Questions on ICC Official opinion TA677

[berry]

dear all,

im confused with the official opinion ta677. in the opinion, the credit requires -

1. "Documents must be correct on first presentation. Correction of documents is not permitted."
2. "Negotiating bank must certify that documents were correct on first presentation."

in my opinion, one can not force the negotiating bank to give a certificate. what if the negotiating bank find the document complying and issuing bank found it discrepant?

[picant]

Hi Pal,

Have you the ICC Opinion full text or an abstract?

It seems to me that the conclusion by ICC are completely different.

Comments appreciated

Ciao

[berry]

dear sir,

thanks for your answer. the opinion i have reads;

A condition in a credit indicating that documents may not bear any corrections is one that the beneficiary would have to abide by, unless the credit was subsequently amended to remove the condition, and a nominated bank would be required to refuse documents that contained any corrections.
The other clauses specified in the query represent bad practice, and issuing banks should refrain from including such terms and conditions in their credit.

the opinion does not say that these clauses have no impact

[Judith]

Opinion TA677rev relates to clauses which make up a “bad credit”.

(Unfortunately, there are too many of such “bad LCs” floating around. )

If a beneficiary receives such a credit, they have every right to refuse such credits. However, if they choose to accept the LC, they also choose to accept the terms and conditions under it.

With regards to your comment:

…one can not force the negotiating bank to give a certificate.

I completely agree. No one can force a bank to do anything that they have not previously agreed to. However, if the nominated bank wants to act on the nomination, the clauses of the credit must be followed.