How to Interpret "and/or documents" in art. 2 of UCP 600 in Definition of Negotiation

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Question from O.F.:
Dear sirs,
In R398,the ICC banking commission gives its analysis and conclusion to read: "In most jurisdictions, a bank which advances funds under a usance credit "discounts" when the bill of exchange has been drawn on the nominated bank and "negotiates" when the bill of exchange has been drawn on another party."
However, I couldn't agree to it. Discounting can be made even if the draft is drawn on another bank. The negotiability of a draft makes it be discounted by any other bank to give finance. I think the major difference between "discount" and "negotiation" lies in whether the bank purchases the documents. Discount is a kind of financing for usance draft only without purchasing of documents. But negotiation will do.
I wish to get your comments to it.
Many thanks.

1st Response from T.O. Lee:

Dear All,
I have observed that the ICC Banking Commission opinions were almost always right during the Bernard Wheble and Charles del Busto periods, but not necessarily thereafter.
Why? Mr. Wheble made consultation to my friend Mr. John Richardson of P&O who told me this secret in his email and Mr. del Busto sometimes referred such issues to a man you should know whom. That is the reason why their opinions were always right.
After these good old days, I see a lot of ICC opinions being reversed in about three year time after my articles disagreeing with them being published in L/C media, particularly about transport and cargo insurance. For example, the insurance amount need not be accurate to two places after decimal; the insured amount can be more than 110%, the name of the master need not be given when the agent signs for the master in a bill of lading, that has been reflected in UCP 600 transport articles now. I cannot win the battle so far in that the effective date of an insurance document should not be based on its issuing date.
Having setting the scene, I wish to go for the arguments about discounting and negotiation. The ICC opinion about these two terms are made on the condition that there are drafts or bills of exchange involved. For deferred payment undertaking (DPU) they may not hold because there is no draft or bill of exchange involved.
In that case, can we discount? According to the new definition from the enquirer, this is not possible.
So I hope the enquirer would re-think a new definition in DPU to cope with the "no draft" situation about discount.
Then what about "purchase"?
Other than those mentioned above, I do not find any other authoritative definitions for the terms "discounting", "negotiation" and "purchase".
So this should be the job of the United Nations international trade experts to create clear and precise UN grade definitions for these terms, if this were possible.
The difficulty that I can foresee is that the new definitions have to work in both Civil Law and Common Law system and maybe also in Muslim banking system in which profits must be earned by hard work, not by sitting there doing nothing to enjoy interest. This may be another barrier as some of the key concepts in these two laws are quite different although the two laws are trying to merge somehow as time goes by.
Even that is done, what about the issue of recourse?
We may have "with or without recourse" options for "discounting", "negotiation" and "purchase".
Broadly speaking, they are all under the umbrella of trade financing.
As I always say: "The more you know, the more you don't know". And that is good for us.
Best regards,
T. O.

2nd Response from T.O. Lee:

Dear all,
I understand that the definition for "Negotiation" in article 2 of UCP 600 may include "documents alone" (no bill of exchange) situation.
However, due to use of the wording "and/or documents", involving a virgule, that is discouraged in ISBP 681, paragraph 7, the meaning is not absolutely clear whether it means "or" , "and", or "or and and" regarding documents?
ICC uses the virgule in UCP 600 article 2 where in ISBP 681, paragraph 7, such use is discouraged.
That is also one of the reasons why the definition of negotiation in UCP 600 has problems in interpretation.
Best regards,
T. O.

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