Experts please help

[blur]

Hi i need some help and advise here.

1) Let said i need to present my docs 21 days after shipment date as per LC.
If vessel sailed on 1st Oct, and i present my docs to my nego bank on the 21st Oct. Is this consider a discrepancy?
Present docs 21days after shipment date refers to presenting docs to issuing bank or nego bank?
Normally when i present docs to nego bank, by right how long they need to forward the docs to issuing bank, and how long they need to revert to the bene if they found discrepancies?

2) LC calls for COPY OF DOCUMENT OF COMPLIANCE AND SAFETY MANAGEMENT CERTIFICATE
COVERING THE CARRYING VESSEL.

And we present the bank a certificate which says vessel is ism code certified and holds a valid international safety management certificate as well as ism document of compliance as required by the solas convention 1974.
But bank said is a discrepancies. I thought its not! Since LC did not state what data contents inside this compliance and safety managment certificate they should accept this.

3) if LC allows partial shipment and on LC it said "FULL SET INSURANCE POLICY OR CERTIFICATE MUST BE AT LEAST FOR 110 PERCENT OF INVOICE VALUE IN A NEGOTIABLE FORM TO THE ORDER OF XXXX BANK"
So meaning, if i am doing partial nego, i should based on the partial nego value + 110 as insurred value and not the total cif full value + 110pct right?

[picant]

Hi Pal,

1) art 14 cpresentation not later than than 21 calendar days after the date of shipment(this day not to be counted as per art 3). SO 21 DAYS AFTER THE 1ST IS 22,

2)art 14 d, data in document not in contrast.

3) Cover 110% of the invoiced goods and not on the l/c amount:

IMHO, no discrepancies at all

Ciao

PS An l/c states always where documents must be presented, usually where the l/c is available or in same cases where it is expiring.

[LCstudent]

Hi picant !
I agree with Your point of view concerning 1+3.
Pt. 2 is for me a discrepancy due to the fact that L/C requires a COPY OF THE Doc of Compliance.
This is IMHO a fault in the L/C itself. No carrier or freight forwarder will be in the position to get such a copy..and which party has issued that document ? I feel such doc refers to the registration office of vessel or shipowner. So this doc seems to unreachable for a "normal" settlement and should be replaced/ amended WITHIN LC through/into the now presented documents, which reflects the requirement.
Please note furthermore Lord Summners (House of Lords) view years ago: quote:"There is no room for documents which are almost the same or do just as well" unquote.
Other comments are highly appreciated.
Rgds
LCStudent.

[iLC]

my answer are given in blue

1) Let said i need to present my docs 21 days after shipment date as per LC.
If vessel sailed on 1st Oct, and i present my docs to my nego bank on the 21st Oct. Is this consider a discrepancy?

no this not a discrepancy. in fact i agree with picant and LC student. you have time till 22nd.

Present docs 21days after shipment date refers to presenting docs to issuing bank or nego bank?

it depends on the availability of the credit. if the credit is available at the counter of the issuing bank, then you have to present the document to the issuing bank within 21 days.

Normally when i present docs to nego bank, by right how long they need to forward the docs to issuing bank, and how long they need to revert to the bene if they found discrepancies?

there could be two answer for this question. as per UCP 600 nominated bank acting on its nomination has 5 banking days to examine the document and after that has to forward the document to the issuing bank. problem is to determine actually when the nominated bank has decided to act on it nomination. theoritically its possible that the nominated bank would hold the document for a month and then start counting the 5 days. but this is just a theory and if such scenerio ever encountered, nominated bank would be in problem under governing law.

2) LC calls for COPY OF DOCUMENT OF COMPLIANCE AND SAFETY MANAGEMENT CERTIFICATE
COVERING THE CARRYING VESSEL.

And we present the bank a certificate which says vessel is ism code certified and holds a valid international safety management certificate as well as ism document of compliance as required by the solas convention 1974.
But bank said is a discrepancies. I thought its not! Since LC did not state what data contents inside this compliance and safety managment certificate they should accept this.

to me the clause is very simple. get a certificate from anybody with a statement that the vessel xyz maintain the compliance and safty regulation. thats all. but what you did, you gave a certificate that the vessel hold "that" certificate which is a discrepancy. stupid clause anyway.

dear lcstudent, when the carrier says that the hold the document, they should also be able to produce it. dont you agree

3) if LC allows partial shipment and on LC it said "FULL SET INSURANCE POLICY OR CERTIFICATE MUST BE AT LEAST FOR 110 PERCENT OF INVOICE VALUE IN A NEGOTIABLE FORM TO THE ORDER OF XXXX BANK"
So meaning, if i am doing partial nego, i should based on the partial nego value + 110 as insurred value and not the total cif full value + 110pct right?[/quote]
you are correct!!

[Ahmedshawky]

First of all its 21 days excluding the day of shipment so its 22 , what matters here is the available with/by bank if its the issuing bank then you got a discripancy already if its your bank its free of it

about how long your bank should take to forroward the documents to the issuing bank , here we go through that the official way and the practical way , the official way you let your bank have 5 working days revising the documents and the normal pactical way to push things up with your bank for my self and since my experience is in banks themselves never leave your documents unfollowed press on them to shorten this period as much as possible so if there are discripancies you have time to mend them and send free of discripancies documents

as for the documents of compliance and safety managment covering the vessel is it mentioned in the LC that issuer of such document if not so you can even issue it from any related party but if its stated that it should be issued by the shipping company agency etc .. you should have contacted the the shippeing company from the start to state the same wording in the clause

as for the insurance certifcate it should be issued as 110% from the presented commercial invoice on each of the shipments

best regards

A.shawky

[cristiand969]

It is widely and internationally recognized that Document of Compliance and Safety Management Certificate are docs which travel with vessels like Registration Certificate that one are obliged to keep it while travels with your car. Hence, a declaration like stated by inquirer does not fulfill the function of the requested document and it follows therefore that it will be rejected by banks.
As per International Safety management Code (ISM): A Certificate, called a Safety Management Certificate, should be issued to a ship by the Administration or organization recognized by the Administration. The Administration should, when issuing a certificate, verify that the Company and its shipboard management operate in accordance with the approved SMS.
To me such declaration stated equals with a requirement in L/C : 'Receipt of freight payment' and the beneficiary presents a certificate saying we certify we paid the freight ....' whic is for sure a discrepancy
Hope it helps!

[sansahay]

My comments are given in dark blue under the question and previous answers.

1) Let said i need to present my docs 21 days after shipment date as per LC.
If vessel sailed on 1st Oct, and i present my docs to my nego bank on the 21st Oct. Is this consider a discrepancy?

no this not a discrepancy. in fact i agree with picant and LC student. you have time till 22nd.

Present docs 21days after shipment date refers to presenting docs to issuing bank or nego bank?

it depends on the availability of the credit. if the credit is available at the counter of the issuing bank, then you have to present the document to the issuing bank within 21 days.
==> If you present documents through your bank, then your bank can certify on its forwarding schedule that docs were submitted within presentation period.

Normally when i present docs to nego bank, by right how long they need to forward the docs to issuing bank, and how long they need to revert to the bene if they found discrepancies?

there could be two answer for this question. as per UCP 600 nominated bank acting on its nomination has 5 banking days to examine the document and after that has to forward the document to the issuing bank. problem is to determine actually when the nominated bank has decided to act on it nomination. theoritically its possible that the nominated bank would hold the document for a month and then start counting the 5 days. but this is just a theory and if such scenerio ever encountered, nominated bank would be in problem under governing law.
==> I beg to differ. UCP is very clear about five banking days, and the fact that these 5 days commence following day after submission of documetns. There is no way the bank can hold on to documents for a month without action.
2) LC calls for COPY OF DOCUMENT OF COMPLIANCE AND SAFETY MANAGEMENT CERTIFICATE
COVERING THE CARRYING VESSEL.

And we present the bank a certificate which says vessel is ism code certified and holds a valid international safety management certificate as well as ism document of compliance as required by the solas convention 1974.
But bank said is a discrepancies. I thought its not! Since LC did not state what data contents inside this compliance and safety managment certificate they should accept this.

to me the clause is very simple. get a certificate from anybody with a statement that the vessel xyz maintain the compliance and safty regulation. thats all. but what you did, you gave a certificate that the vessel hold "that" certificate which is a discrepancy. stupid clause anyway.

dear lcstudent, when the carrier says that the hold the document, they should also be able to produce it. dont you agree

3) if LC allows partial shipment and on LC it said "FULL SET INSURANCE POLICY OR CERTIFICATE MUST BE AT LEAST FOR 110 PERCENT OF INVOICE VALUE IN A NEGOTIABLE FORM TO THE ORDER OF XXXX BANK"
So meaning, if i am doing partial nego, i should based on the partial nego value + 110 as insurred value and not the total cif full value + 110pct right?[/quote]
you are correct!![/quote]

[loankim]

Hi Cristiand969,

Yr sharing information is useful ! i also did think that such doc was discrepant.
we have so many ICC opinions which state that banker isnt expert in all related fields, all they can do is only basing on the face of docs. However we still face sub-art 14f mentioning abt " fulfill the function of the required document ", it seems not too easy to practise in reality once UCP and ISBP only cover some kinds of required document.
thats also the reason we are at this forum to give and get something called International Standard Banking Practice beyond ISBP publication.
Hope that next ISBP revision can help checking ones more than now .

rgds,

[abrar]

@sansahay & @iLC

Re your below response to ilC's comments regarding the 5 day preclusion rule, I believe iLC was looking at the issue from a unique viewpoint. The 5 day rule applies where a nominated bank acts on its nomination, and iLC was positing the view that if the bank decides not to act on its nomination at the time, it cannot be seen to be bound by the provisions of sub-art 16d, until such time it decides to act on its nomination. Therefore, in this case, the 5 days would only start from the date of "acting" on its nomination.

Of course, any sensible beneficiary would query the bank as to the fate of the documents after submission, and the bank would be required to give an appropriate response. Therefore, the situation whereby a bank could hold on to the documents for say, one month and then assert to the beneficiary and the issuing bank, that it has only then decided to act on its nomination is academic.