UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION)
OF THE INTERNATIONAL CHAMBER OF COMMERCE
Content
Uniform Customs and Practice For Documentary Credits Foreword Page 1
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION) OF THE INTERNATIONAL CHAMBER OF COMMERCE
Page 9
Uniform Customs and Practice For Documentary Credits
Foreword
UCP 500 - Correcting some misinterpretations
The ICC Commission on Banking Technique and Practice notes with regret, and concern, that following the coming into effect of the "Uniform Customs and Practice for Documentary Credits” - UCP 500 - various banks have been applying unilateral and incorrect interpretations to certain of its Articles. By prejudicing the proper and correct application of the UCP 500 rules, the effect has been to seriously interfere with the use of the documentary letter of credit issued in accordance with the UCP, as the means for effective and secure settlement of trade transactions on a worldwide basis.
For the first time, this latest revision of the banking rules specifically included mention of certain long-standing and customary banking practices but, in some cases, their mention has been read, quite incorrectly, as indicating changes in practice. We of the Banking .Commission are greatly concerned that the misinterpretations and misapplications of the particular Articles of UCP 500 involved, adversely affect not only the banks along the transaction chain, but also their customers whether applicants or beneficiaries under the Credits and, at the same time, carriers and freight forwarders who may also be involved in ensuring the correctness of documentation to comply with the particular documentary letter of credit.
In these special circumstances, the Banking Commission has authorised the issuance of the attached 'Position Papers' to emphasise the need to correctly interpret.and apply UCP 500 sub-Article 9(d)(iii) – Amendments; sub-Article 10(b)(ii) - Negotiation; sub-Article 13(c) - Non-documentary conditions; and the related sub-Articles of Articles 23,24,25,26.27,28,29 and 30 - Transport Documents. Failure to interpret the sub-Articles as indicated, in future, should be seen as in violation of the principles of UCP 500.
Consequentty, the Banking Commission strongly urges that ICC National Committees, and associated organisations, distribute the Position Papers as widely as possible to help in ensuring the future smooth running of the documentary credit issued under the protection of UCP 500, which has been disturbed unnecessarily as indicated above. The point is, of course, made that the Position Papers do not amend the sub-Articles of UCP 500 in any way but merely indicate the correct interpretation of particular sub-Articles.
Charles del Busto.
Chairman. ICC Commission on Banking Technique and Practice
POSITION PAPER № 1
UCP 500 sub-Article 9(d)(iii)
Amendments
The Banking Commission strongly disagrees with the wrong practice adopted by:
a) certain Issuing Banks, of issuing irrevocable documentary credits, or amendments to irrevocable documentary credits, incorporating a provision to the effect that any amendment will become automatically effective unless formally rejected by the beneficiary within a specified period of time, or by a specified date:
b) certain Advising Banks of adding a provision of the nature set out in (a) above when advising an irrevocable documentary credit, or an amendment to an irrevocable documentary credit.
The essence of an irrevocable documentary credit is clearly set out in the sub-Article 9(d)(i) statement that;
an irrevocable credit can neither be amended nor cancelled without the agreement of the Issuing Bank, the Confirming Bank, if any, and the Beneficiary.
The practices referred to above are seen as changing the irrevocable nature of the documentary credit irrevocable undertaking.
Moreover, the presumption that a beneficiary’s silence amounts to his acceptance of an amendment is contrary to national law in many countries. Any attempt of the nature referred to above to over-rule sub-Article 9(d)(iii) may therefore lack legal effect.
Banks are wrong in assuming that sub-Article 9(d)(iii) involves a change of policy. It merely states the position which existed prior to the introduction of UCP 500, and indicates the alternative ways in which the beneficiary may choose to signify his acceptance and avail himself of an amendment to an irrevocable documentary credit which has been offered to him by the Issuing Bank and, where appropriate, by the Confirming Bank—or whereby he may indicate his rejection of such amendment.
POSITION PAPER № 2
UCP 500 sub-Article 10(b)(ii)
Negotiation:
The Banking Commission notes with regret that notwithstanding the clear definition contained in the above sub-Article, a number of banks fail to understand the meaning of the term 'negotiation' in connection with the availability of a documentary credit.
The term 'negotiation' is defined in sub-Article 10(b)(ii) as 'the giving of value for Draft(s) and/or document(s) by the bank authorised to negotiate’. The Banking Commission wishes to clarify that for the purposes of UCP 500, the phrase 'giving of value' in sub-Article 10(b)(ii) may be interpreted as either 'making immediate payment' (e.g. by cash, by cheque, by remittance through a Clearing System or by credit to an account) or 'undertaking an obligation to make payment' (other than giving a deferred payment undertaking or accepting a draft).
The view has also been expressed that where a documentary credit is stated to be available by 'negotiation', it is essential for the beneficiary to seek and/or secure 'negotiation' from the Nominated Bank if he wishes to avail himself of the documentary credit.
The Banking Commission disagrees with this view, which it emphasises is in conflict with both the provisions and Intent of sub-Articles 9(a)(iv) and (b)(iv) and 10(c), where the relative undertaking of the Issuing Bank and the Confirming Bank (if any), as well as the position , of the Nomihated bank, are clearly stated.
Failure by the beneficiary to seek and/or secure 'negotiation' from the Nominated Bank under a documentary credit which allows negotiation, does not affect the undertakings of the Issuing Bank and/or the Confirming Bank (if any), nor does it constitute non-compliance with the documentary credit terms, provided that conforming documents are presented by the beneficiary within the validity of the documentary credit and the sub-Article 43(a) period of time where appropriate, to a Nominated Bank or direct to the Confirming Bank (if any) or to the Issuing Bank.
POSITION PAPER № 3
UCP 500 sub-Article 13(c)
Non-documentary conditions
The provisions of this sub-Article have the specific purpose of eradicating the totally wrong practice of incorporating non-documentary conditions into documentary credits.
Such practice defeats the underlying principle of the documentary credit itself and directly contradicts the wording of Articles 2 – ‘Meaning of Credit': 4 - Documents v. Goods/Services/Performances; 5(b) – ‘Instructions to Issue/Amend Credits’; and 13(a) – ‘Standard for Examination of Documents’, all of which clearly indicate that payment, acceptance or negotiation under a documentary credit is to be effected against documents stipulated in the documentary credit.
The Banking Commission therefore expresses its strong disapproval of the fact that notwithstanding the provisions of sub-Article 13(c), certain banks continue to issue documentary credits and amendments thereto which contain a non-documentary condition(s).
Furthermore, it is evident that such wrong practice is causing severe problems to alI parties involved in documentary credit transactions.
The Banking Commission wishes to remind banks, therefore, that where a documentary credit or amend- ment thereto contains one or more conditions and does not state the document(s) to be presented to evidence compliance therewith, sub-Article 13(c) clearly provides that banks will deem such a condition(s) as not stated and will disregard it .(them).
Accordingly, banks will accept as a valid tender under the documentary credit stipulated documents which appear to be in accordance with all other terms and conditions of the documentary credit.
Sometimes, however, a condition appears in a documentary credit which can be clearly linked to a document stipulated in that documentary credit. Such a condition then deemed to be a non-documentary condition. For example, if a condition in the documentary credit states that the goods are to be of German origin and no Certificate of Origin is called for, the reference to ‘German origin’ would be deemed to be a non-documentary condition-and disregarded in accordance with UCP 500 sub-Article 13(c). If, however, the same documentary credit stipulated a Certificate of Origin, then there would not be a non-documentary condition as the Certificate of Origin would have to evidence the German origin. (See also ICC Publication n0 511, ‘UCP 500 and 400 Compared – page 42)
It should therefore be clear that banks should include any appropriate ‘condition(s)' in the detail of the document(s) stipulated, or state expressly the document which is to evidence compliance win a specific 'condition(s)'.
POSITION PAPER № 4
UCP 500 - Transport documents articles.
Article 23 Marine/Ocean bill of lading
Article 24 Non-negotiable sea waybill
In view of the controversy surrounding some individual interpretations of sub-paragraph (a)(i) of these Articles, the Banking Commission wishes to clarify the position by setting out requirements as under:
1. The name of the carrier must appear as such on the front of the document.
The expression ‘the front of the document’ means the side showing the details of the goods, vessel and voyage, and the expression ‘the back of the document' means the side showing the details of the contract of carriage.
NOTE - Sub-paragraph (a)(v) of these UCP Articles states that banks will not examine the contents of the terms and conditions of carriage.
Banks will therefore reject documents which fail to comply with the requirement set our in ‘1’ above, i.e. which fail to indicate the name of the carrier on the front of the document, even though the identify of the carrier may be indicated on the back of the document.
2. Where the document is signed by the carrier, it is not necessary for the word 'carrier' to appear again in the signature box when it has already been used on the front of the document to identify the party acting as carrier.
3. Where the document is signed by an agent for (or ‘on behalf of’) the carrier, the agent must be named and must indicate the principal for (or 'on behalf of’) whom he is signing, in one of the following ways:
(a) when the word 'carrier' has not been used on the front of the document to identify the party acting as carrier, e.g.
ABC Co. Ltd.
as agent for (or "on behaif of’)
XYZ Shipping, carrier
(signature)
(b)when the word 'carrrier' has been used on the front of the document to identify the party acting as carrier, either, e.g.
ABC Co. Ltd.
as agent for (or 'on behalf of’)
XYZ Shipping, carrier
(signature) or
АВС Со. Ltd.
as agent for (or 'on behalf of’)
XYZ Snipping
(signature) or
ABC Co. Ltd.
as agent for (or 'on behalf of’) the above
named carrier
(signature) or
ABC Co. Ltd. .
as agent for (or 'on behalf of’) the carrier
(signature).
4. It is not necessary for the name of the Master to be quoted when the document is signed by the Master. When the document is signed by an agent for (or ‘on behalf of’) the Master, the agent must be named and must quote the name of the Master for (or 'on behalf of’) whom he is signing, e.g.
ABC Co. Ltd.
as agent for (or ‘on behalf of’) John Doe, Master,
(signature)
Article 25 Charter party bill of lading
In respect of this Article there has not been found need for interpretative comment.
This is the type of document most likely to be signed by the Master, or for (or 'on behalf of’) the Master. The requirement '4' above in respect of Articles 23 and 24 also applies to Article 25.
Article 26 Multimodal transport document
The requirements detailed in respect of Articles 23 and 24 above also apply to Article 26, but it should be noted that.
Many major multimodal transport operators (MTOs) use a multi-purpose format document, titled, for example:
'Bill of Lading for Combined Transport Shipment or Port-to-Port Shipment’ or
Non-Negotiable Sea Waybill for Combined Transport Shipment or 'Port-to-Port Shipment'
A document issued with either title ataove is also acceptable under Article 26, provided that the data content on the front of the document satisfies the requirement in the documentary credit for multimodal transport and for a negotiable document or for a non-negotiable document as the case may be.
A multimodal transport document may possibly show the word 'carrier' and not the words ‘multimodal transport operator' - this is acceptable under the ‘carrier or multimodal transport operator' wording of Article 26.
Article 27 Air transport document
Article 28 Road, rail or inland waterway transport documents
Article 29 Courier and post receipts
In respect of these Articles there has not been found need for interpretative comment.
Article 30 Transport documents issued by freight forwarders
In addition to satisfying the requirements of Article 30 the transport document stipulated must, of course, also satisfy the requirements of Articles 23/28 according to the mode of carriage.
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION)
OF THE INTERNATIONAL CHAMBER OF COMMERCE
A. GENERAL PROVISIONS AND DEFINITIONS
Article 1 Application of UCP The Uniform Customs and Practice for Documentary Credmay be applicable, Standby Letter(s) of Credit) where they are incorporated its, 1993 Revision, ICC Publication No 500, shall apply to all Documentary Credits (including to the extent to which they into the text of the Credit. They are binding on all parties thereto, unless otherwise expressly stipulated in the Credit.
Article 2 Meaning of Credit
For the purposes of these Articles, the expressions "Documentary Credit(s)" and "Standby Letter(s) of Credit" (hereinafter referred to as "Credit(s)"), mean any arrangement, however named or described, whereby a bank (the "Issuing Bank") acting at the request and on the instructions of a customer (the "Applicant") or on its own behalf,
(i) is to make a payment to or to the order of a third party (the Beneficiary"), or is to accept and pay bills of exchange (Draft (s)) drawn by the Beneficiary, or
(ii) authorises another bank to effect such payment, or to accept and pay such bills of exchange (Draft (s)), or
(iii) authorises another bank to negotiate, against stipulated document(s), provided that the terms and conditions of the Credit are complied with.
For the purposes of these Articles, branches of a bank in different countries are considered another bank.
Article 3 Credits v. Contracts
(a) Credits, by their nature, are separate transactions from the sales or other contract(s) on which they may be based and banks are in no way concerned with or bound by such contract(s), even if any reference whatsoever to such contract(s) is included in the Credit. Consequently, the undertaking of a bank to pay, accept and pay Draft(s) or negotiate and/or to fulfil any other obligation under the Credit, is not subject to claims or defences by the Applicant resulting from his relationships with the Issuing Bank or the Beneficiary.
(b) A Beneficiary can in no case avail himself of the contractual relationships existing between the banks or between the Applicant and the Issuing Bank.
Article 4 Documents v. Goods/Services/Performances
In Credit operations all parties concerned deal with documents, and not with goods, services and/or other performances to which the documents may relate.
Article 5 Instructions to Issue/Amend Credits
(a) Instructions for the issuance of a Credit, the Credit itself, instructions for an amendment thereto, and the amendment itself, must be complete and precise.
In order to guard against confusion and misunderstanding, banks should discourage any attempt:
i. to include excessive detail in the Credit or in any amendment thereto;
* I.C.C. Uniform Customs and Practice for Documentary Credits—1993 Revision (I.C.C. Publication No. 500—ISBN 92-842-1155-7 (E)). Published in its official English version by the International Chamber of Commerce. Copyright © 1993, International Chamber of Commerce (I.C.C.), Paris. Available from I.C.C. Publishing SA, 38 Cours Albert ler, 75008, Paris, France, or from I.C.C. United Kingdom, 14/15 Belgrave Square, London SW1X 8PS.
(ii) to give instructions to issue, advise or confirm a Credit by reference to a Credit previously issued (similar Credit) where such previous Credit has been subject to accepted amendment(s), and/or unaccepted amendment(s).
(b) All instructions for the issuance of a Credit and the Credit itself and, where applicable, all instructions for an amendment thereto and the amendment itself, must state precisely the document (s) against which payment, acceptance or negotiation is to be made.
B. FORM AND NOTIFICATION OF CREDITS
Article 6 Revocable v. Irrevocable Credits
(a) A Credit may be either (i) revocable, or (ii) irrevocable.
(b) The Credit, therefore, should clearly indicate whether it is revocable or irrevocable.
(c) In the absence of such indication the Credit shall be deemed to be irrevocable.
Article 7 Advising Bank’s Liability
(a) A Credit may be advised to a Beneficiary through another bank (the "Advising Bank") without engagement on the part of the Advising Bank, but that bank, if it elects to advise the Credit, shall take reasonable care to check the apparent authenticity of the Credit which it advises. If the bank elects not to advise the Credit, it must so inform the Issuing Bank without delay.
(b) If the Advising Bank cannot establish such apparent authenticity it must inform, without delay, the bank from which the instructions appear to have been received that it has been unable to establish the authenticity of the Credit and if it elects nonetheless to advise the Credit it must inform the Beneficiary that it has not been able to establish the authenticity of the Credit.
Article 8 Revocation of a Credit
(a) A revocable Credit may be amended or cancelled by the Issuing Bank at any moment and without prior notice to the Beneficiary.
(b) However, the Issuing Bank must:
(i) reimburse another bank with which a revocable Credit has been made available for sight payment, acceptance or negotiaton—for any payment, acceptance or negotiation made by such bank—prior to receipt by it of notice of amendment or cancellation, against documents which appear on their face to be in compliance with the terms and conditions of the Credit;
(ii) reimburse another bank with which a revocable Credit has been made available for deferred payment, if such a bank has, prior to receipt by it of notice of amendment or cancellation, taken up documents which appear on their face to be in compliance with the terms and conditions of the Credit.
Article 9 Liability of Issuing and Confirming Banks
(a) An irrevocable Credit constitutes a definite undertaking of the Issuing Bank, provided that the stipulated documents are presented to the Nominated Bank or to the Issuing Bank and that the terms and conditions of the Credit are complied with:
(i) if the Credit provides for sight payment—to pay at sight;
(ii) if the Credit provides for deferred payment—to pay on the maturity date(s) determinable in accordance with the stipulations of the Credit;
(iii) if the Credit provides for acceptance:
(a) by the Issuing Bank—to accept Draft(s) drawn by the Beneficiary on the Issuing Bank and pay them at maturity, or
(b) by another drawee bank—to accept and pay at maturity Draft (s) drawn by the Beneficiary on the Issuing Bank in the event the drawee bank stipulated in the Credit does not accept Draft(s) drawn on it, or to pay Draft(s) accepted but not paid by such drawee bank at maturity;
(iv) if the Credit provides for negotiation—to pay without recourse to drawers and/or bona fide holders, Draft(s) drawn by the Beneficiary and/or document(s) presented under the Credit. A Credit should not be issued available by Draft(s) on the Applicant. If the Credit nevertheless calls for Draft(s) on the Applicant, banks will consider such Draft(s) as an additional document(s).
(b) A confirmation of an irrevocable Credit by another bank (the "Confirming Bank") upon the authorisation or request of the Issuing Bank, constitutes a definite undertaking of the Confirming Bank, in addition to that of the Issuing Bank, provided that the stipulated documents are presented to the Confirming Bank or to any other Nominated Bank and that the terms and conditions of the Credit are complied with:
(i) if the Credit provides for sight payment—to pay at sight;
(ii) if the Credit provides for deferred payment—to pay on the maturity date(s) determinable in accordance with the stipulations of the Credit;
(iii) if the Credit provides for acceptance:
(a) by the Confirming Bank—to accept Draft(s) drawn by the Beneficiary on the Confirming Bank and pay them at maturity, or
(b) by another drawee bank—to accept and pay at maturity Draft(s) drawn by the Beneficiary on the Confirming Bank, in the event the drawee bank stipulated in the Credit does not accept Draft(s) drawn on it, or to pay Draft(s) accepted but not paid by such drawee bank at maturity;
(iv) if the Credit provides for negotiation—to negotiate without recourse to drawers and/or bona fide holders, Draft(s) drawn by the Beneficiary and/or document(s) presented under the Credit. A Credit should not be issued available by Draft(s) on the Applicant. If the Credit nevertheless calls for Draft(s) on the Applicant, banks will consider such Draft (s) as an additional document(s).
(c) (i) If another bank is authorised or requested by the Issuing Bank to add its confirmation to a Credit but is not prepared to do so, it must so inform the Issuing Bank without delay.
(ii) Unless the Issuing Bank specifies otherwise in its authorisation or request to add confirmation, the Advising Bank may advise the Credit to the Beneficiary without adding its confirmation.
(d) (i) Except as otherwise provided by Article 48, an irrevocable Credit can neither be amended nor cancelled without the agreement of the Issuing Bank, the Confirming Bank, if any, and the Beneficiary.
(ii) The Issuing Bank shall be irrevocably bound by an amendment(s) issued by it from the time of the issuance of such amendment(s). A Confirming Bank may extend its confirmation to an amendment and shall be irrevocably bound as of the time of its advice of the amendment. A Confirming Bank may, however, choose to advise an amendment to the Beneficiary without extending its confirmation and if so, must inform the Issuing Bank and the Beneficiary without delay.
(iii) The terms of the original Credit (or a Credit incorporating previously accepted amendment(s)) will remain in force for the Beneficiary until the Beneficiary communicates his acceptance of the amendment to the bank that advised such amendment. The Beneficiary should give notification of acceptance or rejection of amendment(s). If the Beneficiary fails to give such notification, the tender of documents to the Nominated Bank or Issuing Bank, that conform to the Credit and to not yet accepted amendment(s), will be deemed to be notification of acceptance by the Beneficiary of such amendment(s) and as of that moment the Credit will be amended.
(iv) Partial acceptance of amendments contained in on
Article 10 Types of Credit
(a) All Credits must clearly indicate whether they are available by sight payment, by deferred payment, by acceptance or by negotiation.
(b) (i) Unless the Credit stipulates that it is available on
(ii) Negotiation means the giving of value for Draft(s) and/or document(s) by the bank authorised to negotiate. Mere examination of the documents without giving of value does not constitute a negotiation.
(c) Unless the Nominated Bank is the Confirming Bank, nomination by the Issuing Bank does not constitute any undertaking by the Nominated Bank to pay, to incur a deferred payment undertaking, to accept Draft(s), or to negotiate. Except where expressly agreed to by the Nominated Bank and so communicated to the Beneficiary, the Nominated Bank's receipt of and/or examination and/or forwarding of the documents does not make that bank liable to pay, to incur a deferred payment undertaking, to accept Draft(s), or to negotiate.
(d) By nominating another bank, or by allowing for negotiation by any bank, or by authorising or requesting another bank to add its confirmation, the Issuing Bank authorises such bank to pay, accept Draft(s) or negotiate as the case may be, against documents which appear on their face to be in compliance with the terms and conditions of the Credit and undertakes to reimburse such bank in accordance with the provisions of these Articles.
Article 11 Teletransmitted and Pre-Advised Credits
(a) (i) When an Issuing Bank instructs an Advising Bank by an authenticated tele-transmission to advise a Credit or an amendment to a Credit, the teletransmission will be deemed to be the operative Credit instrument or the operative amendment, and no mail confirmation should be sent. Should a mail confirmation nevertheless be sent, it will have no effect and the Advising Bank will have no obligation to check such mail confirmation against the operative Credit instrument or the operative amendment received by teletransmission.
(ii) If the teletransmission states "full details to follow" (or words of similar effect) or states that the mail confirmation is to be the operative Credit instrument or the operative amendment, then the teletransmission will not be deemed to be the operative Credit instrument or the operative amendment. The Issuing Bank must forward the operative Credit instrument or the operative amendment to such Advising Bank without delay.
(b) If a bank uses the services of an Advising Bank to have the Credit advised to the Beneficiary, it must also use the services of the same bank for advising an amendment(s).
(c) A preliminary advice of the issuance or amendment of an irrevocable Credit (pre-advice), shall on
Article 12 Incomplete or Unclear Instructions
If incomplete or unclear instructions are received to advise, confirm or amend a Credit, the bank requested to act on such instructions may give preliminary notification to the Beneficiary for information on
The Issuing Bank must provide the necessary information without delay. The Credit will be advised, confirmed or amended, on
C. LIABILITIES AND RESPONSIBILITIES
Article 13 Standard for Examination of Documents
(a) Banks must examine all documents stipulated in the Credit with reasonable care, to ascertain whether or not they appear, on their face, to be in compliance with the terms and conditions of the Credit. Compliance of the stipulated documents on their face with the terms and conditions of the Credit, shall be determined by international standard banking practice as reflected in these Articles. Documents which appear on their face to be inconsistent with on
Documents not stipulated in the Credit will not be examined by banks. If they receive such documents, they shall return them to the presenter or pass them on without responsibility.
(b) The Issuing Bank, the Confirming Bank, if any, or a Nominated Bank acting on their behalf, shall each have a reasonable time, not to exceed seven banking days following the day of receipt of the documents, to examine the documents and determine whether to take up or refuse the documents and to inform the party from which it received the documents accordingly.
(c) If a Credit contains conditions without stating the document(s) to be presented in compliance therewith, banks will deem such conditions as not stated and will disregard them.
Article 14 Discrepant Documents and Notice
(a) When the Issuing Bank authorises another bank to pay, incur a deferred payment undertaking, accept Draft(s), or negotiate against documents which appear on their face to be in compliance with the terms and conditions of the Credit, the Issuing Bank and the Confirming Bank, if any, are bound:
- to reimburse the Nominated Bank which has paid, incurred a deferred payment undertaking, accepted Draft(s), or negotiated,
- to take up the documents.
(b) Upon receipt of the documents the Issuing Bank and/or Confirming Bank, if any, or a Nominated Bank acting on their behalf, must determine on the basis of the documents alone whether or not they appear on their face to be in compliance with the terms and conditions of the Credit. If the documents appear on their face not to be in compliance with the terms and conditions of the Credit, such banks may refuse to take up the documents.
(c) If the Issuing Bank determines that the documents appear on their face not to be in compliance with the terms and conditions of the Credit, it may in its sole judgment approach the Applicant for a waiver of the discrepancy (ies). This does not, however, extend the period mentioned in sub-Article 13(b). (d) (i) If the Issuing Bank and/or Confirming Bank, if any, or a Nominated Bank acting on their behalf, decides to refuse the documents, it must give notice to that effect by telecommunication or, if that is not possible, by other expeditious means, without delay but no later than the close of the seventh banking day following the day of receipt of the documents. Such notice shall be given to the bank from which it received the documents, or to the Beneficiary, if it received the documents directly from him.
(ii) Such notice must state all discrepancies in respect of which the bank refuses the documents and must also state whether it is holding the documents at the disposal of, or is returning them to, the presenter.
(iii) The Issuing Bank and/or Confirming Bank, if any, shall then be entitled to claim from the remitting bank refund, with interest, of any reimbursement which has been made to that bank.
(e) If the Issuing Bank and/or Confirming Bank, if any, fails to act in accordance with the provisions of this Article and/or fails to hold the documents at the disposal of, or return them to the presenter, the Issuing Bank and/or Confirming Bank, if any, shall be precluded from claiming that the documents are not in compliance with the terms and conditions of the Credit.
(f) If the remitting bank draws the attention of the Issuing Bank and/or Confirming Bank, if any, to any discrepancy(ies) in the document(s) or advises such banks that it has paid, incurred a deferred payment undertaking, accepted Draft(s) or negotiated under reserve or against an indemnity in respect of such discrepancy(ies), the Issuing Bank and/ or Confirming Bank, if any, shall not be thereby relieved from any of their obligations under any provision of this Article. Such reserve or indemnity concerns on
Article 15 Disclaimer on Effectiveness of Documents
Banks assume no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any document(s), or for the general and/or particular conditions stipulated in the document(s) or superimposed thereon; nor do they assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods represented by any document(s), or for the good faith or acts and/or omissions, solvency, performance or standing of the consignors, the carriers, the forwarders, the consignees or the insurers of the goods, or any other person whomsoever.
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