A very interesting case

[cristiand969]

Dear all,
I have an interesting debate here regarding a situation which I have naver come accross so far.
A letter of credit issued specified among docs required the following 2:
1. Certificate of quality issued by SGS showing density at 15 deg C
2. Certificate of quantity issued by SGS showing qty in vaccum
.
Here it is how the documents like and the main debate:
1. Certificate of quality presented issued by SGS showing density at 15 deg C as '0.15'.
(also it is mentioned that : Analysys performed at SGS laboratory ... )
.
2. Certificate of quantity presented issued by same SGS showing quantity accordingly but additionaly mentionL: density at 15 deg C *: 0.17.
(and for the asterisc * is the note: ' Density was applied as per ABC laboratory.
.
Now the debate is whether or not conflictual data exists between the 2 documents as far as density is concerned.
- one group says there is conflicting data regarding density for goods shipped (0.15 vs 0.17)
- other group claims there is no conflictual data on the basis that the 2 densities are based on the analysis of different laboratories which indeed , subject to their specific measurements, equipments (even it follows same international standard) may have different results.
(All docs related to the same goods by quantity so there is no
.
I would much appreciate sharing here your opinions.

[nesarul]

Dear,
You didn't mentioned the actual goods that transacted for this credit.
however,
showing two different density might be come from two different laboratory because of examination can be taken in different time, two different laboratory and possibly in two different humidity. moreover different density might be come because of different combination of re- agent used to determine the density and so on.
From my point of view, as long as the variation of density doesn't hamper commercial viability, i will consider it as an additional information disregards ABC laboratory result. otherwise we have sub article 14(d)......
.
i know my comment is self contradictory but i believe its sound logical.
I know my explanation deals a bit with goods but i believe its expedite international trade.
other comment appreciated.
regards
nesar

[picant]

This post appeared on Trade Tutor Forum of Mantissa-London, a very interesting Forum, today silent, I think it can help to understand the new way of checking documents. Unfortunately many banks or, better, many documents checkers are using UCP 290 mentality instead of UCP 600.(to the present post were 3 / 4 comments too):


Document checkers will be familiar with the requirement that data within documents must be checked
not only against the credit but also against the other documents in the presentation.

The rule for checking documents against each other is now contained within UCP 600 sub-article 14d:

Data within a document, when read in context with the credit, the document itself
and international standard banking practice, need not be identical to, but must not conflict
with, data in that document, any other stipulated document or the credit

At a recent ICC UK seminar held in London, John Turnbull (Sumitomo Mitsui Bank), a member of the UCP
Consulting Group on the UCP revision, expressed some disappointment about this formulation; he said
there was a widespread view that it left too much room for interpretation and judgement as to
which linkages within the documents needed to be checked.

Another speaker at the workshop, Andrew Duncan of ED&F Man Sugar, gave the following real example
of how the mechanical application of such a principle can give rise to spurious discrepancies.

L/C calls for documents showing product has "minimum polarisation of 99.80 degrees".

Presented documents include:

Analysis certificate showing polarisation of 99.84 degrees
Supervision certificate showing polarisation of 99.83 degrees

Both documents comply with the credit, but there is an apparent conflict between their data.

The business reality is that for all soft commodities and many hard ones, analytical reports such as these
are essential elements of the documentation, and that sometimes results are reported to three or
four decimal places. So minor variations in the figures are the rule rather than the exception.

This raises the old question of how much document checkers are supposed to know about the various businesses
their customers engage in, and to what extent they should apply this knowledge when determining compliance

Unquote
Other comments appreciated
Ciao

[shahriar]

Hey dear picant,

nice post . to answer the question i asked the following to myself -

LC asks for health certificate from SGS showing goods are fit for human consumption and it was presented accordingly. if there is a additional certificate from ABC showing goods are not fit from human consumption, then? surely we will disregard ABC's as additional document.

then why not disregard ABC Laboratory as additional information? i think there is no discrepancy.

[nesarul]

Dear,
from my point of view,taking a firm position in subject captioned case is not logical. This information should be consider on commercial viability basis. if density of it as stipulated on two test result 15-17, doesn't hamper the commercial viability [price of product], we should consider it as an additional information and therefore disregard it. otherwise we have sub article 14(d).

.
i know my comment is self contradictory but i believe its sound logical.
I know my explanation deals a bit with goods but i believe its expedite international trade.
other comment appreciated.
regards
nesar

[picant]

Hi Shahriar,

I read something about your case. I have to find it, it will take few days, I promise.

Ciao