Latest ICC Opinions. Rita Ricci, CDCS Global Head, Trade Expertise Desk BNP Paribas

Transcription

1 Latest ICC Opinions Rita Ricci, CDCS Global Head, Trade Expertise Desk BNP Paribas Normand Girard, CDCS Director, Global Trade Operations BMO Financial Group

2 TA.832rev CASE: - Letter of credit issued subject to UCP Packing list showed Total Net Weight as kg and Total Gross Weight as kg - Bill of lading copy showed Nett Weight Kgs in the description of goods field and under the column headed with pre-printed wording stating Gross Wgt. /Nett Wgt. - Bill of lading A ttachment showed Nett Weight Kgs in the description of goods field but showed the same [Net] weight under the column with the heading Gross weight in kilos. - Confirming bank refused the presentation of documents citing the discrepancy: Bill of lading: Gross weight in the specification to B/L not as per packing list. - Details in packing list, bill of lading copy and attachment (this is not the actual document in opinion): Packing list Total Net Weight: kg Copy of bill of lading Description of goods Nett Weight: KGS Attachment to bill of lading Description of goods Nett Weight: KGS Total Gross Weight kg Gross Wgt. / Net Wgt Kos Gross weight in kilos Kos 2

3 TA.832rev QUESTION(S): Was the discrepancy cited by the confirming bank a valid discrepancy? 3

4 TA.841.rev CASE: - Standby letter of credit ( SBLC ) issued subject to UCP SBLC contained the following requirements (among others): 2. Any demand must show beneficiary s written confirmation that 1) the amount claimed is due and payable due to the suppliers failure to fulfil his contractual obligations as well as specifications of the nature of his failure and 2) beneficiary has formally demanded payment of such amount from the supplier 30 days in advance. 5. Upon presentation of credit conform documents please claim reimbursement from us value 2 working days after your authenticated SWIFT message to us confirming all credit terms complied with. - Confirming bank sent following message to issuing bank: Beneficiary of your standby letter of credit claimed liquidation full standby letter of credit amount in case you failed to extend its validity until Unless your renewal instructions received by us during the current validity period we consider this swift as our valid formal claim for liquidation and for crediting its total amount to our account with [bank name]. - Issuing bank rejected confirming bank s message: Issuing bank s rejection reminded the confirming bank about requirement no. 2. in the SBLC. 4

5 TA.841.rev QUESTION(S): - How should the issuing bank treat the confirming bank s extend of pay demand? - Upon expiration of SBLC, and since it is not extended, can issuing bank remove SBLC from its books? - Can issuing bank be obligated to pay on the basis of the extend or pay message, given that the applicant does not accept to extend the SBLC? 5

6 TA.842rev CASE: - Letter of credit issued subject to UCP Field 46A Documents required stated: MANUALLY SIGNED AND DULY DATED BENEFICIARY S COMMERCIAL INVOICE ADDRESSED TO APPLICANT, MARKED L/C NUMBER, EVIDENCING DELIVERY AND PAYMENT TERMS IN 1 ORIGINAL AND 1 COPY Field 47A Additional conditions stated: ALL DOCUMENTS TO BE MANUALLY SIGNED - Issuing bank refused documents citing the following discrepancy: Commercial invoice copy not manually signed as per L/C terms and conditions in 46A and 47A. - Confirming bank disagreed contending that : o A copy of a document has no legal effectiveness and the original invoice was signed. o As per ISBP 681 para. 32 and ISBP 745 para. A31 (b) and C10, presentation of a signed document accompanied by unsigned copies is compliant. o UCP 600 s provisions concern the content of original documents and not copy documents A requirement for documents to be manually signed does not extend to copy documents unless specifically stated. 6

7 TA.842rev QUESTION(S): Was the discrepancy cited by the issuing bank a valid discrepancy? 7

8 TA.843.rev CASE: - Letter of credit issued subject to UCP Concerns documents created via electronic platforms between corporates and trade service providers, i.e. shipping company, forwarding company, insurance company and chamber of commerce. - Corporates input all details to a system connected to the service providers and can print documents such as bills of lading, AWB, insurance document or certificate of origin from their own terminals. - Printout of the document is an original document. Once printed, a document cannot be printed again. - Printed documents used to be printed in colour but recently are being printed in black and white. - Issuing banks are sending refusal notices stating as a discrepancy: Photocopy of document presented instead of original. 8

9 TA.843.rev QUESTIONS(S): 1. Can the issuing bank refuse to accept a black and white document as an original because it is not printed in colour? 2. Can a bank deem a document to be a photocopy because it is printed in black and white? Can a bank reject a colour printed document as original because the bank is able to tell it is a colour photocopy? 9

10 TA.844.rev CASE: - Letter of credit issued subject to UCP Concerns the signature and capacity of a signing party on an airway bill and the validity of the refusal message. - The top of the airway bill duly mentioned CARRIER: ABC airlines. - Airway bill was signed in two boxes, but only one distinguished the signing party XYZ as agent for carrier. - Signing party [XYZ] was the same entity in both boxes Signature of Shipper or his agent and Signature of Issuing Carrier or its Agent - Confirming bank refused the presentation of documents citing the discrepancy: AWB: Omits capacity of signing party. The confirming bank later sent another message stating the discrepancy more precisely as: AWB: Omits capacity of signing party in field signature of issuing carrier or its agent. 10

11 TA.844.rev QUESTIONS(S): 1. Can the confirming bank refuse payment on the basis of the discrepancy raised? 2. Was refusal notice in conformity with UCP 600 Art. 16 (single notice) since the first refusal message did not mention in which box the capacity of the signing party was missing? 11

12 TA.846rev CASE: - Letter of credit issued subject to UCP Concerns nine remarks made by Master of vessel on a bill of lading under description of cargo. - The ninth Master s remark stated: the marks of some containers are not clear / missing. - UCP 600 article 27 states that a clean bill of lading is one that does not contain a clause or notation expressly declaring a defective condition of the goods or their packaging. - Nominated bank found presented documents to be complying presentation. 12

13 TA.846rev QUESTIONS(S): Is it a discrepancy in that the bill of lading is not clean? 13

14 TA.847rev CASE: - Concerns bank payment obligation subject to URBPO Involves a 3-corner transaction i.e. one bank is acting as both obligor bank and recipient bank - The obligor and recipient banks are different branches of the same bank in the same country. - The query expresses a view that an obligor bank that provides an irrevocable undertaking to the recipient bank cannot be the same bank as the recipient bank. This creates a conflict due to Recipient Bank being defined as Beneficiary of the BPO in URBPO 750. Query seeks to find a way to overcome this conflict by adding a condition to the BPO transaction that the Seller is the beneficiary, and the Recipient Bank is an agent acting on behalf of the seller. 14

15 TA.847rev QUESTIONS(S): Can a bank act as both the Obligor Bank and Recipient Bank in the same BPO transaction? If not, can a special condition be added to the BPO transaction that the Seller is the beneficiary and the Recipient Bank is an agent acting on behalf of the Seller? 15

16 TA.848rev CASE: - Letter of credit issued subject to UCP Invoice included the description of goods as follows: FROZEN IQF BLANCHED PEELED DEVEINED TAIL-OFF (BPD) VANNAMEI SHRIMPS. - Health certificate indicated same name of goods but also included the scientific name of the goods: PENAEUS VANNAMEI Issuing bank refused the documents citing as a discrepancy: HEALTH CERTIFICATE STATES IN BOX 1.28: PENAEUS VANNAMEI instead of VANNAMEI SHRIMP IN INVOICE 16

17 TA.848rev QUESTIONS(S): What is ICC s opinion on the issuing bank s rejection notice? If discrepancy not valid, does Beneficiary s bank still have the right to claim payment from issuing bank even though issuing bank returned the compliant documents back to beneficiary s bank? 17

18 TA.849rev CASE: - Letter of credit issued subject to UCP Presented invoice stated: These commodities, technology, or software were exported from the United States in accordance with the Administration Regulations. Diversion contrary prohibited. - Confirming bank refused documents citing the discrepancy: Invoice contains a sanctions clause. 18

19 TA.849rev QUESTIONS(S): Was confirming bank correct in its refusal? 19

20 TA.850rev CASE: - Counter-guarantee subject to URDG 758 and Standby LCs subject to UCP600 and ISP98 It was experienced that the time lapse between the demand made on the local guarantee and the demand made on the counter guarantee or standby letter of credit was long. 20

21 TA.850rev QUESTIONS(S): - What are the views of the ICC as to: o the appropriate time for a guarantor to make a demand under a counter guarantee from the time a complying demand is made on the local guarantee o the appropriate time for a confirmer/confirming bank to make a demand under a standby letter of credit from the time a complying demand is made to the confirmer/confirming bank 21

22 TA.851rev CASE: - Letter of credit issued subject to UCP Letter of credit issued by SWIFT included the following terms (among others): 42C: Drafts at sight 46A: Applicant s acceptance certificate in one original issued and signed by applicant. - Issuing bank refused documents citing the discrepancies: 1. Copy of applicant s acceptance certificate differs from the L/C. 2. Tenor of L/C is at sight draft should indicate at xxx sight instead of at sight. - Issuing bank provided further elaborations regarding its refusal which the presenting found not valid. 22

23 TA.851rev QUESTIONS(S): Are the discrepancies cited by the issuing ban valid? 23