to be towed by a motor vehicle. Goods shipped in container(s), TRAILER(S), LASH barge(s) and the like will be carried from the place of taking in charge or the port of loading to the port of discharge or the final destination in the SAME CONTAINER(S), TRAILER(S) or LASH barge(s) and the like… That is to say, the container(s), the trailer(s) or the LASH barge(s) containing goods (and not the goods only) is loaded on board the vessel at the port of loading and unloaded at the port of discharge.
Regarding this issue, Article 29 UCP 400 provides a clearer provision. It states as follows: “… Even if transhipment is prohibited by the terms of credit, banks will accept transport documents which state or indicate that the goods are in container(s), trailer(s), “LASH” barge(s) or the like will be carried from a place of taking in charge to a place of final destination in the SAME container(s), trailer(s), “LASH” barge(s) or the like under one and the same transport document.
Where the goods are shipped in containers, trailers or LASH barges or the like… the bill of lading indicating that transhipment will or may take place is acceptable even if the LC prohibits transhipment
Hope it is clearer.
Kind regards,
Mr. Old Man
P/s: In order for other readers not to misunderstand, let me delete my previous comment.