Health Certificate

[akomolpa]

Dear all,

Could you please comment regarding :

LC calls for
" - Copy of Health Certificate.
- Beneficiary's certificate certifying that one set of non-negotiable shipping documents including Original Certificate of Health issued by Government in which stating number of piece, net and gross weight and description of products have been sent direct by courier services to Applicant..........."

Documents presented :
- Copy of Health Certificate not mentioned " Net weight".
- Beneficiary's cert. as per LC conditions.

Issuing Bank refuse to pay for the reason that Copy of Health Cert. not mentioned "net weight".
But Negotiating Bank disagree with them . They Certify that documents are in compliance and they treat Copy of Health Cert. and and Original Certificate of Health issued by Government as two separate documents and check the copy of Health cert. refer to UCP600 Art.14F.

Do you agree with Negotiating Bank?

[ajoy]

LC calls for
" - Copy of Health Certificate.
- Beneficiary's certificate certifying that one set of non-negotiable shipping documents including Original Certificate of Health issued by Government in which stating number of piece, net and gross weight and description of products have been sent direct by courier services to Applicant..........."

IB seem to be right ( although petty) and can argue it as below:

1) If the original health certificate does not mention 'net weight' then the Bene 's certificate is factually incorrect or misrepresentation of fact...

2) Linkage is of course another

You could dispute point 2 above but cant really dispute point 1 in a court....

Issuing a cert with factually incorrect information is a fraud.....


BTW Is the NB really arguing that the copy of health certificate asked for in the LC is not necessarily a copy of the same Original health certificate which was sent alongwith the set of non negotiable docs sent directly to applicant.. in which case it has some argumment - but honestly that is a very stretched argument.

I dont think that there are two different health certificates here and a cursory look at the copy should prove it in any court of law in which case bene will be in big trouble even if NB is off the hook.

To be honest though I dont think this discrepancy is going to remain a major issue and that IB will accept this discrepancy eventually.

Do let us know how this ends?

Cheers

Ajoy

[akomolpa]

Finally Applicant accepted the discrepancy , then the IB pay for the bills.
akomolpa

[picant]

Hi Pals,

Does the copy of certificate of health show the the issuer as the Government or not?

Let me know.

Ciao

[cristiand969]

IB seem to be right ( although petty) and can argue it as below:

Article 14 F of UCP 600 states:
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).
My comment: net weight does not convey fulfilling document function, it is for the data content regarding the quality of goods health or not
.
The fact that there is a preprinted box mentioning net weight (if any) does not necesarily mean it should be completed unless the credit instructs so.

[ajoy]

There are two docs asked for :

1) Copy of health certificate

& 2 ) A bene cert stating that a set of non nego docs including ... an original health certificate showing net weight ... etc was sent to the applicant 2 days after shipment or words to teh effect.

It seems the bene has submitted a copy of teh certificate which does not show net weight
BUT has also submitted a bene cert as in 2 where he is certifying that the health cert shows net weight...

So I would say that

a) the bene cert gives false info

( By effectively certifying that the health cert from govt gives info on net weight when it doesnot. Of course this would have been unintentional. Most likely bene did not realize that he was giving a false certification.)

and b) you could have linkage here between the two docs - bene cert and copy of health cert - so that the health certificate must show net weight...

Personaly, I think there is a linkage here. You cannot have the bene certificate issued correctly if the original health cert doesnot show net weight and other details bene must certify.

Moreover, as I said in my earlier post you could argue that there is no linkage implication here but then by implication you would be accepting that the bene cert is giveing false information....

So if not on two then on one count the docs are not acceptable...

PS: I also said that despite all this I dont think this is a major problem and applicant should be expected to accept these docs unless the transaction is in trouble for other reasons.

This is how I interpreted the case... Comments welcome.

Cheers...

Ajoy

[cristiand969]

Sorry for not reading carefully the original inquiry. It seems to be a discrepancy at first sight although the credit is badly worded : A condition for a named document is stated in another document????? This should be considered unappropriate and in most cases can lead to disputes.
+One of the dispute that can be on the spot is that two types of Health Certificate could have been created:
- one issued by Goverment authority as per second document and another one issued by local authorities (which may in some case to consist the basis for issuance of that given by the government. There is no condition that a photocopy of original to be presented.
Another dispute is when assuming however is the same document: You do not know whether on the original document the beneficiary completed after its issuance the net weight, and you are not required to link a document which is not required nor seen with that presented even if copy of them is required. Remember that a copy of B/L in most case do not bear conditions of carriage on the back, the named agent and the carrier (in case on original document issuer stamp indicate ' XXX as agent of the carrier YYY ). And I reapeat for this situation as well: There is no requirement for a photocopy of original document. How you would respond to the presenter in this case?
I personally should have contacted the IB for a clear wording.

[ajoy]

Sorry for not reading carefully the original inquiry. It seems to be a discrepancy at first sight although the credit is badly worded : A condition for a named document is stated in another document????? This should be considered unappropriate and in most cases can lead to disputes.
+One of the dispute that can be on the spot is that two types of Health Certificate could have been created:
- one issued by Goverment authority as per second document and another one issued by local authorities (which may in some case to consist the basis for issuance of that given by the government. There is no condition that a photocopy of original to be presented.
Another dispute is when assuming however is the same document: You do not know whether on the original document the beneficiary completed after its issuance the net weight, and you are not required to link a document which is not required nor seen with that presented even if copy of them is required. Remember that a copy of B/L in most case do not bear conditions of carriage on the back, the named agent and the carrier (in case on original document issuer stamp indicate ' XXX as agent of the carrier YYY ). And I reapeat for this situation as well: There is no requirement for a photocopy of original document. How you would respond to the presenter in this case?
I personally should have contacted the IB for a clear wording.

I do agree that LC is very badly worded and the IB should have been contacted for a clearer wording.

Although I did say that the possibilty of two health certificates is very much there in which case my argument sort of falls apart I did overlook the possibility as you explain it. However, I do think that if 2 different health certs were issued the NB could have mentioned the issuer of the (copy of ) health cert submitted and positioned thier argument for no discrepancy accordingly . Thier counterargument in that sense was not complete which makes me doubt if copy health cert was different from the one sent with the non nego set of docs directly to applicant.

Once no clarfication was sought upfront there is in my opinion no other go for the NB but to check if the copy of health cert submitted for nego was different from the cert sent alongwith the non nego set of docs and judge discrepancy accordingly.

Logically I do agree that when the health cert was issued net weight might not have been known. In fact the gov might not be in the practice of putting net wt on health cert at all. I guess ultimately the IB and advising bank should be more careful with the wording /requirements in the LC as professionals. If they just cut and paste from the LC application or do not bother to ask for a clarification /rewording the banks are just giving bad service .

As for linkage I guess this is a unique situation. Commonsense to me would be to link the docs as long as you know they are are the same. I dont think the applicant was asking for two different health certificates and that the bene would send one cert with the non nego documnets and submit copy of another altogether differnt cert for nego. I did say that linkage was disputable though and for the reason you have explained already.

Perhaps I should have been less emphatic and more detailed nay thoughtful in my initial response

But i guess if you word an LC like that you are opening so many possibilities . Thanks for opening up the possibilities.

Btw IB did accept the docs in this case so I guess common sense prevails again...

Cheers