Comment summary and proposed changes to ICC Draft Opinions 14 November 2012 Mexico City 1

Summary 2 15 draft opinions to review (Draft Opinion 771 was withdrawn prior to distribution to national committees). 24 National Committees provided comments (of which 2 indicated full agreement with all 15 drafts).

TA759 – 3 Comments 3 1 NC – Agrees but asks other questions relating to co- insurance. 1 NC agrees – but sees a possible conflict with J5 a and b of Draft 4 of the ISBP. 1 NC – Agrees, but suggests adding to the analysis that an organisation such as Lloyds of London signs a policy or certificate on behalf of several syndicates or insurance companies.

TA759 – Suggested Changes 4 Changes: None are proposed.

TA760 – 14 Comments 5 1 NC: agrees but suggests replacing second part of the conclusion with “in how far URDG will prevail is a question of applicable law.” 1 NC: conclusion to show URDG first and then supplementary applicable law (Turkish). 1 NC: Agrees but requires action from SWIFT for a clear solution for applicable rules on counter-guarantee and the guarantee that is quoted. Situations where MT760 shows URDG in 40C but local law is referred to in the text.

TA760 – 14 Comments 6 1 NC: Agrees but suggests deleting last part of the conclusion. It is for the law to decide. 1 NC: Does not understand the final sentence. 1 NC: Second half of the conclusion should be deleted as not sure whether URDG or law comes first. 5 NC: Agree, but delete last sentence of the conclusion. 1 NC: asks an additional question and asks for the answer to be incorporated into the response.

TA760 – 14 Comments 7 1 NC: Analysis implies that guarantee and counter- guarantee may also be subject to Turkish law, the guarantee and counter-guarantee are subject to Turkish law. 1 NC: Agree, but URDG first then local law.

TA760 – Suggested Changes 8 Changes: Delete “with no guidance ….. of any conflict.” and replace with “In how far URDG 758 will prevail is a question for the applicable law.”

TA761 – 5 Comments 9 1 NC: Agree, but change last sentence of paragraph 1 of the conclusion to “Therefore, use of “OTHR” is an express indication that the counter-guarantee is not subject to URDG”. 1 NC: Change the last sentence of paragraph 1 of the conclusion to “Therefore, the use of code word: “OTHR” without specification in the 2 nd sub-field will not be an express indication that a counter-guarantee is, or not, subject to URDG and the possible applicability of the rules would be dependent on the specification given in 77C details.”

TA761 – 5 Comments 10 1 NC: Disagrees. Believes that the current conclusion states that if the guarantor names the law in the text, it excludes URDG but if silent URDG will apply. 1 NC: Though field 40 may state NONE it cannot be said that the counter-guarantee has excluded URDG. You have to ask the bank that sent the message and ask them to amend the counter-guarantee accordingly. 1 NC: Points out an error in reference to the sub-article – should be 1 (b) and not 1 (c). Note: this is as received.

TA761 – Suggested Changes 11 Changes: Change last sentence of paragraph 1 of the conclusion to read ““Therefore, the use of code word: “OTHR” without specification in the 2 nd sub-field will not be an express indication that a counter-guarantee is, or not, subject to URDG and the possible applicability of the rules would be dependent on the specification given in 77C details.”

TA762 – 5 Comments 12 1 NC: Agree with the proposed conclusion but find the wording difficult to follow. The response does not answer all the questions. 1 NC: does not understand the first sentence of the conclusion and offers an alternative text. 1 NC: Agrees with the conclusion but suggests adding “except when applicable law prohibits open ended commitments.”

TA762 – 5 Comments 13 1 NC: Agrees but finds the analysis confusing. 1 NC: Merge paragraphs 5 and 7 of analysis otherwise there is a need to restate some of paragraph 5 in paragraph 7. Offers alternative wording for the conclusion.

TA762 – Suggested Changes 14 Changes: Merge paragraphs 5 and 7 of the analysis. Change conclusion to read “A confirming bank that adds its confirmation to a credit without expressing any conditions related to that confirmation, do so on the same terms and conditions as indicated in the credit. If the issuing bank sends a notice of non-renewal and the credit therefore expires, then the obligation of the confirming bank also expires.

TA763 – 7 Comments 15 1 NC: Partly agrees. Consider another possibility that the services are based on the goods that have been delivered. But still necessary for the beneficiary to present a copy transport document for goods actually shipped and to meet LC requirements. 1 NC: Agree but answer can only be based on guesswork due to poorly worded LC. It should be noted that the confirming bank should not have confirmed the LC until clarification was sought and not prudent that messages not responded to.

TA763 – 7 Comments 16 1 NC: Explicitly states that they agree. 1 NC: Confirming bank should have insisted on an amendment. Refusal is valid. 1 NC: Agree, but confirming bank should have requested an amendment. 1 NC: If a transport document for goods was intended this is bad issuance and bad issuance should be held against the issuer.

TA763 – Suggested Changes 17 Changes: Add last paragraph to the analysis “If the issuing bank intended that a transport document was only to be presented in the circumstances where the unpaid invoice covers the non-payment for goods, the credit should have explicitly so stated.”

TA764 – 11 Comments 18 1 NC: Add to point 5 in conclusion “This is an example of bad drafting, therefore the consequences are for the applicant.” 1 NC: Agrees, but instruction implies that documents are to be handled on a collection basis. 1 NC: Delete 3 rd paragraph of the analysis as it may lead to misinterpretation. Conclusion should stress that the new presentation was made within the validity and if compliant the issuing bank must honour.

TA764 – 11 Comments 19 2 NC: Opinion is too long and should have been returned to the presenter. 1 NC: Agree, but refer to re-presentation rather than a new presentation. 1 NC: Amend last part of conclusion paragraph 1 to read “the issuing bank will be obliged to honour when all the documents are subsequently returned to them and found compliant according to a new examination process.”

TA764 – 11 Comments 20 1 NC: This is a replacement presentation and not a new one. Problem arose due to absence of a date in the cover letter. 1 NC: Agree, subject to indication that documents were received in time. 1 NC: Agree, but delete second sentence of point 3 of the conclusion. 1 NC: Agree, even if beneficiary’s bank did not act according to UCP.

TA764 – Suggested Changes 21 Changes: Delete 3 rd paragraph of the analysis “It should be noted ….. sub-article 14 (d).” Change last part of item 1 of the conclusion to read “… or the presentation period, the issuing bank will be obliged to honour when all the documents are subsequently returned to them and determined to be compliant.”

TA765 – 12 Comments 22 1 NC: Beneficiary should have arranged amendment for the on board requirement. Agree with conclusion to discrepancy 2. 1 NC: Do not agree with conclusion to discrepancy 1. Poor drafting should not be decided upon by a nominated bank. 1 NC: Agree to the conclusion to the first discrepancy, but disagree on the second. Under common standards, both should be invalid. On its face, both discrepancies should be valid. Issuing banks should avoid ambiguity in their instructions.

TA765 – 12 Comments 23 1 NC: 1 st discrepancy disagree. By requiring “on board” the issuing bank modified article 23. For the 2 nd discrepancy, agree but disagree with part of the analysis. Incoterms should be referred to as delivery terms and not as trade terms. Delete “There was no …. underlying contract.” Third last paragraph refer to the fact that the credit is subject to UCP and not Incoterms. 1 NC: Bad wording and opinion should reflect this. 1 NC: Agrees, but unnecessary focus on Incoterms.

TA765 – 12 Comments 24 1 NC: Delete paragraph “ICC Publication No. 715 …. underlying contract.” 1 NC: Agree but include the remaining text of sub-article 23 (a) (iii). 1 NC: change 4 th and 5 th paragraphs to delete Incoterm and replace with Terms of Delivery (3 places). Both discrepancies are valid. 1 NC: Find conclusion on 2 nd discrepancy “tough”

TA765 – 12 Comments 25 1 NC: Remove the reference to Incoterms and publication 715. Add note regarding risks/liabilities associated with unworkable requirements. 1 NC: Use wording from UCP, Commentary on UCP and ISBP. Discrepancy 1, no discrepancy. Conclusion should refer to the fact that FOB Airport is not an Incoterm.

TA765 – Suggested Changes 26 Changes: Delete 4 th paragraph under analysis for discrepancy 2 “ICC Publication ….. underlying contract.” Delete 3 rd last paragraph under analysis for discrepancy 2 “Beneficiary and their bank’s … rules apply.

TA766 – 7 Comments 27 3 NC: Does not agree as there is no indication of issuance at load port. 1 NC: Agree, document should indicate evidence of issuance at load port. 2 NC: Agree, but delete the last paragraph of analysis. 1 NC: Place of survey and issuance are different, do not agree.

TA766 – Suggested Changes 28 Changes: None proposed.

TA767 – 9 Comments 29 1 NC: Discrepancy 1 and 2 are invalid. For discrepancy 1, no need to mention the exact airport of departure. AWB date should be QR688/17 instead of execution date. 1 NC: Disagree with discrepancy 1. ISBP 142 is inapplicable. 1 NC Agrees, but another credit not drafted correctly. Technically, the refusal is correct. 1 NC: Delete last paragraph of analysis for 1 st issue.

TA767 – 9 Comments 30 1 NC: Agree with conclusion. The issue date of AWB and shipment date is 13 June. Is AWB date in insurance document not correct by stating 17 June? 1 NC: opinion request too long. 1 NC: Agrees, but asked a further question. 1 NC: Flight date cannot be determined. Way discrepancy 2 was raised makes this an invalid discrepancy.

TA767 – 9 Comments 31 1 NC: Disagree on both discrepancies. Copy AWB should not be examined as an original. Discrepancy 2, if AWB is a copy there is no basis for cross referencing the data within that on the insurance policy.

TA767 – Suggested Changes 32 Changes: Delete “and, apparently contains no indication tat cover was effective as of 13 June 2011” from the last paragraph of the analysis to discrepancy 2.

TA768 – 2 Comments 33 1 NC: Query is inappropriate. 1 NC: Disagrees, instruction must be adhered to.

TA768 – Suggested Changes 34 Changes: None proposed.

TA769 – 7 Comments 35 1 NC: Disagree with analysis and conclusion. Signed and sworn are separate acts. Second sentence of the 2 nd paragraph of analysis should state “should” instead of “must”. The conclusion should read that the discrepancy is valid. 1 NC: Conclusion not accepted. 1 NC: Agree, understand that signature is considered as sworn. 4 NC: Discrepancy valid. Two different things.

TA769 – Suggested Changes 36 Changes: Delete the 3 rd and 4 th paragraphs of analysis. 2nd paragraph delete “must” insert “should”. Insert: “The credit required the invoice to be signed, sworn and detailed. From the text of the discrepancy it can be assumed that the invoice was signed and detailed but not sworn (although the credit did not specify the wording for such requirement). Conclusion: Even though the credit did not indicate the manner in which the invoice was to be sworn, the absence of such an indication is a valid reason for refusal.

TA770 – 16 Comments 37 1 NC: Disagree as in other cases may not be as clear. 1 NC: One system is not relevant, and HK is a Chinese port. 1 NC: Analysis is correct but UCP and ISBP or ICC opinions do not address geographical or political distinctions. If LC states “any Chinese ports” this includes HK, Macau, Taiwan, etc. 1 NC: Strongly disagree.

TA770 – 16 Comments 38 1 NC: Agree with the conclusion, but state that the credit should be more precise. 1 NC: No article in UCP to justify refusal. 1 NC: ICC should refrain from any reference to political definitions. 1 NC: Not a duty of a document checker to determine. No discrepancy. 3 NC: No discrepancy.

TA770 – 16 Comments 39 1 NC: Conclusion agreed but not the analysis. Delete first two sentences and the words “or any other SAR” in 3 rd line of 3 rd sentence. 1 NC: Agree. If HK not mentioned, mainland China only applies. 1 NC: Any Chinese port includes HK. 1 NC: A document checker should not need to know the economic/political status.

TA770 – 16 Comments 40 1 NC: Disagree. Another case of bad issuance. If no mention made, this includes Any Port in P.R. of China, HK, Macau and any port within ROC (Taiwan.

TA770 – Suggested Changes 41 Changes: ????????????

TA Withdrawn by Initiator

TA772 – 2 Comments 43 2 NC: Do not agree with conclusion. Document shows “see below” and the observation that the goods are produced by a Swiss company.

TA772 – Suggested Changes 44 Changes: None proposed.

TA773 – 2 Comments 45 1 NC: Agree with conclusion but disagree with part of the analysis. Reference to recommendation paper is superfluous. Find paragraph 5 misleading. 1 NC: Inappropriate query

TA773 – Suggested Changes 46 Changes: None proposed.

TA774 – 2 Comments 47 1 NC: R578 is not considered germane to the analysis. Delete reference to this opinion. 1 NC: Refer to poor wording in the credit. Agree with conclusion.

TA774 – Suggested Changes 48 Changes: None proposed.

TA752 – 2 Comments (not solicited) 49 1 NC: Do not agree and suggest ICC not to set position on this question 1 NC: ICC has discouraged sanction clauses and raises additional questions relating to sanctions. The final wording has been distributed and no further draft or comment process is required.