Comments on ICC Document 470/TA.621

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24 July 2007

To: The Chair and Members
Canadian Working Party (CWP) on the
ICC Commission on Banking Technique and Practice

Dear All,
From the final opinion in ICC Document 470/TA.621, it reflects that the group of experts appears to be confused on the nature of master AWB (MAWB) and house AWB (HAWB).
A MAWB is one issued by the actual carrier who provides the aircraft to transport he goods. The actual carrier is responsible to the shipper and consignee, being bound by the IATA rules and other international conventions as well as the related protocols on transport of goods by air.
The HAWB is issued by a forwarder against the MAWB. So it is not necessarily a transport document bound by IATA (unless it is an IATA member), international conventions and protocols. In case of claims, some SME forwarders may be too small to meet the big claims. It is like a non-bank L/C opened by an SME.
Having said that FIATA forwarders like Schenkers, Crown Pacific, Penalpinar, etc are big forwarders and are as good as the actual carriers. So merely by the term forwarder, it does not tell us anything. However, a FIATA forwarder is more reliable.
The intent of the issuing bank that provides the finance and the applicant is to get a decent AWB, the MAWB and a FAWB is not good enough for security and peace-of-mind purpose. This is similar to the situation of a liner bill of lading vs. a forwarder's cargo receipt.
Now in the query, the DC specifically requires a MAWB but a HAWB is presented. The specific provisions of the DC should override the UCP 500 provisions. Then how come the ICC Banking Commission would accept a HAWB? This is not consistent with other ICC opinions that state a specific clause in a DC will override equivalent provisions in the UCP, as stipulated in article 1 of UCP 500 and UCP 600.
Bankers like Don Smith are very concerned about this MAWB problems and there were heated arguments in the Singapore ICC Banking Commission meeting. Now their voices are ignored.
It appears that this time ICC Banking Commission makes an unilateral decision without referring to ICC Transport Commission for their opinions.
This is a very serious case that will have immense effect on international trade and we, as member of ICC Canada, should show our concern to ICC headquarters.
Best regards,
T. O.

This document is the 1st batch of T.O. Lee's comments on ICC Document 470/TA.621.

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