Draft and

Background to ISBP General Principles Invoices

Calculation of
and Preliminary A1 to A41
Considerations
Maturity Date C1 to C16
B1 to B18

Transport Insurance
Certificate of Origin Other Documents
Documents Documents
L1 to L8 M1 to Q11
D1 to J20 K1 to K23

2
General Principles
ISBP Paragraph A1 to A41
viii) A request to insert the credit number on a
document is usually at the instigation of the issuing
bank in order to facilitate the collation of documents
should one or more documents become detached from
the presentation. Provided all the stipulated documents
are received by the issuing bank, the absence of a
credit number or the mistyping of that number on a
document does not constitute a reason for refusal. The
exception to this position is where it is a requirement
of the importing country that the credit number be
stated on one or more documents. In such,
circumstances, the credit must clearly indicate that
this is the reason for the number to be shown on that
or those documents.
• IX) An issuing bank should not incorporate in a credit administrative conditions such as a requirement
for an additional set of copy documents to be presented for the issuing bank’s use, or a condition that
all documents may not be stapled. If nevertheless, such conditions are incorporated into a credit but
not complied with, this will not constitute a reason for refusal.
 Preliminary Conditions
Scope of the Application
The Credit and amendment application, the issuance of the
credit and any amendment thereto
 Abbreviations Copies of Transport
Certification
Docs.

Docs. for Which

Expressions Not Signatures and Corrections and UCP 600 Transport
Defined in UCP 600 Dates Alterations Articles Do Not
Apply

Issuer, Language,
Originals Vs. Copies Non Documentary Title of Documents Typos, Math.
of Docs. Conditions Calculations, etc.
 Abbreviation
LC Text states Document shows Compliance

ABC International ABC Int'l √

√
XYZ Co. XYZ Company
100 Kgs 100 Kilograms √
100 Metric Ton 100 MT
√
ASM International Asia Merchant x
International
 Abbreviation
LC Text states Document shows Compliance

ABC Industries Ltd ABC Ind. √

 Searching for standards against ambiguity…….
Heritage Bank v. Redcom Laboratories, Inc.
Issuing Bank - Heritage Bank
Beneficiary- Redcom Laboratories, Inc.
Can we reach same
conclusion in every
Applicant- Fiber-Wave
cases?
Underlying Transaction: Purchase of electronics.
Value: $215, 729.
One of the condition of the DC: "one copy of the invoice/bill of lading

The beneficiary had presented an invoice

Issuer rejected on the ground that B/L is not presented.

Court rejected IB argument:

"The virgule separating the two terms signifies that the beneficiary may provide either an
invoice or a bill of lading…
 Another trial…….
❑ DC asked for:
Description of the goods: 100 Pcs shirt [ 50/50 cotton/synthetic]

❑ Commercial invoice shows:

Virgules (slash marks “/”) may
Cotton Shirt 50 Pcs & Synthetic shirt 50 Pcs. have different meanings, and
unless apparent in the context
❑ Issuing Bank raises Discrepancy: used, should not be used as a
substitute for a word…
Description of the goods is not correspondent
with the same of the DC
The use of a comma when
indicating a range of data in a
After several discussions, it is revealed that credit such as ports of loading or
issuing bank actually asked for a shirt which discharge or countries of origin,
may result in different meanings
contains of 50 pct. cotton & 50 Pcs synthetic on and should not be used as a
each substitute for a word.
 Signature

Certificates, Certifications,
Declarations and Statements Date

Within
ISBP paragraphs A3- A5 another
signed and
This is to certify We declare dated doc.
Signature Signature on certificate, declaration, statement..
When certificate issued separately

A 3) When a certificate, certification, declaration or statement is required by a

credit, it is to be signed

When statement appears in another document

A 5) When a certification, declaration or statement is to appear in a

document which is to be signed and dated, it does not require a
separate signature or date when the certification, declaration or
statement appears to have been given by the same entity that
issued and signed the document.
 Within
another FASTLINE
signed and BILL OF LADING
dated doc. B/L No. FASTU10006
SHIPPED IN APPARENT GOOD ORDER
AND CONDITION
NO. OF ORIGINAL B/L(s) ISSUED (1)

8
Date????
 Example:
Date
❑ LC requires a certificate evidencing that the carrying vessel is not
more than 15 years old at the time of shipment.
❑ BL is evidencing shipment on 1 June 2013
 “THE TRUST INSPECTION CO”

A requirement that a
document, be dated
may be satisfied by a
date on the subject
doc. Indicating the
occurrence of an event.

INSPECTION CARRIED OUT ON 25 JUNE 2013

 A13)
A document indicating
a date of issuance and 24.09.2013
a later date of signing
is deemed to have
been issued on the
date of signing.

25.09.2013
Date Date on a certificate……

A4)

Date on a certificate, declaration or statement depends on:

❑ The type of certification or declaration required,

❑ Its required wording (in the LC or amendment)

❑ The wording that appears within it

Variations of date issue
Documents may indicate a date of issuance later than the date of
shipment
Documents Such but not limited to: A12) a
Certificate of Analysis

Inspection Certificate

Fumigation Certificate A12) c

When a credit requires a document such as, but not limited to, an “inspection
certificate”, this does not constitute a requirement that the document is to
evidence a pre shipment event, and it need not be dated prior to the date of
shipment
Document with evidence of pre-shipment event A12) b

When a credit requires a document to evidence a pre-shipment

event, the document is to indicate that the event took place on or
prior to the date of shipment, either by:

- Date of issuance

- Document’s Title

- Content
 Example 1
“THE TRUST INSPECTION CO”
By “Date”

25 MAY 2013

BL evidences
shipment on
31 May 2013
 Example 2 “THE TRUST INSPECTION CO”
By “Title”

1 JUNE 2013

BL evidences
shipment on
31 May 2013
 Example 3
“THE TRUST INSPECTION CO”
By “Content”

1 JUNE 2013
31 MAY 2013

BL evidences
shipment on
31 May 2013
 In Docs.
Original Vs.
Copies of Docs. Issued by
Beneficiary

Correction In Docs. Not

Issued by
& Beneficiary
Alteration
In legalized
Docs.
ISBP paragraphs A7- A10
 Types of documents
Doc. issued by the
beneficiary
Doc. issued by other
than the beneficiary

Draft
Commercial Document issued
invoice, by the
beneficiary beneficiary but Bill of lading, Doc . Issued by other
certificate except legalized or inspection certificate. than beneficiary but
draft certified by others Health certificate legalized by another..

Copies of document including non -negotiable

Copy Document
copy of transport document
 Document Issued by the Beneficiary…..
THE BIG SELLER

COMMERCIAL INVOICE

Quiz: Do corrections and

alterations to a commercial
invoice require authentication?

EUR

A7)a i
 THE BIG SELLER

COMMERCIAL INVOICE

Document Issued by the

Beneficiary but certified
by the Chamber of HAND BAGS
A7)a ii
Commerce
 Draft
A16) B 17)

B17) When no correction of data is

B16) Any correction of data on a
allowed in a draft, an issuing bank
draft is to appear to have been
should have included a suitable
authenticated with the addition of
stipulation in its credit.
the signature or initials of the
beneficiary.
 FASTLINE
B/L No. FASTU10006
Document SHIPPED IN APPARENT GOOD ORDER
AND CONDITION
Issued by NO. OF ORIGINAL B/L(s) ISSUED (1)

other than
beneficiary

PREPAID

A7)b i
Doc . Issued “THE TRUST INSPECTION CO”
by other than
beneficiary but A7)b ii
certified by
another

30 JUNE 2013

BAGS
 Correction on Copies of Document……
One Original plus one copy of Inspection Certificate from competent
authority

A7)c

Any Correction
of data in a
copy document
need not to be
authenticated

Issuing Bank raises discrepancy: What is your

2. Correction in copy document is not authenticated..
opinion
Need No Need

Unless
Draft or
legalized
Expression not defined in UCP 600

Shipping Documents

Stale documents acceptable

Third Party Documents acceptable

Exporting country

Shipping company

Third Party Documents not acceptable

Docs. Acceptable as Presented

 Expression not defined in UCP 600
Expressions
not defined in
UCP 600
Should not be
used in the
credit

Meaning
should define
in credit

Meaning as
per ISBP
Shipping Documents
“shipping documents” - all documents required by the credit, except drafts,
Teletransmission reports and Courier receipts, postal receipts or
A 19) a
certificates of posting evidencing the sending of documents .

Objectives:- To reduce Should the Courier receipts, postal receipts or

unwelcome discrepancy certificate of posting examined under article 25
of UCP-600 ?
……only to the extent expressly stated in the credit, otherwise according
to UCP 600 sub- article 14 (f) and not under UCP 600 article 25. A 10
 Example on Shipping Documents

Documents Required: (F46A)

+Drafts drawn on the issuing bank
Which documents to be +Commercial Invoice
+Packing List
signed manually?
+Bill of Lading
+Courier receipt evidencing dispatch of a nonnegotiable
documents to the applicant.
+An advice of shipment to be faxed to the applicant
on the day of shipment. Fax transmission report must
accompany the presentation.
+Commercial Invoice Additional Conditions: (F47A)
+Packing List +All shipping documents must be manually signed.
Not Defined in
+Bill of Lading the Credit
 Stale document Acceptable
31C: DATE OF ISSUE No last date of shipment
130601
31D: DATE AND PLACE OF EXPIRY No period of presentation
1306310 and/or last date of presentation
46A: REQUIRED DOCUMENTS:
BILL OF LADING ISSUED TO THE ORDER OF “XYZ” BANK.

Default period of in any event within the

presentation 21 Days expiry
If Shipment If Shipment
Presentation must be Presentation must be
date is date is
made on or before made on or before
02.06.2013 15.06.2013
23.06.2013 30.06.2013
 Stale document Acceptable….
Any presentation:-
After the default days for presentation On or before expiry date

Stale Document
31C: DATE OF ISSUE
A 19) b
130601
31D: DATE AND PLACE OF EXPIRY
130630 “stale documents acceptable” -
46A: REQUIRED DOCUMENTS: documents may be presented later
BILL OF LADING ISSUED TO THE ORDER OF “XYZ” BANK. than 21 calendar days after the date
47A: ADDITIONAL CONDITIONS: of shipment as long as they are
STALE DOCUMENT ACCEPTABLE presented no later than the expiry
48 : PERIOD OF PRESENTATION date of the credit. This will also
15 apply when the credit specifies a
period for presentation together
Shipment date is Presentation must be made with the condition ”stale documents
02.06.2013 on or before 17.06.2013 acceptable”.
22.06.2013
Third Party Documents acceptable
ISBP 681 21 (C) ISBP 745 A 19 (c)
third party documents third party documents
“ acceptable”- all
acceptable" – documents for which:
all documents, excluding ❑ the credit or
drafts but including
invoices, may be issued by ❑ UCP 600 do not indicate an issuer,
a party other than the except drafts,
beneficiary.
may be issued by a named person or entity
other than the beneficiary.
Commercial
Invoice
A commercial invoice must appear to have been issued Excluded
by the beneficiary (except as provided in article 38);
Third party documents not acceptable” –has no meaning and
is to be disregarded. - ISBP 745 A 19 (d)
An Exercise on Third Party Document Acceptable
Documents Required:46A:
+ BILL OF EXCHANGE
+ COMMERCIAL INVOICE
+ BILL OF LADING
+ INSURANCE POLICY
+ INSPECTION CERT. ISSUED BY THE TRUST
CO. EVIDENCING ASH IS COMMERCIALLY FREE
+ CERT. OF ORIGIN Only these may be issued by any named
+ WEIGHT NOTE person or entity other than the Benef.

Additional Conditions:47A:
+ THIRD PARTY DOCS. ACCEPTABLE
 MT 700
Documents Required: (46A) Does this clause
+Drafts drawn on the issuing bank
intends the BL and
Third party +Commercial Invoice Insurance policy to
documents not +Bill of Lading be issued by the
Acceptable beneficiary?
+Insurance policy
Additional Conditions: (47A)
+Third party documents not acceptable

To Be
Disregarded
 Exporting Country

receipt by Exporting country

the carrier

from which
shipment or Where the Origin of the
dispatch is beneficiary is goods
made. domiciled
 Example of Exporting Country
Beneficiary (F59): ABC Co., Ltd. Singapore.
Place of Receipt: (F44A): Nepal
Port of Loading: (F44E): Any Indian
Who may issue the seaport
certificate of origin? Port of Discharge: (F44F): Chittagong
seaport
Documents Required: (F46A)
+Certificate of Origin issued by the
chamber of
+Singapore Chamber of Commerce commerce of the exporting country
OR certifying that goods are of China origin.
+China Chamber of Commerce OR
+Indian Chamber of Commerce OR
+Nepal Chamber of Commerce
Not defined in
the credit.
 Shipping Company
Shipping Company

when used in the context of the issuer

of a certificate, certification or declaration
relating to a transport document

No matter whether the

For CPBL Owner,
Carrier, Master same entity has issued or Charterer , Master
or their agent signed the transport or their agent
document
 Example of Shipping Company
Documents Required: (F46A)
Not defined in
+Bill of Lading
the credit.
+Shipping company’s certificate certifying that shipment not made
through Israeli flag carrying vessel.
Complying
Certificate
This is to certify that shipment
evidenced vide BL No.123a was
not carried out in Israeli flag
carrying vessel.

For XYZ Forwarding

RickyPonting
As agent for the carrier
ABC SHIPPING LINE
Documents acceptable as presented
46A: REQUIRED DOCUMENTS: An educational
- Invoice in 3 copies
- Bill of lading full set
case study:-
- Packing list issued in 3 copies by the bnf stating
that the goods are packed in standard seaworthy packing.
- Certificate of origin issued by chamber of
commerce of the exporting country
- Quality certificate issued by the BUREAUE VERITAS
stating the quality, quantity and specification of the goods.

47A: ADDITIONAL CONDITIONS

- Documents acceptable as presented
The beneficiary may present is the
ONLY one packing list Presentation
discrepant?
Documents acceptable as presented
Documents acceptable as presented” -means a presentation may consist of one or
more of the stipulated documents provided they are presented within the expiry
date of the credit and the drawing amount is within that which is available under
the credit.
The documents will not otherwise be examined for compliance under the credit or
UCP 600, including whether they are presented in the required number of
originals or copies.

It’s a packing list

How the
the presentation is made within the expiry date of
presented the LC
packing list the drawing amount is within that which is
examine..... available under the LC.
NO DATA COMPARED
 When LC
Language Silent
When more
then one
Language
required

Language on
stamps,
endorsement
 LANGUAGE : A 21
Document may be
Credit Silent issued in any language

Language The Data Required by the CREDIT

Credit or UCP 600 are to be
in that language UCP 600
Credit Stipulate:
One Language
Required to
NB or CB doesn’t restrict examine the date
no. of acceptable language in all acceptable
Language Credit Stipulate: language
Two or more
Required to
NB or CB restricts no. of examine the date
acceptable language in acceptable
language ONLY
LANGUAGE : A 21
 How many
original to be
presented if
LC is Silent

When

Originals and copies Documents itself

indicates no of
original issued

Photocopy
of Signed
document
 Original and copies …
The number of originals to be presented must be at least
A29) a
the number required by the credit or the UCP 600……..

UCP 600,
If credit is silent Field 46A: Invoice
Article 17(a)
No. of
Field 46A:
Original If credit required Two original Invoice
Two Original

Field 46A:
If doc. Itself indicate
One Original Insurance certificate

ONLY APPLICABLE
FOR INSURANCE
AND TRANSPORT
DOCUMENT
A29) c

When a credit (LC) requires presentation of less than a full set

of original transport documents, but does not provide any
disposal instructions for the remaining originals, a
presentation may include the full set
 Copies of Document……
One Original plus one copy of signed Inspection Certificate from competent authority…..…………
A29) d iv

-A Photocopy
- Copies of original
that apparently
signed or
-When not prohibited,
a signed original

Issuing Bank raises discrepancy:

1. Copy document is not signed and
2. Correction in copy document is not authenticated.
 Other Document
• What it is.
• Commonly asked other document:
– Certificate of Origin
– Packing List
– Weight List
– Pre-shipment Inspection Certificate.
– Health Certificate
– Phytosanitary Certificate.
– Radiation Certificate
– Certificate of analysis. Etc.
Basic Requirements of Drawing Draft
 To be Drawn by beneficiary/
Drawer second beneficiary, if applicable

To be drawn on the bank stated

Drawee in the credit

To be in accordance with the

Tenor terms of the credit

Date of
To indicate date of issuance
Issuance

To be drawn for the amount

Amount
demanded under presentation
Certificate of Origin
When Credit required
presentation of a certificate of
origin, it will satisfy by
presentation of :

❑ Signed Document

❑ Appears to relate to the

invoiced goods

❑ Certifies their origin

INVOICED If credit silent

GOODS regarding
ORIGIN
issuer, it may be any
party including the
beneficiary, issue of the
SIGNED certificate of origin

DATE
When a credit requires the
presentation of a
specific
form of certificate of
originsuch as a GSP Form A,
only a document in
that specific formis to be
presented
 Indication of the
“Beneficiary”

When a credit requires the

presentation of a certificate of ACCEPTABLE
origin issued by the
beneficiary, the exporter or
the manufacturer, this
condition will also be
satisfied by the presentation
of a certificate of origin
issued by a Chamber of
Issued by “Chamber of
Commerce or like, provided it Commerce” even if LC
indicates the beneficiary, the asked for BNF
exporter or the manufacturer
as the case may be
When a credit requires the
presentation of a certificate of
origin issued by a Chamber of
Commerce, this condition will
also be satisfied by the
presentation of a certificate of
origin issued by a Chamber of ACCEPTABLE
Industry, Association
of Industry,
Economic Chamber,
Customs Authorities
and Department of
Trade or the like
 MT 700
Description of Goods: (F45A)
+Indian Orange.

Consignor: Consignor:
ABC Co Ltd. ABC Co Ltd.
Mumbai, India. CERTIFICATE Mumbai, India. CERTIFICATE
Consignee: XYZ Co Ltd. AOF ORIGINof origin isConsignee:
certificate to appear to
XYZ Co Ltd.
OF ORIGIN
relate to the invoiced goods, for
example, by:
a. a goods description that
corresponds to that in the credit or a
description shown in general General terms
Correspond
not in conflict with the Terms goodsnot
with Credit Net Weight: 500 MT. Net Weight: 500 MT.
description in the credit; or conflicting
Goods: b. referring to a goods Goods:
description
Orange appearing in another Juicy Fruit
stipulated
document
Barakaobam
or in a document that is Barakaobam
attached
for to, and forming an integral for
Goods are of India origin. part of, the
Customs certificate ofGoods
Authority, origin.
are of India origin. Customs Authority,
India. India.
Applicant: (F50)
It is not But when But when the
XYZ Co Ltd., 100 Dhaka, Bangladesh. May be shown
mandatory to shown mustcredit has been
Beneficiary (F59) as any party
show consignee
Consignor: not conflict transferred, the
JUICY FRUIT KINGDOM, Main Bill of Lading
Street, Shangai ,
information
stated in the
first beneficiary
ABCinCo Ltd. with the
China credit except the CERTIFICATE
Consignor: ABC Co BL No.123a CertificateMumbai,
of India. transport docmay be stated to be
Documents
Ltd
Required: (F46A) +Bill of Lading beneficiary
consigned to the
origin OF ORIGIN
the consignee
Consignee: XYZapplicant.
Co Notify: Consignee: JUICY
Ltd. 100 Dhaka, Complying
FRUIT
Bangladesh
KINGDOM, Main
Pre-carriage: Place of Receipt: XYZ Co Ltd., ,
Street, Shangai
Ocean Vessel: 1000 MT Raw Port of Loading: 100 Dhaka,
Titanic 001 Sugar in Bulk Rotterdam
China
. Bangladesh.
Port of Discharge: Place of Final
Chittagong Destination:
Net Weight: 500 MT.
Container No./Seal No./Marks & Nos.
Shipping Marks: Shipped on board Titanic at
IMPORTER LTD./ Chittagong on 10oct13 Goods:
EXPORTER INC/ROT/CTG. Barakaobam Orange
ABC Shipping Line,
As carrier
Barakaobam
for
Not Complying Customs Authority,
Goods are of India origin.
India.
 Packing List,
Note or Slip Weight List,
Note or Slip

Beneficiary’s Analysis,
Certificate Inspection
and Other
Certificates
 Case Study
Suppose a credit required amongst other things: 1) a packing list; 2) a Commercial Invoice for insulin; 3) a Draft
drawn on applicant; 4) a Pre shipment Inspection Certificate issued by MMM company; and 5) a certificate of origin
issued by Indian Chamber of Commerce.

After examining the documents a confirming bank determined that the documents were not in compliance with the
terms and condition of the credit. Because:

1) Packing list is not signed by the beneficiary; It is not a discrepancy

2) Pre shipment Inspection certificate’s issuance date is later than the shipment; It is not a discrepancy

3) Certificate of Origin is issued by the beneficiary; Discrepancy

It of
4) The goods description under certificate of origin is shown lifesaving drugs instead is not a discrepancy
insulin and

5) There is an correction in Draft which is strictly prohibited in our internal bank policy. Were the
discrepancies determined by the confirming bank valid? It is not a discrepancy
ANY QUESTION?