5 Concerns about UCP 600

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30 October 2006

Cc: Members of the Consulting Group
UCP 500 Revision
ICC Banking Commission
Paris

Dear Ron and Bill,
In response to your call for comments to UCP 600 articles, as I have already mentioned in the Consulting Group meeting in Paris on 24th October 2006, I passed the UCP 600 with the following reservations, which are also my concerns:

Sub-article 19 (a) should not ask for "covering at least two different modes of transport" because in UNCTAD/ICC Rules for Multimodal Transport Documents, ICC Publication No. 481, Article 1 (Applicability) in "Explanation of the Rules" section says that one mode may also be subject to multimodal transport to offer maximum flexibility to the MTO or carrier if you will.
"Intermodal transport" should be included in article 19 as this term is popular in USA.
Sub-article 21 (a) (iv) should not ask for "full set of original sea waybills (SWB) when SWBs are issued in more than one original" because according to FIATA, some SWBs are not issued with any signature at all to make them originals. There is no need to present an original SWB in claiming the goods. Showing identity of the consignee is good enough. Third, SWB is not a title document that may be used as a collateral for the financing bank. So what is the purpose in asking for full set of originals? We should use common sense.
Sub-article 22 (a) (iii) should have included "the range of ports of loading or geographical area" to match the commodity trading practice even some 30 years ago when I was doing the log business to collect logs from Indonesian and Malaysian ports for unloading in Taiwan, Japan and Korea ports of discharge. What was compliant in UCP 290 or UCP 400 would not be complaint in UCP 600. This appears odd.
Sub-article 28 (e) should not look to the issuing date of an insurance document to determine its effective date, which is in fact based on the occurrence of an event, the commencement of transport, as stated in Institute Cargo Clause (A), (B) or (C) under clause 8.1 in the Transit clause within the Duration Clause. Bankers should not build their convenience in examination of documents by breaking the backbone doctrine of the cargo insurance industry. UCP 600 is not for bankers alone. It is also for exporters, importers, carriers, insurers and other parties.
In fact the above comments are not new. They were unfortunately ignored by our Chairman in his presentation to the representatives of the National Committee in the ICC meetings and I have reasons to believe that they are also being ignored in his report to the Drafting Group. So I hope that they would not be ignored again this time. Since the UCP 600 cannot be changed now, perhaps it is helpful to the users of UCP 600 in providing some explanation about these issues in the ISBP 681.
Best regards,
T.O.

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