ICC Rules Study_ International Chamber of Commerce Opinion
The analysis process of this official opinion is somewhat special, as it includes two parts: the analysis process of the National Committee of Country I, which provides more detailed and accurate case details, and the analysis of the ICC Banking Commission, which is more targeted; however, their conclusions are consistent.
R812
Invoice quotes pre-printed payment terms that are not in accordance with the payment terms of the credit; the invoice also quotes the payment terms of the credit; packing list and weight list indicate additional order numbers that are not covered by the invoice.
The confirmed letter of credit stipulates payment terms of 60 days after shipment, allowing partial shipments. The confirming bank received two sets of documents and deemed them compliant, then sent the documents to the issuing bank. The issuing bank raised two discrepancies: “Incorrect payment terms on the invoice (common discrepancy in both submissions)” and an additional discrepancy for the second submission: “Packing list and weight note indicate additional order numbers 14059 and 14051 not reflected in the invoice.” The confirming bank deemed these two discrepancies invalid and sent the documents back to the issuing bank as is, which then returned them citing “late presentation,” resulting in four rounds of back and forth.
The confirming bank submitted the case to the National Committee of Country I, and after receiving a response, submitted the case to the ICC Banking Commission, leading to two analysis processes, which is somewhat lengthy…
99
Opinion R812 (TA824rev)
Discrepancies Between Pre-printed Invoice Content and Letter of Credit
R812 (TA824rev)2012~16
Issue Review
QUERY
QUOTE
A credit is available by deferred payment with a confirming bank, and subject to UCP 600.
The expiry date was 10 August 2014 and the place of expiry was that of the confirming bank.
Further details were:
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Payment terms: 60 days from shipment date.
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Draft not envisaged
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Partial shipments allowed
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Latest shipment date: 31 July 2014
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Documents requested: invoice, weight note, packing list, insurance policy/certificate, CMR.
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Presentation period: 10 days after shipment date
The confirming bank received documents in 2 presentations:
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Availment no. 1 on 10 July 2014 with CMR dated 4 July 2014;
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Availment no. 2 on 14 July 2014 with CMR dated 11 July 2014.
Both presentations were determined to be complying.
A confirmed letter of credit issued under UCP 600, applicable for deferred payment, with expiry date: 10 August 2014, and place of expiry: confirming bank’s location.
Main content as follows:
Payment terms: 60 days after shipment date
Draft: not required
Partial shipments: allowed
Latest shipment date: 31 July 2014
Documents required: invoice, weight note, packing list, insurance policy/certificate, CMR (International Road Transport Document)
Presentation period: 10 days after shipment date
The confirming bank received two sets of documents:
First presentation date: 10 July 2014, CMR date: 4 July 2014
Second presentation date: 14 July 2014, CMR date: 11 July 2014
The confirming bank deemed both presentations compliant.
On 16 July 2014, the confirming bank sent documents relating to availments 1 and 2 to the issuing bank.
On 23 July 2014, the issuing bank, while returning documents to the confirming bank, sent two advices of refusal (SWIFT MT734) relating to availments 1 and 2, stating in both MT734’s the discrepancy “wrong payment terms on invoice”.
Furthermore, the advice of refusal for availment 2 also showed the following discrepancy: “PL and weight note evidencing additional order no.14059 and 14051 which is not covered in invoice”
On 24 July 2014, the confirming bank contested the discrepancies.
On 29 July 2014, the confirming bank re-sent the same documents relating to the 2 availments as above to the issuing bank that then sent them back with the discrepancy “late presentation”.
On 5 August 2014, the confirming bank re-sent the same documents as above and on 8 August 2014 the issuing bank returned them again with the discrepancy “late presentation”.
On 14 August 2014, the confirming bank re-sent the same documents as above and on 19 August 2014 the issuing bank returned them again with the discrepancy “late presentation”.
On 21 August 2014, the confirming bank re-sent the same documents as above and on 28 August 2014 the issuing bank returned them again quoting discrepancies: “wrong payment terms on invoice” and “PL and weight note evidencing additional order no.14059 and 14051 which is not covered in invoice”.
On 16 July 2014, the confirming bank sent the two sets of documents to the issuing bank.
On 23 July 2014, the issuing bank returned the documents and sent two advices of refusal via SWIFT MT734, listing the common discrepancy in both submissions: “wrong payment terms on invoice”.
Additionally, the refusal notice for the second submission also specified the following discrepancy: “PL and weight note evidencing additional order no.14059 and 14051 which is not covered in invoice”.
On 24 July 2014, the confirming bank contested the discrepancies.
On 29 July 2014, the confirming bank re-sent the two submissions mentioned above to the issuing bank, which then returned them citing “late presentation” as the discrepancy.
On 5 August 2014, the confirming bank sent the same documents again to the issuing bank, which returned them again on 8 August with the discrepancy “late presentation”.
On 14 August 2014, the confirming bank sent the same documents again to the issuing bank, which returned them again on 19 August with the discrepancy “late presentation”.
On 21 August 2014, the confirming bank sent the same documents again to the issuing bank, which returned them again on 28 August, citing discrepancies: “wrong payment terms on invoice” and “PL and weight note evidencing additional order no.14059 and 14051 which is not covered in invoice”.
Our National Committee had been asked for its opinion as to the validity of the discrepancies raised and offered the following opinion:
Preliminary remarks:
1. Any subsequent sending of documents from confirming bank to issuing bank after the first presentation is irrelevant, since the same documents were being re-sent. As a matter of fact, since the CMRs were dated 4th July and 11th July 2014 respectively and bearing in mind that the presentation period on them was 10 days after shipment date, it would have been impossible to amend the first presentation documents after 23rd July, when the refused documents had been received back for the first time.
2. The issuing bank has never formally waived any of the 2 discrepancies.
About discrepancies:
A. Discrepancy “wrong payment terms on invoice” related to both invoices.
As the wording “Payment: 60 days after shipment date” indicated in the credit is quoted on both invoices at the beginning of goods description, this discrepancy is unjustified. In any case the payment term detail is not required by the credit. The data “506 irr. Letter of Credit at sight” printed under the heading of each invoice and seeming to be a customary quote on the invoices, falls within the flexibility allowed for UCP 600 sub-article 14 (d) stating “data in a document when read ….need not be identical to, but must not conflict with, data in that document…”. In the case we examine, there is no conflict because the payment terms quoted in the letter of credit are exactly the same as quoted in both the invoices at the beginning of the description of goods. Furthermore, the very wording of the advice of refusal simply states that payment terms on the invoice are “wrong”; it does not indicate the exact discrepancy in respect of which the bank refuses to honour, thus disregarding UCP 600 sub-article 16 (c) (ii) and, more specifically, the relevant Opinion R672 of the ICC Banking Commission. The latter envisages that, to be valid, a “discrepancy must be complete and precise”. Hence, as per UCP 600 sub-article 14 (f), the Advice of Refusal is to be considered null and void and documents therefore implicitly accepted.
About discrepancies:
A. Discrepancy “wrong payment terms on invoice” related to both invoices.
As the wording “Payment: 60 days after shipment date” indicated in the credit is quoted on both invoices at the beginning of goods description, this discrepancy is unjustified. In any case the payment term detail is not required by the credit. The data “506 irr. Letter of Credit at sight” printed under the heading of each invoice and seeming to be a customary quote on the invoices, falls within the flexibility allowed for UCP 600 sub-article 14 (d) stating “data in a document when read ….need not be identical to, but must not conflict with, data in that document…”. In the case we examine, there is no conflict because the payment terms quoted in the letter of credit are exactly the same as quoted in both the invoices at the beginning of the description of goods. Furthermore, the very wording of the advice of refusal simply states that payment terms on the invoice are “wrong”; it does not indicate the exact discrepancy in respect of which the bank refuses to honour, thus disregarding UCP 600 sub-article 16 (c) (ii) and, more specifically, the relevant Opinion R672 of the ICC Banking Commission. The latter envisages that, to be valid, a “discrepancy must be complete and precise”. Hence, as per UCP 600 sub-article 14 (f), the Advice of Refusal is to be considered null and void and documents therefore implicitly accepted.
Discrepancy “PL and weight note evidencing additional order no.14059 and 14051 which is not covered in invoice” raised for one invoice only.
Unless otherwise required by the credit, banks according to ISBP paragraph M1 check that the packing list “…fulfils its function by containing any information as to the packing of the goods”. Banks do not have to check other data shown on the packing list.
According to ISBP paragraph C11, banks check in the invoice that “Any total quantity of goods and their weight or measurement shown on the invoice is not to conflict with the same data appearing on other documents”. Documents presented in availment of the letter of credit and shown to this Committee are fully complying with the above. Any different contractual reference in the PL as compared to the invoice is irrelevant. Raised discrepancy is groundless.
Consultation with ICC:
We would be grateful to know the opinion of the ICC Banking Commission in respect of the validity of the discrepancies described in the case above.
ICC Analysis
ANALYSIS
The credit permitted partial shipments. Two presentations were made under the credit on 10 and 14 July 2014, and the confirming bank determined both presentations as compliant with the credit terms and forwarded them to the issuing bank.
The issuing bank rejected (by SWIFT MT734) and returned both presentations to the confirming bank, notifying a common discrepancy “wrong payment terms on invoices” on both presentations and an additional discrepancy “PL and weight note evidencing additional order no.14059 and 14051 which is not covered in invoice” in the second presentation.
The confirming bank contested the notified discrepancies but had not sought further details/clarifications, it instead re-presented both presentations on four occasions to the issuing bank in the same status as they were returned to them. The first three re-presentations had been returned by the issuing bank with the discrepancy “late presentation” and the fourth re-presentation was refused citing the original two discrepancies.
With regard to the common discrepancy, the confirming bank had referred to and sought opinion from the ICC National Committee in Country I, which reflected that the words “506 irr. Letter of Credit at sight” was pre-printed under the heading of both the invoices, in addition to the correct payment terms as specified in the credit, which were stated preceding the description of goods.
Regardless of the fact that the invoice stated the pre-printed wording, it also correctly stated the payment terms as 60 days from shipment date. The additional wording overrides the pre-printed wording. The credit is clearly available by deferred payment and such difference within the invoice itself is not a matter on which a discrepancy should be based. The beneficiary presented documents under the terms and conditions of a deferred payment credit and would not be expecting payment at sight. The issuing bank and confirming bank would only honour in accordance with the terms and conditions of the credit. The additional erroneous wording stated within the invoice does not detract from this.
Regarding the common discrepancy “wrong payment terms on invoice”
The confirming bank consulted the National Committee of Country I, which provided the following opinion: the pre-printed wording “506 irr. Letter of Credit at sight” under the heading of the invoices is a formatting content. The payment terms required by the credit have been correctly displayed at the beginning of the goods description on both invoices.
Despite the invoice containing the pre-printed wording, it has correctly displayed the payment terms required by the credit (60 days after shipment date). The additional wording overrides the pre-printed content. The credit is clearly applicable for deferred payment, and such differences within the invoice should not be a basis for discrepancies.
The beneficiary submitted documents under the terms and conditions of a deferred payment credit and did not expect to receive payment at sight. The issuing bank and confirming bank will only honour according to the terms and conditions of the credit. The additional erroneous wording in the invoice does not affect the payment obligation.
As regards the second discrepancy, notified on the second presentation, regarding “PL and weight note evidencing additional order no.14059 and 14051 which is not covered in invoice” – as long as these documents stated the ‘order numbers’ specified in the credit, the additional order numbers would be treated as additional information as long as they did not conflict either with other related details within the document or with any other document and the credit.
ICC Conclusion
CONCLUSION
1. The payment term on the invoices is not a discrepancy.
2. The mentioning of additional order numbers on PL and Weight Note is not a discrepancy.
1. The payment terms on the invoice do not constitute a discrepancy.
2. The additional order numbers on the packing list and weight note do not constitute a discrepancy.
Two Analysis Processes
This official opinion is lengthy, mainly containing two analysis processes. Clearly, when submitted to the National Committee of Country I, they must have seen the documents; otherwise, from the narrative of the case, it is difficult to know what the issuing bank’s discrepancy of “wrong payment terms on invoice” specifically refers to. The ICC’s analysis also cites the content described by the National Committee of Country I.
Regarding the dispute over the first discrepancy, the ICC’s core viewpoint is: The additional wording overrides the pre-printed wording.” This means that the effect of the additional content takes precedence over the pre-printed content, and the issuing bank and confirming bank will make payments according to the payment terms specified in the credit, not according to the payment terms displayed on the invoice.
The judgment basis for the second discrepancy is data conflict, which is not difficult to understand.
Author: Mingyue | Original
# Music and Time
……
Fragmented Thoughts
Battlefield Yellow Flower
I mainly use flowers, plants, still life, and landscapes as illustrations in my public account, and my favorite flower is the sunflower. This may be related to my childhood in Xinjiang, where I often saw fields of sunflowers along the road during car rides. The biggest characteristic of this flower is that it blooms towards the sun, giving a simple, resilient, and optimistic feeling, and sunflower seeds are delicious!
Chairman Mao wrote in “Caisangzi·Chongyang”: “Life ages easily, but heaven does not age; every year it is Chongyang. Now it is Chongyang again, and the battlefield yellow flowers are particularly fragrant.” Here, the “yellow flower” refers to chrysanthemums. Since it is “battlefield yellow flowers,” the noble and aloof nature of chrysanthemums adds a touch of heroic and solemn atmosphere.
The Russia-Ukraine war has lasted for more than three years, and daily news reports have gradually made people numb to the related content. Recently, there have been talks between Russia and Ukraine in Turkey, and seeing the demands put forward by both sides, while also observing Zelensky still seeking weapons everywhere, I feel that the intensity of the war may decrease, but the conflict will continue, and achieving peace is still far away.
Last weekend, I watched a TV news segment where a reporter interviewed several soldiers learning to operate drones beside a field of sunflowers. I didn’t pay attention to the content of the conversation between the reporter and the soldiers; I only saw a fleeting shot of the flourishing sunflowers. They do not care how long the war will last, whether they will be ravaged and turned to ashes in the war, or what the meaning of this war is; they just bloom with all their might in the world.
If we say that “Caisangzi·Chongyang” is Chairman Mao’s reflection on the Chongyang Festival and an allegory for chrysanthemums, then the sunflowers blooming on the battlefield of Russia and Ukraine are the real “battlefield yellow flowers” in the world.
Summer
SUMMER
2025.5.21 Wednesday Grain Full
“Some wounds are invisible, but require more sensitive eyes to heal.”
WeChat ID: CDCS-2018
1. CDCS Exam Experience
2. Letter of Credit Practice/English
3. International Trade/Settlement Knowledge
4. ICC Rules Interpretation
5. Mingyue’s Thoughts
