This revised version of the ISBP brings it into line with UCP ISBP was conceived as an intelligent checklist of procedures for document checkers to follow in. to read (it basically follows the set up of the UCP rules and a bank do not agree how to interpreted the UCP + ISBP when working with a letter of credit. It is important to note that ISBP does not amend UCP It explains how practices articulated in UCP are to be applied by documentary.
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The ISBP full title: International Standard Banking Practice for the Examination of Documents under Documentary Credits is an International Chamber of Commerce ICC publication which provides important guidance regarding the examination of documents presented against letters of credit.
This entailed a substantial update to the former version and includes 60 number isbbp both new and reworded interpretations as well isgp some significant additions resulting from various official opinions published by the ICC. ISBP has therefore become an absolutely essential publication for anyone who is involved in letters of credit. Advanced Guide to Letters of Credit for Exporters. This article highlights some of the key changes in the revised guide but it is worth emphasising why the first ISBP was produced back inboth with the same objective.
UCP and ISBP for Corporates – Understanding How Banks Check Documents
It is not intended to be a definitive guide, rather our interpretation isb; changes which, having discussed these with a number of our clients, are worth emphasising to ensure that documentary presentations are compliant when they are examined by banks. Under Preliminary Considerationsthere is an expanded paragraph on the risks that accompany a beneficiary accepting a letter of credit which requires the presentation of a document that is to be issued, signed or countersigned by the applicant.
The expanded text emphasises that the beneficiary of the letter of credit should consider the appropriateness of this requirement carefully or seek an amendment.
Having encountered a number of letters of credit with similar clauses in recent months, all issued by banks in the Middle East, this is a naturally a real risk.
I sincerely hope that they obtain this document and get paid! This is valuable clarification for every documentary credit practitioner.
A Guide to International Standard Banking Practice (ISBP 745)
The ISBP now states that when a certificate, declaration or statement is required by the letter of credit, the document is to be signed. Most of our clients have told me that they would of course routinely sign such documents, but again this explicit clarification is helpful. It is unusual to come across a letter of credit which does not call for some form of certificate evidencing that …. If the letter of credit calls for copy transport documents rather than originals, the ISBP states that UCP articles which relate to transport documents do not apply.
Copy transport documents are to be examined only to the extent expressly stated in the credit, otherwise according to UCP sub-article 14 fwhich effectively means that the document presented appears to fulfil the function of the required document and that there is no conflict regarding the data on the document, with any other document stipulated in the letter of credit.
The ISBP provides clarity that if this expression is used a presentation may consist of one or more of the stipulated documents provided they are presented with the expiry date of the credit and the drawing amount is isbpp that which is available under the credit.
The documents will not otherwise ispb examined for compliance under the credit or UCPincluding whether they are presented in the required number of originals or copies.
This fresh interpretation does at least provide some criteria, albeit very scant, should this set phrase sibp encountered. Shipping Marks — as a former documentary examiner for a bank, I am conditioned to want to see exact mirror images when comparing documents to letter of credit. This is not necessarily the case or indeed correct, but it is, for me, a natural reaction.
With this in mind, the ISBP indicates that if a letter of credit states that the details of a shipping mark are 60 be evidenced on specific documents, isbpp details must be shown but not necessarily in the exact same sequence as expressed in the letter of credit. Some of our clients have commented that this is a surprise to them as they would never consider presenting documents which contain shipping marks in any other sequence to that required in the letter of credit, but it is worth noting these revised guidelines in the ISBP.
Perhaps one of the ixbp that causes the most debate amongst documentary credit practitioners is the description of goods on the invoice compared to the description as stated within the letter of credit. Examples are provided as follows: Such 6600 would be deemed unacceptable due to a change in classification or category of the goods. Our recommendation is that the tried and tested policy of quoting the goods description on the invoice verbatim as per the goods description required under the letter of credit is still the best course of action.
In the absence of these requirements, such a stipulation will be disregarded and the bill of lading presented is to be examined according to the requirements of UCP article So in short, such clauses are totally superfluous 600 will be disregarded.
Country named on bill of lading. This is quite a common question, however Iisbp is quite clear on this issue — A bill of lading is to indicate the port of loading stated in the credit. When a credit indicates the port of loading by also stating the country in which the port is located, the name of the country need not be stated. So the bank in question erroneously raised this as a discrepancy.
International Standard Banking Practice
This interpretation also applies to air waybills, with no requirement for the country to be stated on the document. There are some very important elements in ISBP which relate to air waybills. The ten elements of ISBP referred to in this guide are not placed in order of importance nor are they intended as anything other than a brief introduction highlighting the common issues raised during our conversations osbp clients or delegates who attend ibsp training courses.
The latest version of ISBP represents a jsbp more comprehensive interpretation of how the UCP rules are applied in practice and is a must for anyone involved in the collation or presentation of documents under letters of credit. The Essential Guide to Letters of Credit for Exporters Advanced Guide to Letters of Credit for Exporters This article highlights some of the key changes in the revised guide but it is 600 emphasising why the first ISBP was produced back inboth with the same objective ; To encourage a uniformity of practice worldwide to reduce the number of credits rejected by banks owing to discrepancies.
The ISBP provides practices that should be applied by documentary credit practitioners helping to reduce discrepant presentations. The contents of ISBP are as follows: A guide to applying for a letter of credit for imports. Risks for banks and exporters.
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