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Dear all,
I need your views in the following issue:
Among other documents called for in a credit it was required presentation of a CMR countersigned by applicant at the place of destination and a Health Certificate.
Facts:
1. presentation of documents was made on 22.09.2008.
2. CMR shows shipment date 31.08.2008 and date of arrival (as shown by the date when buyer countersigned at destination) - 05.09.2008.
3. The health certificate shows date of issuance 01.09.2008 BUT also states: 'This certificate is valid until 15.09.2008.
My query:
How can we interpret document (is still valid or invalid at the time of reviewing documents) considering the following:
+At the time of goods arrival Healt certificate was valid and buyer benefited from such document accordingly
+ At the time of presentation document was no longer valid so practically we have no document.
I look forward to hearing your opinions
regards
Cristian

Dear Cristian,
Tricky issue and practical indeed. may be i am wrong, just comments for more insight comments from others.
Your Quote:
+At the time of goods arrival Healt certificate was valid and buyer benefited from such document accordingly
.
My thinking: conclusion may be a bit outside UCP
let assume, your cerdit requirement health certificate without stipulating the data content.
.
document presented:
health certificate with an statement that the goods are not fit for human consumption[deregoary statement]
.
ICC opine:
DOCUMENT MUST BE ACCEPTED.
CONCLUSION:
Here the applicant is not at all benefited from the document whereas your stipulated document has a bit.
.
Another issue:
According to ARICLE 34, BANKER ASSUME NO RESPONSIBILITY TO LOOK INTO THE VALIDITY OF ANY DOCUMENT. BUT I AM A BIT CONFUSED WHETHER THIS ARTICLE CAN APPLY IN YOUR SITUATION OR NOT.
WAITING FOR OTHER COMMENS
REGARDS
NESAR

Dear Nesar,
The reason behind my statement ' buyer benefited of that document' is that when responsability of the seller ended (see delivery date) the buyer had still a valid document. I did not claim it is outside or inside of LC. I gave a reason regarding validity of document. For any other readers: pls disregard the above statement in my original posting for avoiding a possible false lead.
Regards
Cristian

dear cristian,

thanks for sharing. i have the following view on the topic

1. the document is not valid at the time of presentation and therefore not acceptable. there was a ICC opinion on such issue i remember. sorry, cant remember it now. by the way, i assume that the certificate is from a independent authority and you have the original of it.

further you said that the buyer benefited from such document accordingly. how can you be so sure? it seems its a food item and i further assumes that its for resale. if my assumptions are correct,then the buyer may also require the certificate during resale and the certificate is expired. so its of no good. in my country, in absence of health certificate, the whole consignment may be destroyed. so i think i will refuse the presentation.

and dear nesar,
you made me total confuse. do we share the same UCP?

here is mine

A bank assumes no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any document, or for the general or particular conditions stipulated in a document or superimposed thereon; nor does it assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods, services or other performance represented by any document, or for the good faith or acts or omissions, solvency, performance or standing of the consignor, the carrier, the forwarder, the consignee or the insurer of the goods or any other person.

sorry but i cant find any statement which says that a expired document is acceptable.

regards

mitra

Dear mitra,
If you find by chance the opinion you had written about pls do keep me informed.
The export is not of food but of animals. According to many inter-state regulations the producer should provide both for sales and for customs in importing countries a health certificate proving that the animals were free of any desease at the time of importation. Moreover the health certificate as you anticipated is issued by a special local authority in exporting country but for a period after which the animals should be vaccinated again and then reissued other certificate. These are the facts 'outside' the LC. The common sense in my views drove me that this certificate is still in accordance with credit terms. I have made a comparation with a non-negotiable seaway bill of lading whereby a contract of carriage may have been finished but doc presented after that. I mean that when a non-negotiable seaway is issued , a company is named as consignee and that company can take possesion of the goods based on 'reasonable proof o identity by the carrier whithout necessarily surendering a BL'. When goods were taken over the contract of carriage is terminated but the documents still not settled (under L/C).
Is therer anything else you want to add that common sense cannot be applied here?
rgds
Cristian

dear mitra,

are you sure that there is a opinion. i think you may read it somewhere else. i had a quick look in my copies but..

anyway, cristian, this is really a tough case and a rare one too. i thought over the issue for a long time. for strict compliance i will reject the document. my logics are

1. delivery of the goods is an issue outside the LC. whats the proof that the applicant was aware of the short expiry during the delivery?

2. will you accept the document if it was a year old? rule is rule. there is no place for tolerance

3. whatever is the document, it must have a legal validity, even a packing list. a expired document is as good as a expired medicine.

4. though the goods were delivered to the applicant, the ownership is still to be transfered. since banks deals with documents, it must be able to see that the goods are in order at the time of honor.

its not that there is not logic against this. but i will not discuss it right now. about your analogy with a non negotiable bill of lading, i am not sure whether that really matches or not since these two documents have very different purpose. if you think of a performance guarantee, then i think you will reach a different result; just for argument. i think you better ask the applicant. and please do share the result / saying of the applicant with us. i will keep searching on the issue.

regards
iLC

Dear All,

Very interesting case but I must say there is some misleading thought. In credit operations, bankers have the only scope to determine the validity of any document that is called under a LC, is the validity of presentation of Credit compliant documents.

Dear Cristian, you didn't mentioned the requirements of the LC related this case in respect of latest date of shipment, period for presentation and the expiry of the LC ? So, how can a perfert discussion can be evolved ?

From your given information we understand that the disput arose only in relation to the Health Certificate when it stated that 'This certificate is valid until 15.09.2008".

What it indicates ? Does it indicate that this is the validity of the shipped goods ? I don't think so.

Let's find out answers of following questions:

1. What was the exact wordings of the condition of the LC while it required a Health Certificate ? I mean who to issue it, what should be the data content, would it certify any validity for consumption of the shipped goods etc...?

Now check, does the presented Health Certificate complies under the requirement of the LC ? [ Pls also keep in mind that it is the duty of the issuing bank to structure the wordings of terms and conditions of their LC which needs specific compliance of the requirement of any local regulation. This should be covered at the time of issuance of the LC ].

2. What was the required latest shipment date, period for presentation of documents and the expiry date of the LC ?

Now check, does the stated Health Cetificate meets this requirement ?

If all of the above complies and Cristianyou stated in you post that as per country regulation "......the producer should provide both for sales and for customs in importing countries a health certificate proving that the animals were free of any desease at the time of importation" and if this requirement duly put in your LC and complied, is there any reason for refusal of the stated Health Certificate ?

The validity you talking about is the validity of the certification, not the validity of presentation. If the Health Certificate complies the requirement of the LC and presented within the validity of presentation of the LC, can we refuse it ? Because the validity you are talking about falls within Article 34 of UCP-600.

Regards to you all.

Dear Bhossain,
kindly note that I posted all RELEVANT and NEEDED information one can make judgement based on that. If I stated Healt certificate it meant that there are no further conditions. The same goes with the rest of your questions.
Secondly, you have to make difference between what I have originally posted and my further explanation given to mitra. To repeat, NO there was not of that stated in LC, I quoted from the practical and country regulation's point of view.
Thirdly, I realy enjoyed reading your statement

bhossain wrote:The validity you talking about is the validity of the certification, not the validity of presentation.

Although can be ranked as a perfect saying please note that this is NOT 100 percent true in our context. And I would like to refer to you art. 175 of ISBP just for a simple example. Therefore an expiry date of a document does matter in some stances.
regards
Cristian

dear bhossain,

you just told the other side of the story which i avoided. there was something more that you can add i believe. i appreciate that you put emphasis on the fulfillment of function. however still i will stick to my previous position. banks deal with document and the certificate before the document checker has no legal validity. whether the document has served its function is not important check.

iLC

dear ilc,

if it was a expired ID card, will you say that the person in concern has no legal status?

rizvid

dear rizvid,

if you have a ID card of your school and commit a crime now, do you expect your school to get involved in it? surely not. here ID is not only about legal status but about responsibility of yours. and after the expiry your id, your school has no responsibility for you. similarly if you honor that certificate now which has expired and tomorrow a dispute occurs then the issuing authority will say that when you honor this certificate, it was expired. so im not ready to get involved.

iLC

Dear All,
Pls find below a link where some experts opine on the subject captioned:
http://www.lcviews.com/swq_116.htm
regards
nesar

Dear Cristian,

Thank you refering Para 175 of ISBP. And fortunately that para is reflecting the same principle as I said.

I would like to draw your attention to the fact that Para 175 of ISBP relates to such a documents which is covered by a specific Article of UCP-600. But the well discussed "Health Certificate" falls within the scope of Sub-Article 14 (f) of UCP-600. Both issues are not same.

Dear Bhossain,
When I made the statement: Therefore an expiry date of a document does matter in some stances you may want to know that I reffered, as the statement implies, that such situations still exist and it was exclusively a reply to your statement : The validity you talking about is the validity of the certification, not the validity of presentation.
Therefore I would much appreciate not to create confusion as I am sure you understood very well that it was an answer to your question.
brgds
Cristian

Dear iLC,

Re. Your question to Mitra:
QUOTE
2. will you accept the document if it was a year old? rule is rule. there is no place for tolerance
UNQUOTE

UCP Article 14 (i) sates: A document may be dated prior to the issuance date of the credit, but must not be dated later than its date of presentation.

SO, UNLESS YOU PROHIBIT SUCH SCOPE OF PRESENTATION THROUGH YOUR LC BY INCORPORATING A CONDITION, YOU MIGHT HAVE TO ACCEPT A DOCUMENT IF IT IS A YEAR OLD. THIS IS THE RULE.

I think we are wandering off the main subject. The answer to my question has already been given from some experts as Nesar noticed (nesar, congratulations you stay tuned all the time )
The answer is: NO! THE DOCUMENT IS NOT DISCREPANT.
Therefore, drop it.
regards
Cristian

Hi Pals,

first of all, had the bank well indicated the documents to be presented?
CMR means: Intl road waybill under CMR rules, and this transport document is normally used to forward the goods directly to the applicant. Requesting a copy signed by the consignee/applicant is very dangerous. Moreover the Health Certificate must accompany the goods, to be showed to the Customs or sanitary authorities in Import country(CMR had to indicate that original Health Certificate was attached to documents accompanying the goods). I don' t know if some ICC opinion has been issued about that, but IMHO I considere the Health certificate, document no discrepant.

Ciao