Do Copies of Transport Documents Fall Within The UCP?
By Shahriar Masum
[Republished from DC Insight with the kind consent of the author.]
What is a Transport document? Perhaps the best answer can be found in its functions; i.e contract of carriage, Document of Title, Evidence of shipment etc. Transport document plays a very important role in LC world. Little pieces of data on a transport document communicate important information to the document checker… how, when and from where the cargo is shipped etc. This is all true as long as the document under examination is an original one. If it’s a copy, it looses much of its importance as if it’s a pirated copy of the film. ISBP’s warning -
Copies of transport documents are not transport document…
ICC has a good logic for this. A copy is less likely to have a signature, on board notation etc. which are the mandatory requirement of UCP transport articles. Therefore there is no reason to review them under the transport articles. So ISBP kept on saying –
The UCP 600 transport articles apply where there are original transport documents presented. Where a credit allows for the presentation of a copy transport document rather than an original, the credit must explicitly state the details to be shown. Where copies (non-negotiable) are presented, they need not evidence signature, dates, etc.
But that’s one side of the story. ISBP is saying, where the LC calls for a copy of a transport document, the LC must include the contents (Emphasis Added) of that “copy of transport document”. If the copy means a photocopy, then defining contents of a photocopy will mean defining the content of the original transport document; an original whose content is already well defined in articles 19 to 25. Thus unless the LC does not explicitly state the details to be shown, a document checker would be unable to decode the data on the photocopy into important information with the help of UCP transport article. Consequently he can not raise discrepancy even if the content is not in compliance with the UCP 600 transport articles that would apply had the LC called for an original.
However, ISBP also include the word “non negotiable”, within parenthesis, just after the word copy. Does it mean that here copy means a so called non negotiable copy? If yes, then a better understanding of the quoted ICC paragraph is possible. Because it’s quite common that some of the information of the original won’t be available on the non negotiable copy; i.e Signature, On board Notation etc.
But this does not mean that the non negotiable copy will be a blank form. Still it will cover some of the things of the original one. For example a non negotiable copy of a bill of lading will include the port of loading, discharge, vessel name, consignee, shipper etc and this information needs to be examined. But under which article? ISBP says that it will be reviewed under article 14F which says –
If credit requires presentation of a document other than a transport document, insurance document or commercial invoice, without stipulating by whom the document is to be issued or its data content, banks will accept the documents presented if its content appears to “fulfill the function” of the required document and otherwise complies with sub article 14 (d).
The sub article speaks on fulfilling function. What is the definition of fulfill the function?
Commentary on UCP 600 says
This requirement means that it must be determinable that the document fulfils the intent required. This does not mean, however, that a document checker must have knowledge (Emphasis added) of all of the specific requirements for the document, but rather that he must be able to recognize (Emphasis added) that its intended purpose is that required in the documentary credit.
If an applicant requests a document as simple as a “packing list” without further description, it must have some expectations (Emphasis added) as to the content of that document.
The consignee stated in the certificate of origin is there for customs purposes, whereas the consignee in the bill of lading refers to the function of the document as a document of title.
Wordings of Commentary on UCP 600 gives me a feeling that fulfilling the function significantly depends on the knowledge and expectations of the document checker; Not to mention that such expectation and knowledge is to be supported by ISBP and UCP600.
Now say a LC calls for a copy of Bill of Lading where the original is to be sent to the applicant directly. The document checker gets a non negotiable copy of bill of lading which has the following information –
1. It is signed by the beneficiary on the capacity of the beneficiary
2. On board notation shows a date after the date of latest shipment
3. Consignee address does not match with the LC.
4. Port of loading is shown as intended.
5. There is no vessel name.
6. Goods are shipped on deck
7. It’s a charter party bill of lading
Is there any discrepancy? My understanding says, there is no discrepancy because these information will be discrepant only when read under the UCP article 20. Otherwise they are just ok. So copy transport document theoretically may become a whole other document from its original and the poor document checker has nothing to do but to accept.
How to avoid this situation? ISBP has the solution for this. It recommends the LC issuing bank to mention the content of the copy of the transport document. But to avoid the 7 points mentioned above, one will need to put almost the whole UCP article 20 on the LC as a requirement.
I always believe that the aim of ICC rules is to make life simple. But I am unable to see whose life is getting easy by considering a copy of a transport document as not a transport document.
In my opinion, a copy transport document may not be a transport document, but it should still be subject to review under the transport articles “to the extent they may be applicable”; at least for those contents which are mentioned in the copy of the document. This will eliminate all the risks without affecting the interest of an honest beneficiary. Thus a document checker will be able to match the document with his or her expectations and be happy :)