Debate persists on when an independent undertaking is issued: upon leaving the issuer’s control or only when advised to the beneficiary. Various rules clarify issuance timing.
One Draft Opinion will be discussed at the ICC Banking Commission’s next quarterly virtual meeting in July 2022. The Draft Opinion was released to ICC National Committees for review and comment by 28 June.
Draft Opinion TA925 deals with query from an LC beneficiary in which presented documents were taken up by the confirming bank. The confirming bank subsequently informed the beneficiary that it received a refusal notice from the issuing bank. The beneficiary sought payment from the confirming bank as its documents were taken up without any reserve.
Although the confirming bank admitted it had “overlooked a discrepancy” and had taken up the documents, it had done so “within the grace period” and offered payment under reserve or payment contingent on the issuing bank’s acceptance of the documents.
In justifying their respective positions, the confirming bank cited UCP600 Article 8 and the beneficiary referred to UCP600 Article 15(b). Each party was “surprised” at the other’s stance in the dispute.
The Draft Opinion addresses the beneficiary’s question: “Could we insist on payment under the confirmation, without reserve, or is the confirming bank allowed to revise their acceptance of the documents?”
Debate persists on when an independent undertaking is issued: upon leaving the issuer’s control or only when advised to the beneficiary. Various rules clarify issuance timing.
On 15 Feb 2023, DCSA members pledged to issue 50% of bills of lading (B/Ls) electronically by 2028 and 100% by 2030, aiming to cut costs and boost global trade.
