Department of Policy and Business Practices - FEDAI

1 Department of Policy and Business Practices 38 Cours Albert 1er, 75008 Paris, France Tel +33 (0)1 49 53 28 28 Fax +33 (0)1 49 53 28 59 3 November 2008/TS/wj E-mail Website Document 470/1110rev final Mr. Wilko Gunster Secretary General ICC Netherlands Postbus 95309, 2509 CH Den Haag Bezuidenhoutseweg 12, 2594 AV Den Haag The Netherlands 3 November 2008 Subject: Document 470 (UCP 600) Dear Mr. Gunster, Thank you for your query regarding UCP 600. Please find below the opinion of the Banking Commission. QUOTE We advised and confirmed a L/C which was issued by Bank X in Country I. After having received and checked the documents we found the following discrepancies. First discrepancy The CMR provides conflicting information regarding the carrier , two carriers are named for the same routing and goods.

2 Explanation: In Box 16 (the name of the Carrier) of the presented CMR document the name quote [Company S] unquote was inserted. In Box 23 (signature and name of the Carrier) the name quote [Company C] unquote was inserted. There was a signature placed in this box. Box 17 (the name of the successive carrier) was not completed. Second discrepancy The date of receipt of the goods and the date of issuance have been corrected and should be authenticated by the party making the change. Department of Policy and Business Practices 2 Document 470/1110rev final Explanation Box 4 (the place and date of receipt of the goods) was filled in with the typed wording quote unquote and box 21 (the place and the date of issuance) was filled in with the typed wording quote unquote. In both boxes was manually written, in blue ink and on the dots, quote 28 unquote. We informed beneficiary about the two discrepancies observed by us and we agreed to send the documents to Bank X for payment.

3 Later, we received an advice of refusal from Bank X mentioning several discrepancies from which we quote two: 1. CMR Field 16 contradictory and not complete. 2. CMR Corrections and additions not signed. Although Bank X drafted the wording of the two discrepancies in a different way, we understood that it endorsed the two discrepancies observed by ourselves, which we had communicated to the beneficiary. Later the documents were returned to us by Bank X and we returned the documents to the beneficiary. Beneficiary, however, now opines that the two discrepancies observed by the issuing bank and by ourselves are absolutely not material and it demands immediate payment from us, as the confirming bank. Please let us know whether you endorse the two discrepancies. UNQUOTE We discussed the two items within our Organization and we concluded as follows QUOTE First discrepancy Analysis Sub-article 14 (d) of UCP 600 reads: Department of Policy and Business Practices 3 Document 470/1110rev final Data in documents, when read in context with the credit, the document itself and international standard banking practice need not be identical, but must not conflict with data in that document, any other stipulated document or the credit.

4 ICC opinion R 466 states that a CMR mentioning both quote the carrier unquote and quote the successive carrier unquote is not considered discrepant. As per Sub-article 24 (a) (i) of UCP 600 Box 23 is correctly completed by stating the name and the signature of the carrier, being apparently Company C. Conclusion A. The CMR provides conflicting information regarding the carrier , two carriers are named for the same routing and goods. B. Box 17 (the name of the successive carrier) is not filled in on the CMR document and consequently ICC Opinion R 466 is not applicable. We endorse the opinion of the Dutch bank. One member has voted against this endorsement by arguing as follows: In daily practice the shipper issues the CMR on its own stationary. At time of issuance of the document the shipper apparently thought that Company S would act as the carrier and consequently this name was filled in (in Box 16.). Later, the driver of the truck stamped the document with his company stamp (Company C) and signed the document as carrier in Box 23.

5 Whereas this procedure is normal daily practice, banks should facilitate and not refuse a CMR for that reason provided the document is signed in accordance with sub-article 24 (a) (i) of UCP 600. Second discrepancy Analysis ICC Opinion R533 reads: Quote The Commission was invited to comment. In the discussion the following comment was made "that corrections or additions on a transport document must be authenticated by a correction stamp as well as a signature or initials. The Commission agreed it should be clear who has corrected the document and on what authority. Department of Policy and Business Practices 4 Document 470/1110rev final Such documents are only acceptable if this procedure is, in fact, followed." [emphasis added] The adding of a freight paid stamp or an annotation of an on board date are not considered to be additions .Unquote ISBP paragraph 9 reads: Quote Corrections and alterations of information or data in documents other than documents created by the beneficiary must appear to be authenticated by the party who issued the document or by a party authorised by the issuer to do so.

6 Unquote Conclusion Within our National Committee we have differing views. Several of our members opine as follows: In line with ICC opinion R533, the manual adding of an issuing date or the date of receipt of the goods in a transport document is not considered to be an addition or correction and consequently there is no need for such dates to be authenticated by the issuer of the document. Especially, in case of a CMR, it is daily practice that the driver manually fills in CMR with the date of receipt of the goods. Furthermore, ISBP paragraph 11 reads Quote The use of multiple type styles or font sizes or handwriting in the same document does not , by itself, signify a correction or alteration. Unquote Other members opine as follows: The date of issue and the date of receipt/on board of the goods are crucial information on any transport document and banks must be able to ascertain that the issuer of the document completed this information.

7 Therefore, the carrier or its agent must authenticate manual alterations or additions in this respect. Since ICC Opinion R533/TA103 was published prior to ISBP, the Banking Commission is invited to reconsider ICC Opinion R533 in such a way that a manually inserted issuing date or date of receipt of the goods or on board date on any transport document is to be considered a correction or alteration as prescribed in ISBP paragraph 9. UNQUOTE Please let us know whether you endorse our opinion with regard to the first discrepancy and which of the two opinions with regard to the second discrepancy you endorse. Department of Policy and Business Practices 5 Document 470/1110rev final ANALYSIS Discrepancy 1. The CMR evidences two carrier names and therefore there is no clear indication of the party that is acting as carrier. Sub-article 24 (a) (i) requires the road transport document to indicate the name of the carrier.

8 ICC Opinion is not applicable in this case. Discrepancy 2. Whilst the month and year were typed on the CMR document, the actual day of the month that the goods were received for shipment was added by pen. The same circumstances apply to the date of issuance of the CMR. Sub-article 24 (a) (ii) requires that the CMR indicate the date of shipment or the date the goods have been received for shipment, dispatch or carriage at the place stated in the credit. This sub-article goes on to state Unless the transport document contains a dated reception stamp, an indication of the date of receipt or a date of shipment, the date of issuance of the transport document will be deemed to be the date of shipment. By the completion of box 4 (place and date of receipt of the goods), the date appearing in box 21 (place and date of issuance) will not be considered in the determination of the date of receipt or shipment. Therefore, the manual date inserted in box 21 is not relevant to the determination of compliance of the CMR and should not be considered discrepant for the reason of the addition not being authenticated.

9 With regard to the insertion, by pen, of 28 in box 4 and 21 it should be noted that the document was produced with a space for the actual date (day) to be inserted. As referred to in ISBP paragraph 11, a document containing different forms of styles, font sizes or handwriting in the same document, does not, by itself, signify a correction or alteration to the document. CONCLUSION Discrepancy 1. The CMR is discrepant. Discrepancy 2. The insertion of the actual date in box 4, by pen, does not require authentication by the carrier or their agent. There is no discrepancy. Department of Policy and Business Practices 6 Document 470/1110rev final The opinion(s) rendered on this query reflect the opinion of the ICC Banking Commission based on the facts under QUOTE above. The reply given is not to be construed as being other than solely for the benefit of guidance and there should be no legal imputation associated with the reply offered.

10 If this query relates to a matter currently under consideration by the courts, the ICC Banking Commission will refrain from considering it for adoption as an opinion. Neither the ICC nor any of its employees, nor any member of the Banking Commission, including the Chairman, Vice-Chairmen or Technical Adviser shall be liable to any person for any loss or damage arising out of any act or omission in connection with the rendered opinion(s). Yours sincerely, Thierry Senechal Policy Manager Banking Commission Department of Policy and Business Practices 38 Cours Albert 1er, 75008 Paris, France Tel +33 (0)1 49 53 28 28 Fax +33 (0)1 49 53 28 59 3 November 2008/TS/wj E-mail Website Document 470/1110rev final Mr. Kim Hyun Min ICC Korea Chamber of Commerce Building 45 Namdaemunnu-4ga, Joong-gu Seoul 100-743 Republic of Korea 3 November 2008 Subject: Document 470 final (UCP 600) Dear Mr.