DOES THIS CONSTITUTE A DISCREPANCY?

[ldt5205]

LC REQUIRE SHIPMENT ADVICE SHOULD BE FAXED TO APPLICANT(AT FAX NO.***)，COPY OF SUCH FAX SHIPMENT ADVICE MUST ACCOMPANY WITH DOCUMENTS.
AFTER RECEIVING DOX,THE ISSUING BANK REFUSED TO HONOR DUE TO THE COPY OF FAX SHIPMENT ADVICE WITHOUT FAX NO.***.
DOES THIS CONSTITUTE A DISCREPANCY?

[jmitra]

i guess the LC is silent on the content of the fax advise. therefore the fax advise complies without the fax no.

[ajoy]

would a court agree .?

Cheers

[ldt5205]

The following comments are from an UCP Drafter-Mr.Chee Seng Soh-consultant, association of banks in singapore, singapore, representative to the ICC Commission on Banking Technique and Practice. For your reference, we now quote his answer to our inquiry regarding discs raised by your good bank.
/Quote/
'Answer: It is not discrepant if, on its face, the document shows as fax advice unless the LC requires the fax copy to show fax number.
/Unquote/Regards

[ajoy]

good company to boot.

Do update us on the case ... I mean the response of the IB to your message ...

(Hope the IB had merely been overzealous or careless in pointing this out as a discrepancy and there are no underlying disputes or genuine issues under the LC)

Cheers

[bdesh]

HI EVERYBODY,
.
PLS REFER TO ARTICLE 14f OF UCP600 WHICH STATES AS UNDER:-

If a credit requires presentation of a document other than a transport document, insurance document or commercial invoice, without stipulating by whom the document is to be issued or its data content, banks will accept the document as presented if its content appears to fulfil the function of the required document and otherwise complies with sub-article 14(d).

SINCE DATA CONTENT OF THE FAX ADVICE NOT STIPULATED IN THE LC AS WELL AS ITS CONTENT APPEARS TO FULFIL THE FUNCTION OF THE REQUIRED DOCUMENT AND OTHERWISE COMPLIES WITH SUB-ARTICLE 14(d), BANK IS TO ACCEPT THE DOCUMENT AS PRESENTED.
.
ACCORDINGLY THIS DOES NOT CONSTITUTE A DISCREPANCY.
MORE COMMENTS TO BE APPRECIATED.

[ldt5205]

IF LC REQUIRES SHIPMENT ADVICE SHOULD BE FAXED TO APPLICANT(AT FAX NO.***)，FAX REPORT MUST BE PRESENTED.
WILL THE DOX BE REFUSED BECAUSE OF THE FAX REPORT WITHOUT FAX NO.***?

[wongvv]

Hi !

The function of fax transmission report is to evidence the fax no. , fax date and status performed. Therefore fax no. should be included.

To the previous discussion, I agree with "no discrepancy" comments. However, I think that the role of fax number stated in the L/C should also be deeply considered. There may be some possibilities.

1. for reference only - no discrepancy.
2. a condition - Since fax advice copy is required, it could be treated as documentary condition.
Therefore documents must evidence compliance. - discrepancy
3. document's contents - discrepancy.

It is difficult to tell which possibility is 100% sure.

V.V.

[ajoy]

Dont have anything to add..

Cheers

[shahriar]

IF LC REQUIRES SHIPMENT ADVICE SHOULD BE FAXED TO APPLICANT(AT FAX NO.***)，FAX REPORT MUST BE PRESENTED.
WILL THE DOX BE REFUSED BECAUSE OF THE FAX REPORT WITHOUT FAX NO.***?

i think i will refused the documents in this case. a fax copy without a fax number does not fulfill the function.

[ajoy]

Hi

I do agree that a fax report must have the fax number to be complete but it is my opinion and I am sure there are people who maynot agree. After all the LC does not specify what the fax report must contain. If report merely says that a fax was sent on such and such date to such and such party and detailed such and such shipment it is still a report even if it gives no fax number....

On another line of thought:

Is this one of those frivolous discrepancies. How serious is this issue to begin with?

All said and done the fax report merely functions as proof that the fax was sent regarding the shipment under this LC. Are we resonably sure the fax was sent on time and with necessary details. I would say yes. Even if it was not sent did the applicant lose any money or have any other trouble .. I think no except in really unusual circumstances. So why the fuss by IB over this. All they need to do is check with applicant who are very very unlikely to reject docs on this discrepancy.

I think this is one classic example of banks ( read IB in this case) blocking rather than facilitating trade - nothing here that a phone call couldnot have sorted out.

Looking forward to your comments

Cheers

[shahriar]

I am sure there are people who maynot agree.

i also think so!

[nesarul]

Dear ,
I think shahriar and ajoy angry with me because i am in their "there are in many people" group.
I never consider, fax no. is the sole option to determine the check "fulfil function" of a fax copy.
If you consider the credit condition:
........................copy of such fax advise must accompany shipping document.
now consider:
copy of such of what..... that is relevant to a shipment advice of a particular letter of credit transaction. so mentioned anything relevant to the particular transaction such as : credit no. invoice no. and so on may consider for fulfil function.
if i am in wrong track ,pls help me to come into light...
regards
nesar

[ajoy]

I am on your side...of the divide..

There are two differnt cases here:

Initial case from IDT :

LC REQUIRE SHIPMENT ADVICE SHOULD BE FAXED TO APPLICANT(AT FAX NO.***)，COPY OF SUCH FAX SHIPMENT ADVICE MUST ACCOMPANY WITH DOCUMENTS.

Here we are all agreed that it is not a discrepancy

2nd case from IDT:

What if a fax report is required?
by ldt5205 on Fri Jul 24, 2009 10:16 am
: IF LC REQUIRES SHIPMENT ADVICE SHOULD BE FAXED TO APPLICANT(AT FAX NO.***)，FAX REPORT MUST BE PRESENTED.
WILL THE DOX BE REFUSED BECAUSE OF THE FAX REPORT WITHOUT FAX NO.***?

Here we may have different opinions based on
1) Is a Fax report an indisputably standarized document which needs to show fax number.

& 2) Even if the fax report must show the fax number is this really a material discrepancy ? Does the fax report without the fax number still fulfill the requirement of the LC.

On 1) we may have different opinions

( Honestly I would expect a fax report to show the fax number but as I said not all would agree with me and I see thier point)

on 2) I would not point this out as a discrepancy.

As you rightly point out 'Fax report' merely needs to evidence that a fax was actually sent. Common sense would indicate that a fax was actually sent by the bene and the report even if technically incomplete serves its purpose.

For me the key question here is was the fax sent as per the LC and if not sent then did it harm the applicant's interests in any way.

The report means nothing. In my opinion such docs serve no purpose. If the fax was sent and correct report not submitted applicant still got the fax. If the fax was not sent the report is redundant.

(Frankly, even if the actual Fax was not sent it is not such a life and death issue. I doubt if the applicant would refuse to take up documents on these grounds assuming there are no ongoing disputes between bene and applicant.)

So I repeat I do not think this is a material discrepancy and I repeat that even at the risk of being technically incorrect.

My stand is : I cant be 100 % sure that this is a technical discrepancy with the info available. And even if it is indeed a technical discreapancy I would not quote it as such. As IB at worst If I had doubts I would call up the applicant and sort it out.

As you can see that I dont care as much about the technicality as much as I care about the customer...

Cheers

[shahriar]

Dear ,
I think shahriar and ajoy angry with me because i am in their "there are in many people" group.
I never consider, fax no. is the sole option to determine the check "fulfil function" of a fax copy.

big brother, i am on your side. i was just talking about the theory and i still believe that this fax report is discrepant. we are talking about two different document here. 1. fax copy; which i interpret as a copy of the shipment advice send to applicant by fax.
2. fax report; which is a report showing that the fax was send to xxx successfully. as for the second case, consider the clause again "LC REQUIRE SHIPMENT ADVICE SHOULD BE FAXED TO APPLICANT(AT FAX NO.***)，FAX REPORT MUST BE PRESENTED". now the content of this document is not defined in UCP and we have to follow 14f. "appear to fulfill its function. now my understanding says that the document checker would like to see in the document that the shipment advise was sent to the applicant by fax. how could the examiner have that idea if the fax report does not show the no. especially when the credit quote the fax no.

however i agree with dear ajoy. the fax report does not make significant difference and is not a life and death issue either. if the issuing bank sticks to this discrepancy, the intention is not certainly good.

[ajoy]

Reference your quote below:

now the content of this document is not defined in UCP and we have to follow 14f. "appear to fulfill its function. now my understanding says that the document checker would like to see in the document that the shipment advise was sent to the applicant by fax. how could the examiner have that idea if the fax report does not show the no. especially when the credit quote the fax no.

What if the Fax report lokked something like this:

Fax Report

A fax was sent as required by LC no ......to applicant ...(name and address.) on such and such date...


bene
Signed and sealed with love

Would that satisfy our friendly doc checker at IB you think ...

[nesarul]

Dear,
During the lifetime of UCP 500, The linkage formula has got an extended application which was supported by various court and Documentary credit expert that quote] " the document presented under a particular credit transaction must reflect that each and every document are related to that particular transaction"[[/quote].
.
Now at least commentary [no other official ICC view found] confirmed us that the linkage formula is not exist.
Despite that if anything confirm from the fax report that it will related to that particular transaction, i would consider the Fax report as presented and fuifilled function and thereby no discrepant.
Regards
Nesar

[shahriar]

Fax Report

A fax was sent as required by LC no ......to applicant ...(name and address.) on such and such date...

i guess this will be accepted. actually by fax report i only considered the auto printed one line fax report which usually contains the fax no. but this was really a great one

[nesarul]

Dear ajoy,
May we refer ICC official opinion R-203 1995/96 in this case????
regards
nesar

[ldt5205]

Dear nesarul:
ICC official opinion R-203 1995/96 refers to the case,in which dox was presented not as required by IB.I think it is not suitable for this case.
best regards
ldt5205

[nesarul]

Dear ldt5205,
Let assume credit requires: fax report of such advice
Here Ajoy make a posting regarding presentation of document for compliant of above condition:

ajoy wrote:
Fax Report

A fax was sent as required by LC no ......to applicant ...(name and address.) on such and such date...

R-203 also talked about it that when a credit is asked for a fax report, it cannot be satisfy through presentation of the data contend /information or advise what is faxed.
.
thats why i mentioned this ICC official opinion, if irrelevant then forget it.
REgards
nesar

[ajoy]

Ref R 203:

R 203 deals with following :
LC asked for

'Beneficiary's certified copy of fax/telex dispatched to the accountees within 24 hours after shipment advising name of the vessel, date, quantity, weight and value of shipment ...'

Bene Submitted :
A beneficiary's certificate , stating as follows: 'We hereby certify that we have sent full set of non-negotiable shipping documents directly to (applicant's name) by courier service and fax within 24 hours after shipment.'

Ref R 203 ..LC did not ask for a fax report.....
Here bene submitted a certificate instead of a certified copy ofthe fax....hence the technical discrepancy. ( Personally I think it shows a frivolous discreancy pointed out by the Issuing bank ( both documents are evidence for the same task i.e the fax was indeed sent...and I donot think it would make any material difference.) OR there is an underlying dispute and the technicality is being exploited to stall payment).

This is different from the current situaion:

I understand the situation give by Idt now as below:

LC asked for a Fax report with no specification as to details.

UCP does not define a fax report. Google it and you cant find the defination of a fax report... so whatever the bene submits as long as it is titled Fax report and gives info on the fax sent should be enough. Alternatively a one line fax report generated by teh fax machine is fine too whether or not such report shows the fax number is moot.

I know that this argument is also based on playing around with technicality but if IB is doing that as NB I would do the same - Tit for TAT.

Cheers...

( PS : Only Idt can tell us what exactly was asked for and what was sbmitted by Bene... I think initialy it was about a fax advise not having applicant's fax number. Then it was about a Fax report not having the fax number.)

[ldt5205]

Just as you guess,initialy it was about a fax advise not having applicant's fax number while lc REQUIRES SHIPMENT ADVICE SHOULD BE FAXED TO APPLICANT(AT FAX NO.***).
We have different opinions whether this is non-documentary or not.
Someone thought there is a fax advise related to the fax no,so it is documentary.The fax no SHOULD BE SHOWN.
Someone thought there is no requiement for a document to certify that SHIPMENT ADVICE having been FAXED TO APPLICANT(AT FAX NO.***)and the fax no is not a nesessity for the advice.There is no discrepancy.
The question about a Fax report not having the fax number is my further question.
Thanks to ALL OF YOU.

[ajoy]

Hi

Thanks for your response.

I take it that the initial question was from a real/live situation

How did you finaly resolve the issue?

The further question I understand was a hypothetical one based but related to the first one of course.

Cheers

Ajoy

[iLC]

well, there has been a considerable discussion already as it appears. i think we should consider ICC opinion R444 here

The requirement in the credit was for a certificate indicating that two sets of non-negotiable documents were couriered to the applicant within two days after shipment. From the discrepancy listing it would seem that this was complied with. Additional information, it would seem, was added to the document which included an incorrect fax number. Whilst Article 21 makes reference to documents being accepted as presented provided that their data content is not inconsistent with any other stipulated document, this would not extend to the addition of an incorrect fax number. The addition of the fax number was not required by the L/C and its inclusion, whether correct or incorrect, neither added to or detracted from the statement made within the body of the document, as was required by the credit. There is no discrepancy.