Latest draft of the UCP 600

A Letter on Latest Draft of the UCP 600

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April 2006

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

Dear Sirs,

Latest draft of the UCP 600

FIATA remains concerned with several items that the current draft has failed to address. We have raised these issues in the past and are doing so again in the hope that they will be given some consideration.

First and foremost is the elimination of article 30 and in essence the facility thereunder for banks to readily accept transport documents issued by freight forwarders. In this regard we would like to make two suggestions.

Firstly, we noted with interest the recent article in the DCInsight publication April-June 2006 and Mr. Ole Malmqvist's comments concerning this very issue. He commented and we quote “this point is much better understood nowadays than it used to be. Accordingly the current UCP revision process provides a good opportunity to delete article 30 which is no longer needed.” While this may well be the case in developed areas of the world, we as practitioners have found that changes such as this have taken years to find roots in less developed areas of the world. In fact, this can even be true in the developed areas of the world where the issue of “clean on board bills of lading” was struggled with for years. FIATA's concern is that the FIATA bill of lading, a document which is in such wide international use and is synonymous with a forwarder's transport document, will encounter difficulties with negotiating banks in that they no longer see a facility in UCP 600 to accept such a document.

In consequence, we would like to propose that article 19 which currently reads under line 525 “a bill of lading, however named, covering a port to port shipment must appear to”: be amended to read “a bill of lading (including those issued by forwarders in their capacity as carriers, however named, etc.”. If this is not an acceptable option, we think that it is imperative that any new publications concerning the new UCP 600 and its comparison to the old UCP 500 (as was done in the case of the 400 to 500 ICC publication No. 511) clearly make reference to this change and the reason for which article 30 was eliminated and stress the fact that under the conditions of article 19 being fulfilled by the forwarders transport document that it would be acceptable.

The second issue is that of the wording in article 19 concerning transshipment, paragraph B lines 579, 580, and 581. In this regard we were pleased to see that our original suggestion garnered some support from Mr. T.O. Lee. We proposed a relatively simple and minor adjustment in the wording to resolve a problem that exists with the current wording. The addition of another item in this article which could be item e. to read “where transshipment is permitted in accordance with c. and d. of this article, the bill of lading evidencing a place of delivery which is the same as the port of discharge stipulated in the credit will be acceptable even if the port of discharge indicated thereon is different from that stipulated in the credit”.

We are also in agreement with Mr. T.O. Lee's latest comments concerning article 20, lines 646 through 647 and his suggestion that “or, if issued in more than one original, be the full set as indicated on the non-negotiable sea waybill” be replaced by “the number presented will be deemed to constitute a full set”. Here again comments concerning such an amendment should stress the fact that a sea waybill is not issued in an “original” version as all of the copies are in fact non-negotiable.

We hope that given the support of Mr. Lee concerning these last two issues and given our experience as practitioners with regard to the potential hurdles the elimination of article 30 presents us with, steps will be taken to consider our concerns and undertake the suggestion we have proposed herein.

We thank you in advance for giving serious consideration to these issues and for including them in your comments to the International Chamber of Commerce in Paris, France.

Yours sincerely,

Chris Gillespie
Chairman of FIATA

(905) 237-6465

(905) 237-6867