Comments to UCP Revision - Complete Draft March 2006

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4 April 2006

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

Dear Members of the CWP,
Below are my comments to UCP Revision Complete Draft Mar06 for discussion in the CWP meeting on 13 April.

Line Numbers Comments

14
Add "or another bank acting on its behalf" after "bank".

Reasons: It is the first advising bank, not the issuing bank, that requests the second advising bank to advise the credit.

51
Replace "as" with "so".

Reasons: For clarity.

47 - 48
Please clarify whether or not the nominated bank includes the transferring bank, the assigning bank, etc that may or may not have the duty to honour or negotiate but they do have other duties as requested by the issuing bank. Please bear in mind that the definition of the nominated bank in UCP 500 sub-article 10 (b) (i) includes only the paying, deferred paying, accepting and negotiating bank but NOT the confirming bank.

51
Add ", confirming bank" after "issuing bank".

Reasons: It is unclear, from the definition of the "nominated bank" and "presentation" in UCP 600 article 2, whether the nominated bank includes the confirming bank or not. Please bear in mind that the definition of the nominated bank in UCP 500 sub-article 10 (b) (i) does NOT include the confirming bank.

77
Replace "any issuer" with "any party".

Reasons: "Any party... to issue" is better than "any issuer...to issue".

91
"From" should be deleted.

Reasons: "Maturity as from 1st May 2006" means 1st May 2006 is included, according to Chinese interpretations, not to be excluded as in the new provisions.

165
Add "for deferred payment credit" after "pay at maturity".

Reasons: For clarity.

244
Replace "that the advice" with "that its advice".

Reasons: To distinguish between the "first advice" sent by the first advising bank and the "second advice" sent by the second advising bank, now both called "advice" in this sub-article, causing confusions.

311
Replace "issue" with "issuing" or "issuance of".

Reasons: To comply with grammatical rules, a gerund or noun should be used after the preposition "to".

323
Replace "prepay" with "advance".

Reasons: "advance" is more appropriate to indicate "financing".

369
Add ", a confirming bank" after "An issuing bank".

Reasons: A confirming bank also needs to determine compliance, particularly if the nominated bank does not include a confirming bank.

418 - 419
Delete "within the same country".

Reasons: The addresses of an applicant and a beneficiary are either important or unimportant, regardless of the countries they are domiciled. I think this sub-article does not work in Austria and Czechoslovakia.

542, 583 & 590
Replace "goods" with "cargoes".

Reasons: In a sales contract or invoice, the goods are "goods" but in transport and insurance documents, the goods are "cargoes", for example, air cargo, hazardous cargoes, cargo insurance etc.

580
Add "sea" before "carriage".

Reasons: A cargo plane can also fly from the port of loading to the port of discharge, for example from New York to Hong Kong.

618, 661 & 668
Replace "goods" with "cargoes".

Reasons: In a sales contract or invoice, the goods are "goods" but in transport and insurance documents, the goods are "cargoes", for example, air cargo, hazardous cargoes, cargo insurance etc.

646 - 647
Delete "or, if issued in more than one original, be the full set as indicated on the non-negotiable sea waybill". I would suggest to follow the provisions of UCP 600 article 24 (b) that states "the number presented will be deemed to constitute a full set" to make this sub-article consistent with the maritime trade practice, as already explained by the Chairman of FIATA in their previous responses.

Reasons: Unlike a bill of lading, a sea waybill is not a title document and hence the consignee can claim delivery from the carrier without production of the sea waybill, whether original or not. Thus there is no need to call for the full set of sea waybills and such provisions are not consistent with the maritime transport practice.

657
Add "sea" before "carriage".

Reasons: To achieve clarity. A cargo plane can also fly from the port of loading to the port of discharge, for example from New York to Hong Kong.

709
Add "port of loading and" before "The port of discharge",

Reasons: When I was in my thirties, I was engaged in timber and logs trade. Supplies of timber and cut logs, like other agricultural produces, are heavily dependent on weather conditions. Heavy rains and drafts may reduce production. To play safe, I often nominated three or more ports of loading to ensure that the chartered vessel could be loaded with a "full and complete cargo" for profitability. I might also nominate three or more ports of discharge, as at the time of loading, the sales were not yet concluded due to price fluctuations of commodity goods. This chartering practice has been reflected in UCP 500 sub-article 40 (b) and should be retained in the UCP 600.

845
Add "and the carrier deemed to be identified" after "the carrier".

Reasons: A signature of a carrier does not mean identification of that carrier. There is a need to close the loophole left by the phrase "If a rail transport document does not identify the carrier..." in line 843.

847
Replace "goods" with "cargoes".

Reasons: In a sales contract or invoice, the goods are "goods" but in transport and insurance documents, the goods are "cargoes", for example, air cargo, hazardous cargoes, cargo insurance etc.

865 - 866
Replace "different" with "same".

Reasons: Transhipment can only be done within the same mode of transport. Otherwise it is multimodal transport. UCP 600 sub-article 24 (d) states "...in different modes of transport" whereas sub article 24 (e) states "within the same mode of transport" in lines 871 and 872. They are not consistent.

891 & 898
"Goods" to be replaced by "cargoes".

The transport term "cargoes" should be used in transport documents.

Best regards,
T. O.

(416) 298-5881

(416) 292-5535

Line Numbers	Comments
14	Add "or another bank acting on its behalf" after "bank". Reasons: It is the first advising bank, not the issuing bank, that requests the second advising bank to advise the credit.
51	Replace "as" with "so". Reasons: For clarity.
47 - 48	Please clarify whether or not the nominated bank includes the transferring bank, the assigning bank, etc that may or may not have the duty to honour or negotiate but they do have other duties as requested by the issuing bank. Please bear in mind that the definition of the nominated bank in UCP 500 sub-article 10 (b) (i) includes only the paying, deferred paying, accepting and negotiating bank but NOT the confirming bank.
51	Add ", confirming bank" after "issuing bank". Reasons: It is unclear, from the definition of the "nominated bank" and "presentation" in UCP 600 article 2, whether the nominated bank includes the confirming bank or not. Please bear in mind that the definition of the nominated bank in UCP 500 sub-article 10 (b) (i) does NOT include the confirming bank.
77	Replace "any issuer" with "any party". Reasons: "Any party... to issue" is better than "any issuer...to issue".
91	"From" should be deleted. Reasons: "Maturity as from 1st May 2006" means 1st May 2006 is included, according to Chinese interpretations, not to be excluded as in the new provisions.
165	Add "for deferred payment credit" after "pay at maturity". Reasons: For clarity.
244	Replace "that the advice" with "that its advice". Reasons: To distinguish between the "first advice" sent by the first advising bank and the "second advice" sent by the second advising bank, now both called "advice" in this sub-article, causing confusions.
311	Replace "issue" with "issuing" or "issuance of". Reasons: To comply with grammatical rules, a gerund or noun should be used after the preposition "to".
323	Replace "prepay" with "advance". Reasons: "advance" is more appropriate to indicate "financing".
369	Add ", a confirming bank" after "An issuing bank". Reasons: A confirming bank also needs to determine compliance, particularly if the nominated bank does not include a confirming bank.
418 - 419	Delete "within the same country". Reasons: The addresses of an applicant and a beneficiary are either important or unimportant, regardless of the countries they are domiciled. I think this sub-article does not work in Austria and Czechoslovakia.
542, 583 & 590	Replace "goods" with "cargoes". Reasons: In a sales contract or invoice, the goods are "goods" but in transport and insurance documents, the goods are "cargoes", for example, air cargo, hazardous cargoes, cargo insurance etc.
580	Add "sea" before "carriage". Reasons: A cargo plane can also fly from the port of loading to the port of discharge, for example from New York to Hong Kong.
618, 661 & 668	Replace "goods" with "cargoes". Reasons: In a sales contract or invoice, the goods are "goods" but in transport and insurance documents, the goods are "cargoes", for example, air cargo, hazardous cargoes, cargo insurance etc.
646 - 647	Delete "or, if issued in more than one original, be the full set as indicated on the non-negotiable sea waybill". I would suggest to follow the provisions of UCP 600 article 24 (b) that states "the number presented will be deemed to constitute a full set" to make this sub-article consistent with the maritime trade practice, as already explained by the Chairman of FIATA in their previous responses. Reasons: Unlike a bill of lading, a sea waybill is not a title document and hence the consignee can claim delivery from the carrier without production of the sea waybill, whether original or not. Thus there is no need to call for the full set of sea waybills and such provisions are not consistent with the maritime transport practice.
657	Add "sea" before "carriage". Reasons: To achieve clarity. A cargo plane can also fly from the port of loading to the port of discharge, for example from New York to Hong Kong.
709	Add "port of loading and" before "The port of discharge", Reasons: When I was in my thirties, I was engaged in timber and logs trade. Supplies of timber and cut logs, like other agricultural produces, are heavily dependent on weather conditions. Heavy rains and drafts may reduce production. To play safe, I often nominated three or more ports of loading to ensure that the chartered vessel could be loaded with a "full and complete cargo" for profitability. I might also nominate three or more ports of discharge, as at the time of loading, the sales were not yet concluded due to price fluctuations of commodity goods. This chartering practice has been reflected in UCP 500 sub-article 40 (b) and should be retained in the UCP 600.
845	Add "and the carrier deemed to be identified" after "the carrier". Reasons: A signature of a carrier does not mean identification of that carrier. There is a need to close the loophole left by the phrase "If a rail transport document does not identify the carrier..." in line 843.
847	Replace "goods" with "cargoes". Reasons: In a sales contract or invoice, the goods are "goods" but in transport and insurance documents, the goods are "cargoes", for example, air cargo, hazardous cargoes, cargo insurance etc.
865 - 866	Replace "different" with "same". Reasons: Transhipment can only be done within the same mode of transport. Otherwise it is multimodal transport. UCP 600 sub-article 24 (d) states "...in different modes of transport" whereas sub article 24 (e) states "within the same mode of transport" in lines 871 and 872. They are not consistent.
891 & 898	"Goods" to be replaced by "cargoes". The transport term "cargoes" should be used in transport documents.