ICC opinion TA644 And Non Documentary Condition In LC

[iLC]

Hello,

i will appreciate your comments on ICC opinion TA644 which says

According to sub-article 14 (h), banks will deem a non-documentary condition as not stated (on the basis that there is no necessity for the beneficiary to provide any evidence of compliance) and will disregard it. Should the beneficiary, nevertheless, elect to insert such data on any other stipulated document, then it must ensure that the data does not conflict with the data in the credit. The view of the Banking Commission is that sub-article 14 (h) is not absolute and is qualified by the content of sub-article 14 (d).

now 14h says that bank will consider a non documentary condition as not stated and disregard it. i believe you will agree that "considering as being not stated" and "disregarding" is not the same thing. to me "considering as being not stated" means that its not there in there credit and i will not read it. then how come something which is i am not even reading can be considered against sub article 14d?

iLC

[shahriar]

dear iLC,

considering not being stated and actually not being stated are not the same thing. banker deals with documents. but what do we look into the documents? we look for facts. to make sure that we will be able to determine form the document from a document whether a particular fact has occurred or not we ask for certificates. thats the rationale behind the documentary conditions. with a non documentary conditions; that a supporting certificate has not been asked for, the bank is unable to determine the status of the related fact. so we are asked to disregard it. but if the presented documents some how shows the status of that even, there is no harm in accepting it. for example if a LC has a non documentary condition that goods must befit for human consumption and quality certificate has been presented showing that the goods are not fit for human consumption, one cannot just turn a blind eye on it and accept the document.

regd

shahriar

[iLC]

tnx

iLC