11 December 2008

It was just the other day that I got the following message:

The Deadline for National Committees to submit requests for Opinions is 30 December 2008

And it feels like it was just a few weeks since I took the plane out of Paris with the bundle of Opinions under my arm – and in fact just today – I finalised my internal walk through of the Paris Opinions. So how could the deadline for the next meeting be in just a few weeks? I guess the answer is that this year has been a crazy one. Everything has been going so fast – and in fact so unpredicted. To me the code words for 2008 are “hectic” and “unpredictable”.

The financial crisis has managed to set its ugly fingerprint on the Trade Finance departments all over the world. It seems to be moving in different directions. Some deals are just gone – because the business stops. Some deals come – or perhaps even ”come back” because the commercial parties want to go back to more traditional payment methods (like the LC).
Perhaps above all, it seems to me that “reality” has “hit” some of the trade finance officers. A missed discrepancy can have serious consequences if the buyer no longer want the goods – or if the commodity price has dropped. Of course it has always been like that – but now there are more examples of exactly that happening. I clearly see some “fear” out there – and fear is certainly no good in times of crisis.

It will be interesting to see where this will take the LC instrument in 2009 – and perhaps evenly interesting where it will take some of the new alternative payment instruments – like the TSU from SWIFT. One year back it seemed so logic to take the trade finance deals and move them to other lighter payment instruments. I wonder if that logic is still there?

Another hot topic during 2008 has been the issue of sanctions – and I feel confident that this will haunt us like a ghost also during 2009. This is by far the biggest threat to the LC instrument that I have ever seen. It is not that I do not understand why sanctions are imposed – but it goes so fundamentally against the nature of the LC Instrument. For the cases I have seen (3 so far) it has been so “easy” for the issuing bank to bail out of its obligation just by saying: “The documents include information that violates certain sanctions. We return the documents and close our file” … wouw – so much for an independent documentary undertaking!!

I wish to share with you the latest one that I have seen:

Is such returning of the documents really right? I surely think not – and what about the protection of the nominated banks by the UCP 600? Something is clearly not right here … and my biggest hope for 2009 – is that this problem – this ghost – will find a normal balance – so that we can act with common sense – instead of in total panic – as it seems to me banks are doing now!

As for lcviews.com 2008 has also been a hectic year. I guess it is obvious from the "irregular" uploads to the site – mainly due to my impossible calendar :-)  However; we have received – and do still receive many great questions, comments and feed-back from the readers. It has in fact been a true pleasure working with all of you, and I surely look forward to continue that in 2009.

Also a number of great articles have been published on site during this year. I send great thanks to all the authors who so generously contribute their work to lcviews.com. Without that there would be no lcviews!

With that – on behalf of the fantastic editorial board of lcviews – I thank you for 2008 – and wish you happy holidays and a great new year.

Best regards

Kim

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5 November 2008

Dear all,

Already now it feels like months ago the ICC Banking Commission met in Paris. It was however only 23 and 24 October!

Thinking back it seems to me that may cases and issues are working in the right direction. I guess one could argue that the pace could be faster J but at least there is progress …

Many interesting topics were discussed – and here is a rough – and incomplete overview:

Opinions handling

A new – and more – structured way of handling requests for opinions sent to the ICC Banking Commission were agreed to. It basically means 3 things:

(1) Fixed deadlines regarding when requests for opinions must be received to the ICC (12 weeks before the meeting), and when the draft Opinions are made available to the National Committees (10 weeks before the meeting) and when the National Committees must (latest) comment on the opinions (2 weeks before the next ICC Banking Commission meeting).

(2) There will be established an Intranet where the comments are made available for other National Committees to view and comment.

(3) The discussions during the meeting will be done in a more structured way; i.e. in terms of who speaks for a National Committee and in what order the various topics are discussed.

The URDG Revision

A Report on the URDG Revision was given. Read more on “The URDG on the operating table”.

ICC Opinions

15 ICC Opinions were discussed.

A few topics include:

TA.670 final (UCP 600)
When an LC calls for “Vessel certificate issued by Shipping Company or their agents”, the a vessel certificate issued by the carrier indicated on the bill of lading, or an agent signing on their behalf, would comply.

TA.668rev (UCP 600)
Which basically says that if e.g. the LC calls for “Beneficiary’s certificate along with relevant courier receipt certifying that one set of nonnegotiable documents have been sent to the applicant within 3 working days after shipment date.” – Then it should – at the outset – be signed – unless the document has no signature space – because then no signature is required …

TA.669rev (UCP 600)
This Opinion makes the UCP 500 practice regarding freight forwarders applicable also under UCP 600. This means that if the LC states “Transport document issued by Freight Forwarder not acceptable” or “House bill of lading not acceptable” – then this will merely mean that the signing requirement for the required transport document (e.g. “as carrier” or “as agent for the carrier”) must be complied with.

For a number of transport related opinions – it was agreed that the transport industry would be contacted for further guidance. This would include:

(a) is an on board notation that states the “port of loading”  required when the a LC calls for an UCP Article 20 transport document and the presented  B/L  shows a place of receipt  and a LC port of loading?

(b) What kind of on board notation is required when the LC called for a multimodal transport document – and the first leg of the transport is done by sea?

(c) if a  transport document indicates anywhere on its face that “it may be issued subject to a charter party” or “fees subject to a charter party” must it be considered a charter party if it also satisfies the requirements of a required UCP 600 Article 19 or 20 transport document ?

We will address these issues once more information is available…

Clauses on Bills of lading.

A report was given on the progress of the case where bills of lading presented under an LC include a clause to the effect that the goods may be delivered without surrender of an original BL. The Commission on Commercial Law and Practice and the Transport Commission has been consulted – and a letter will be circulated. The basis of the message will be that from a LC bankers point of view it is not a discrepancy according to UCP and/or standard banking practices. The issue of this type of B/L is specific to the transport industry practices and is outside the purview of the banks. More information will follow once available.

Sanctions and AML Task Force

It was also announce that the AML task Force has been established – and they will start to work on the various tasks at hand … one being the issue of sanction clauses in LCs … I await that one eagerly J

Next meeting

Will be 11 and 12 March 2009 in Dubai

So all in all a very fruitful and interesting meeting … already looking forward to Dubai …

Best regards

Kim

Best regards

Kim

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We are now approaching the week of the meeting in the ICC Banking Commission. As always great activity is surrounding this meeting. There are (as always) very interesting topics on the agenda. So far the main interest has been around two issues: The draft opinions and a new proposed way of handling those.

The draft opinions includes a number of interesting topics – which we will address once we have the final version; as some is indeed debatable; like what does it take for a B/L (For the purpose of UCP 600) to “indicate that it is issued subject to a charter party”? Also the issue of on board notations is again on the table; and no less than 3 queries circle around this; so if nothing else it does seem like some final authoritative statement is required.

The fact that the ICC Banking Commission is seeking a new way of handling the opinions is most welcome. At the outset they suggest to circulate the comments from the National commissions by means of e-mail. Originally it was suggested to upload those to an Intranet. We must see where it lands. To me it is not that important how this is done; what is important is that the comments are made available before the meeting – so the participants to the meeting have access to the comments and arguments made.

Also on the agenda is of course the 2^nd draft to the new URDG – surely that discussion will be interesting as well.

We will revert after the meeting and touch upon some of the many interesting things that arises form the smoke.

See you later.

Best regards

Kim

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15 September 2008

During September and October many national ICC Committees are meeting to discuss the 2nd URDG draft. For me personally the process of producing comments to the URDG has been quite an interesting experience. It is – I guess – of no surprise to anyone that I come from “the land of LCs” – so discussing with guarantee specialists is indeed different, challenging and rewarding. In my experience many of the discussions regarding the new articles circles around the new wordings that are heavily based on the UCP 600. These articles provide different challenges for example: 

• Some concepts that are commonly known to LC Specialists – are far from known to guarantee specialist. For example the preclusion rule (sub-article 24(f) – in 2^nd URDG draft). This rule makes no immediate sense to all guarantee specialists – and some of the people I have talked to were in fact surprised about how rigorous this rule in fact is; i.e. that a simple technical mistake in the “notice of refusal” can have such sever consequences.
   
• Other concepts taken from the UCP 600 – seems redundant. For example the “waiver rule” (sub-article 24(b) – in 2^nd URDG draft). Even under LC’s one can argue that this rule is merely saying the obvious: That the issuer has a right to contact the applicant to find out if (s)he want to waive the discrepancies. However in a guarantee, which is a “passive” instrument, there are only few claims made (compared to the number of guarantees issued) AND when a claim is made one must expect that there is a dispute between the parties – and the applicant want to refuse to pay if at all possible. It is therefore rather unlikely that the applicant would want to waive the discrepancies.
  In other words: It is not a provision that does any “damage” – but it is hard for me to see the real relevance.
   
• Opposite I feel about sub-article 20(b) in the 2^nd URDG draft. This is where you find a substantial element of the new “standard for examination of the documents”. The principle is similar to that of UCP 600 sub-article 14(d), which says that:
  
  Data in a document, when read in context with the credit, the document itself and international standard banking practice, need not be identical to, but must not conflict with, data in that document, any other stipulated document or the credit.
  
  As far as I can see, such provision may well be suited for LCs – where the beneficiary are to present documents in order to get paid; i.e. knowing that the documents will be scrutinised under the LC – but hardly appropriate under a guarantee. In case the guarantee – in addition to the demand – requires other documents e.g. copy of invoice and bill of lading, such should – in general terms – only be considered accompanying documents – and should not be the basis for a rejection of the presentation.
   
• In general it seems to me that the guarantee specialists are used to a bit more “loose” provisions than the LC specialists; so these “fixed” number of days, years or whatever does in fact take a bit to get used to :-)

The above being said I must add that it is such a pleasure to have a “full draft” – i.e. including all articles – to comment on. The URDG drafting group have really been doing a great job in producing the first two drafts. In general the Trade Finance community should really appreciate the work done by the URDG drafting group. I have seen a number of the sets of comments submitted by the various national committees – and it is indeed striking how different a focus they have – which makes the task of the drafters much more challenging.

The deadline for submitting the comments is 6 November – and before that I feel confident that this 2^nd draft will be discussed at the meeting in the ICC Banking Commission end October. It will be interesting indeed to follow this discussion.

Best regards

Kim

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1 September 2008

Was that really that summer? That went fast for sure. It seems to me that it has been busy for all of us – and being busy … well then at least you do not get bored :-) If you are too busy however it may mean that you decline things that you should not have declined – and misses great opportunities. Just recently I was so close making exactly that mistake, and I would like to share that with you here. Somehow the case I will tell you about is connected to my posting 1 June – i.e. published 3 months ago.

It is related to the question asked by Sheilar – and answered here as “SWQ 105: Availability versus place of expiry”. When I first read this question my immediate thought was: This LC is ambiguous – and it makes no sense trying to “interpret” an LC where the issuing bank clearly is missing the point: If the LC is broken – the remedy is either

1) an amendment or

2) returning the LC –

3) not UCP 600 guessing.

Therefore I was that close to simply rejecting it by saying: Contact issuing demanding for an amendment!

It is however so that I am normally intrigued by the issues and questions raised by Sheilar – because they are always so well thought through – and perfectly founded in rules and practice.

Therefore I decided to dig a bit into this case. What struck me in that process was that everyone I spoke with seemed to be quite familiar with this type of LC; or in other words: there are many of those LCs out there – being handled on a daily basis. Is that not odd? Perhaps it is – and perhaps it is not. In any case I also found that the people I spoke to – actually were fully aware that such LC is not in line with UCP 600 – but somehow had decided to go along with it. The good question of course: Why do they do that? Well; because they are working out there in real life – and the fact of real life is that you try to make things work as smooth for your customer as you possibly can  – and only make a hassle when something is really wrong! So if you for example – after having spend two weeks in trying to get an amendment in vain – decides not to handle the LC – you do not win a medal! You may even loose the customer :-) So even within the LC sphere things need to work – not least in practice.

This is where I come to my 1 June posting. In that one I noted the following: 

I have been thinking lately whether or not the distance between the LC officers working with the UCP 600 on a daily basis and the LC commentators and LC experts are becoming too big.

As far as I can see this case is a perfect example of how the perspective of the LC officers and the LC commentators is in fact quite big. I feel confident that many LC commentators would merely say – as was my original thought: The LC is ambiguous – no need to waste your time on that one. But still when such LC ticks into the computer screen of an LC officer (s)he does not have that privilege: The case must be handled – and of course in an efficient manner: The “right” decision must be taken quickly!

I am not saying that banks should just accept everything that is written in LCs – and I am sure they do not. I am merely saying that it is easy for the LC commentator to refuse a question on the ground that the LC is ambiguous. It is much harder being that LC officer that has to handle it – finding the right balance on what is acceptable from a risk perspective – and what is acceptable from a customer perspective.

I could just have refused to answer the question from Sheilar – which would have been the easiest. I did not do that – and looking back at the discussions I had based on that I am happy that I did not.

Best regards

Kim

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1 August 2008

Summertime … nice indeed. I hope that you have been enjoying it too – but now it is time to take lcviews.com out of its one month long hibernation :-)

We have many great things in the pipeline for you. I will however start this posting with a celebration to all of you out there so dedicated to the LC – working so hard to truly understand the inner being of this strange “animal”. At one point in time I did some LC training in the UAE – and I was just so impressed about the knowledge and dedication to LC’s at that place … to me it was like being in paradise :-) It seems to me that there are those small great oases out there – where the interest and dedication is just a bit (perhaps even a lot) above average. In this edition of “Editors Journal” – I will actually focus on another LC oasis that I have been so very fortunate to get to know; namely Bangladesh. I meet so many great LC specialists from Bangladesh on internet and e-mails. Common for them is the desire to understand the LC; they come with an open mind unafraid to ask all the “silly” questions – which of course turns out not to be so silly after all. Here I will focus on two of them – both of which have been just been added to Who’s Who in LC World.

One is Shahriar Mansun:

Check out his bio in”Who’s Who in LC World”. Worth mentioning here is that he runs this great website – that deals with … well of course: LCs. It is called: Best trade solutions. It is hereby recommended.

The other one is Nesarul Hoque:

Check out his bio in”Who’s Who in LC World”. Nesarul has generously submitted an article to lcviews.com: Instalment drawing under article 32 of UCP 600. Enjoy!

….

What else … well the ICC have just published the new version of URR – the Uniform Rules for Reimbursements. The “new” name is URR 725. The new coastline solutions newsletter takes you through that one … read more here.

All for now! As said – we have lots of material in the pipeline so check out the page ….

Best regards

Kim

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1 June 2008
 

Rapidly approaching the one year birthday for UCP 600, it seems that an endless line of questions continues to be addressed. Most of them related to the practical application of the rules. I have been thinking lately whether or not the distance between the LC officers working with the UCP 600 on a daily basis and the LC commentators and LC experts are becoming too big. I would not know really - but will try to focus on that in the time to come. Coming back to the birthday - one month from now - I hereby invite comments from you. I would really like to know how you think that the UCP 600 is working. Is it a success? Is "LC life" better now - than it was before 1 July 2007? Kindly send your comments to lcviews@lcviews.com I would also mention one Single Window answer we have published today; namely SW-90. In that one I call for copies of transport documents that are of interest in relation to ISBP § 114. Such would be highly appreciated.

Finally I will mention the latest newsletter from Coastline Solutions:

http://www.coastlinesolutions.com/news.htm

In that one Gary Collyer goes through some of the ICC Opinions approved at the April meeting in the ICC Banking Commission. It is highly appreciated that this information now starts to flow freely on the internet. What puzzles me though is that the summary of each opinion ends with the following "See opinion TAXXX for the full transcript of the opinion". I fail to see where such "full transcript" is available - except of course in the DC-Pro Focus - which requires payment of a yearly fee. I hope however that this is the first step towards full disclosure of those ICC Opinions - that are such important part of "international standard banking practice".

Best regards

Kim

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Comment from VV:

Dear Kim,

For me, UCP600 and ISBP 681 are only the new rules of the game. They are designed and decided by a group of experts in the blackbox, who have different ideas as well as different interest backgrounds. Their compromises always don't bring the best results. Some newly added things result improvement, e.g. Art 12b, although they have been expected too long. However, some make the original rules vaguer than before, e.g., Art 20 concerning port of loading different from place of receipt.

As a user since ICC 298, what I can do is to follow the rules written down and wait for the new opinions and cases. It may be a little sad but true. Nevertheless, UCP and ISBP are only part of the game, and the rest, such as the underlying contracts and relationship between the contracts' parties, are still dominant. But the L/C would be gradually abandoned by the users, if the articles and rules have gone too far from reality and difficult to be applied.

I like to take this chance to thank all the experts in LCviews, since you have provided such good platform for the L/C users to discuss and learn, especially in the difficult time.

VV

24 April 2008

I have been thinking hard ... should I start this posting with a happy or angry smiley??

Simply can not decide ... so I will do this posting without any kind of graphics whatsoever. So read my words!

In my previous posting I mentioned a number of issues to be discussed at the Athens meeting in the ICC Banking Commission. Looking at those alone - the angry smiley is no far away ...

Here is some kind of overview:

Sanctions:
The ICC will work further on this one. The initial opinion given will not stand - as this issue will not be "answered" in the form of an official opinion. Form and time frame is unknown (to me at least).

Signature in lieu of a barcode on courier receipts:

The part of the question dealing specifically with this issue will (as far as I am informed) be removed from the official opinion – as this is not asked for in the question …

Bills of lading allowing the shipping lines to release the goods without one original being presented:

The Query will be sent to the ICC Commissions on “Logistics and Transport” and “Commercial Law and Practice” – so answer still pending …

So on these central issues – no answer was given. I must admit that that left me a bit disappointed – but then one must of course focus on the positive side of things: Many good answers were in fact given – it was a truly enjoy full meeting – and perhaps more important:

3 new books on LCs were published:

Users’ Handbook for Documentary Credits under UCP 600
By Prof. John Dolan and Walter (Buddy) Baker

The Complete UCP - Uniform Customs and Practice for Documentary Credits
Texts, Rules and History 1920-2007
Written and Compiled by Dan Taylor

Insights into UCP 600
Collected Articles from DCI 2003 to 2008
Edited by Ron Katz

Especially the latter is interesting from the perspective of lcviews, as quite a few lcviews editorial board members are represented:

T.O. Lee

N.D. George

Pavel Andrle

Donald R. Smith

Kim Christensen

Pradeep Taneja

Not bad at all!

URDG Revision

Also on the agenda at the ICC meeting in Athens was the revision on the URDG. At some point in time I asked if lcviews should cover that one. A few answers supported this – so we will soon open a page – as a minimum reporting from the process. Look out for the page … coming soon.

The simplest document in the world

Last but not least – I received a simple question – that did create some headache for me – and I would like to share it with you – and of course highly appreciate any comments you may have:

A new provision to the UCP 600 is sub-article 14(f) that reads:

If a credit requires presentation of a document other than a transport document, insurance document or commercial invoice, without stipulating by whom the document is to be issued or its data content, banks will accept the document as presented if its content appears to fulfil the function of the required document and otherwise complies with sub-article 14 (d).

Regarding the phrase “fulfil the function” … what does that mean exactly? And perhaps more interesting: Is this provision effectively changing document examination principles?

The case I got was the following: When the LC calls for a “packing list” – then it should be examined according to 14(f), and what would be the “required function” of a packing list?

Most likely that the document must show the “packing details”. And what does that mean? Does it mean that the document must show the “packing units” – e.g. “crates”, “packages”, “cartons” or “pallets”?

Not really having thought about too deep before, I would (personal) interpret this somewhat wide – i.e. certainly not look for the type of packaging that has been used. I guess that my general angle would be that as long as the packing list shows the goods shipped - then there should be something extraordinary if it could in fact be refused.

So if for example it is titled "packing list" (knowing full well the rule on document titles) showing the exact same goods description as the invoice - I would normally accept it.

I know that the above it is indeed arguable - but it is the practice I see every day - and the only problems I see is where:

1. There is an obvious conflict between the data in the packing list and other documents and/or the LC
    

2. There is a precise requirement to the packing list spelled out in the LC - that is somehow not complied with.

What do you think? How to examine a packing list – the simplest document in the world?

Best regards

Kim

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9 April 2008

There is now less than one week to the meeting in the ICC Banking Commission, and it is the same as always; trying to find out who is attending – discussing the topics that will be up for discussion at the meeting etc. etc.

One discussion of particular interest to me is the ICC Opinion regarding sanctions – i.e. where an issuing bank refused to honour complying documents due to sanctions. The potential consequences of that one are huge … and I fear for the final outcome …

There is another question up – that although not a major issue – to me is of a very principal nature.

The scenario is an LC calling for “courier receipt showing that copy documents have been sent to the applicant” or similar, and the document presented does not show any signature – only a bar code. The reason that I consider this a very principal issue is that it seems to me that the “challenge” is that current practice seems somewhat far from the current rules.

In such circumstances what would be the correct approach:

1. Either to “interpret” the rules according to practice
   (opening a new door for interpretations: does this apply to other documents as well?)
   
   – or –
    
2. Require that the wording of the LC supports practice – in this case clearly allows for a receipt showing a bar code in lieu of a signature
   (opening for potentially silly refusals)

Working at a place where we have the possibility of printing our courier “receipts” ourselves – I must admit that I tent to lean towards possibility #2 – i.e. that the LC must clearly allow for such. The reason is that I see many “receipts” being printed every day – and not used – it may be because of a wrong address – in any case it is thrown out. This means that the formal receipt by the courier company is given when registered by the bar code reader, when the pouch is picked up – until then it is just printed … i.e. nor really a receipt of anything ...

Also of interest is a question about bills of lading allowing the shipping lines to release the goods without one original being presented. E.g. a wording like the following “If the carrier so requires, one original bill of lading must be surrendered in exchange for the goods..”

No preliminary answer has been given – rather the ICC have been seeking the advice of the National ICC Committees on how to proceed. It is still not at all clear what will be the outcome at the meeting. The most likely result is that there will be no answer – as “such issues are not for bankers to determine”. I surely hope that I will be in for a surprise though – as this issue is a real problem out there in the real world; some banks are refusing based on this – while others are accepting it. So in my perspective any clear answer will be a benefit to the LC community.

Mr. T.O. Lee has written a rather comprehensive article on this issue titled “HOW TO RESOLVE THE DELIVERY CLAUSE PROBLEM IN A BILL OF LADING” – published in the latest issue of LC Monitor (Volume 10, Issue 1, January - March 2008).

This issue was also touched upon by Mr. Gary Collyer at the Coastline Solutions newsletter number 14
(http://www.coastlinesolutions.com/news13.htm).

Speaking of that one – a new issue has just been released:

http://www.coastlinesolutions.com/news.htm  

with the poetic title “To refuse or not to refuse!” …

As the title so indicates the newsletter addresses UCP 600 article 16 – going through the process of how to make a “correct” refusal of LC documents – pinpointing pitfalls and traps and giving good advice. It is in my view a very good and practical walk through one of the core UCP 600 articles.

It is hereby recommended!

Not too long ago – such information was simply not available in the public space. Now it is – free of charge – just one click away. Gosh I love the internet

See you again – after Athens …

Best regards

Kim

[submit your comments]

27 March 2008
 

Today we have published the last article in the promised “Transport Series” by Mr. Vlad Cioarec. Personally it has been a pure thrill following these articles – and on behalf on lcviews I would like to thank Mr. Vlad Cioarec. I feel confident that the readers of lcviews have enjoyed those as well.

Besides that our Single Window service is surely gaining momentum. A steady flow of great questions keeps coming in. We appreciate that – and do our best to answer all questions as fast as we can. We do however ask you patience … we will reply as soon as we can, but can not promise any time frame …

According to UN/CEFACT, a "single window" is defined as «(...) a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfil all import, export, and transit-related regulatory requirements».

Soon we enter the month of April – which this year is a special month for the LC community. The reason is that the ICC Banking Commission will meet in Athens – and I know that many members and readers of lcviews will participate. Besides some fairly interesting “Opinions” – a main part of the agenda is dedicated to “Rules”. There will be given status reports on the revision on URDG and Incoterms as well as URR (Which has been revised to be in line with UCP 600). In the lcviews editorial board we are considering covering the revision of the URDG – the ICC rules for demand guarantees. We will of course only do that if there is a desire amongst the readers of lcviews to read about that one. At this point in time we do not see this need (??) – but seek your view on this: Would you recommend that we dedicate some space on lcviews for this work? Kindly use the link below and let us have your comment.

Best regards

Kim

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6 March 2008
 

Question: How to get a perfect answer? Question: How to get perfect quality?

It is obvious to anyone following lcviews that the “Single Window Q&A” page is a huge success. It goes without saying that the editorial board is very pleased with that. At the same time we are fully aware that providing such service demands great respect and responsibility. Although all of us do what we do because we love it – we are serious about it: We want to give perfect quality to the persons submitting questions – and of course to you – the readers of lcviews.

This leads me to the two rhetorical questions opening this posting: We want to give perfect quality – but that requires a certain standard of the questions. We have felt the need to update the “terms” for submitting a question – but also we have added a new page: “How to make a perfect submission?” – providing guidelines when asking a question. At the same time we have made it possible to submit questions via a simple e-mail – e.g. allowing for enclosures.

We hope that you appreciate this initiative – and I will end this posting with my answers to the two questions asked above:

	Question: How to get a perfect answer? Answer: Ask the perfect question!
	Question: How to get perfect quality? Answer: Give perfect quality!

Best regards

Kim

[submit your comments]

29 February 2008

I have the pleasure of introducing Mr. Vlad Cioarec (picture above) and a brand new page on lcviews.com: En route. The two are happily connected: It so happens that Mr. Cioarec generously has provided a number of articles for lcviews. All of those deal with transport vis-à-vis LCs. It is no coincidence that I mention “Transport” first – as the starting point for Mr. Cioarec – is exactly transport. In my view this makes his articles unique to lcviews – where the majority of contributors have an LC background – and view transport from that perspective. In other words Mr. Cioarec allows the readers of lcviews a fine insight into the real transport practice.

The first article “Multimodal transport documents and the UCP 600 - Frequently asked questions on the MMTD document” is available now on the new page “En route”. During the month of March one article by Mr. Cioarec will be published each week on lcviews – so look out for those – and not least: Please let Mr. Cioarec and the other readers of lcviews have your views, comments or questions.

A bio of Mr. Cioarec is available in “Who’s Who in LC World”

“En route” is built on the recognition that transport is an area that is a source of constant confusion for the LC banker. It tries to provide practical answers and guidance to some of the challenges that the LC banker and their customers meet in their daily lives. Of course the intention is that this section will grow – in order to become a valuable source for understanding the transport industry. I hope you enjoy it. Personally I am thrilled!

Happy reading – see you in March.

Best regards

Kim

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19 February 2008

I am sure that you have noted a change in lcviews.com. We have changed the design of the pages slightly. The reason is that some readers have noted that the text was hard to read on the blue background. Personally I loved that blue background – but of course it is very important that it is easy to read the pages. In other words we have chosen “readability” to “sexy pages” :-)

We have been through every single page on the website in the process – so if you encounter bugs – or something that looks odd – kindly drop us an e-mail.

So what is new on the LC side … well still new questions and new material keep coming in … so keep an eye on the website ….

Thanks and see you soon.

Kim

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10 February 2008
 

Dear lcviews reader,

A misspelling or typing error that does not affect the meaning of a word or the sentence in which it occurs, does not make a document discrepant. For example, a description of the merchandise as “mashine” instead of “machine”, “fountan pen” instead of “fountain pen” or “modle” instead of “model” would not make the document discrepant. However, a description as “model 123” instead of “model 321” would not be regarded as a typing error and would constitute a discrepancy.

[And I should add that my very clever MS Word spelling tool did in fact identify the 3 intentional spelling mistakes]

This is actually one of the paragraphs that some LC users do find a bit troublesome; when will a spelling mistake affect the meaning – and who is to decide? For me it is pure bless to have such paragraph: Of course you should not refuse a presentation of USD 1000000000 because the beneficiary wrote “mashine” instead of “machine” …. when it is apparent that the right goods have been sent at the right time.

There is a huge focus on mistakes – that may change focus from what it should be. It seems to me this focus on mistakes has the consequence that many people are afraid of making them – hence afraid of taking chances, and also afraid of admitting the mistakes they have made. I for one believe that removing ISBP (2003) paragraph 82 (Hong Kong versus Hong Kong CY) was a clear mistake – but I have not heard anyone admitting that (??)

On lcviews.com we are not afraid of making mistakes – and admitting the mistakes that we do :-)

An example:

Just the other day – I was updating the website – we had 5 Single Window Q&As ready for upload (#26-30) – and all of a sudden 3 new questions popped in. It was a bit late in the evening but I thought: Well – lets include those 3 in the “package” so I answered immediately – and the upload then included 8 Q&As; which is actually quite many – taken into account that all members of the lcviews editorial board have other – primary jobs – and lcviews tasks are done in their free time.

One of the uploaded questions was # 32 ( http://www.lcviews.com/swq_32.htm  )

The question was:

My answer was – in short – that it is acceptable that a bill of lading shows a place of final delivery in addition to the port of discharge as stated in the LC.

Quite soon after the page was published I received the following kind and helpful message:

The truth was – that I had not “forgotten” that one – but I did not even come around to consider it!! And of course that one was very relevant here – but my sole focus was the place of final destination …

So there you have it: A mistake – and one that actually matters! As you can see from the answer available now – I did in fact take in the good advice – and changed my answer.

The points I am trying to make with this example is that:

1. We work – hence we make mistakes.
2. We do not strive for mistakes – but we are not afraid of them.
3. When we make mistakes – we are not afraid to admit it.
4. When we make mistakes – we correct them of course!!

So there you have it!

In line with the above: In the message where I announced the upload of the 8 Single Window Q&As I quoted two great jokes kindly received from T.O. Lee. I repeat those here – this time without the typos :-)

All from me this time. Comments are of course most welcome.

Best regards

Kim

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31 January 2008

January …. where I come from January is more or less identical to ”grey”, ”cold”, ”tired” and similar expressions. For the LC community I must admit though that January has been a truly great month…

Here on lcviews.com we have had a busy month. We have opened “Traders Corner”, published an original interview with Mr. Bogdan Ilie – as well as other original articles – not to mention a number of Single Window Q&As. In other words 2008 have started just perfect – and we still have lots of good stuff just waiting to be shared.

Also looking beyond our own pages – there are lots to report.

ICC’s Trade Finance publication DCInsight presented itself in a brand new design (Vol 14, no 1 – January – March 2008). It is surely a professional and well thought out design – but I guess you could say that on the content side – nothing has really changed … and thank you for that! There are still a number of good articles written by really good authors. Let me mention a few:

Radek Dobás has made a survey amongst banks in Central and Eastern Europe on how they have implemented the UCP 600 (Issues ands question marks).

Pavel Andrle – lcviews.com editor – explores the unfortunate trend that some banks have of excluding UCP 600 provisions (Excluding articles: a troublesome trend).

Frank Reynolds and Donald Smith – lcviews.com editor –reports on the reactions from the customers when presenting the UCP 600 across the USA. Really interesting and insightful  (Reports from the UCP seminars (part 2)).

Also very interesting is an interview with Farideh Tazhibi on the revision on the URDG – with special focus on Iran. After reading that, one is really eager to get hold of a draft of the “URDG under revision”. I hope it will be out soon (The URDG and demand guarantees in Iran).

My personal favourite however is the article by Bill Cameron. His outset is the great eye-opening book “The world is Flat” by Thomas L. Friedman. Bills great (and actually very simple) conclusion is that the banking community is living in a vertical world, while our clients are increasingly living in a flat world … more of that please! (Needed: modern cross-border payment solutions)

Then I have a small article trying to analyse how the banking community perceives “shipment” ….(The anatomy of “shipment” in L/C transactions)

Finally I need to mention the Swedish country report written by my dear colleague Hossein Moezzi. I so enjoy his writing; he cuts right to the bone – and says out loud what most people is only thinking or whispering.

[Link to DCInsight: click here]
[Info on Thomas L. Friedman: Click here]
 

BUT THAT IS NOT ALL … LC Monitor published their Volume 9, Issue 4, October - December 2007 issue, and also here there is good stuff for LC hungry readers. Just to mention a few:

The great Vincent O’Brien continues his Doc. Credit Clinic – still in pursuit of the Article 20 controversy – i.e. the UCP 600 requirement for on board notations when the bill of lading shows a place of receipt different from the port of loading. At least for one of the answers I am not totally convinced that he reaches the same conclusion as the ICC Banking Commission would, but he would have my backup for sure!

I have taken the task of showing that LCs often contains far too much unnecessary information.  I hope someone will listen. It would surely make my life easier :-) (Discrepancies Exposed: Making L/Cs Simple).

T.O. Lee – lcviews.com Technical Adviser – have an – as always – insightful article  – which takes the reader through the UCP 600 pinpointing the places where there is a mismatch between industry practice and the UCP 600. Surely one to learn from! (Anomalies in UCP 600 articles).

[Link to LC Monitor: click here]

BUT THAT IS NOT ALL AT ALL as LC Monitor launched a newsletter: Trade Services Update. It is Co-edited by Zahoor N. Dattu and myself (again lcviews.com editors) – I need not describe this as it is fully available here:

//www.lcmonitor.com/lcm_newsletter_req.htm

where it is also possible to sign up for the next issues (the February issue is out soon – hours rather than days).

AND DO YOU THINK THAT IS ALL ??… well it is not … because in other remote places on the internet there are people with the same interest. Let me just mention the letterofcreditforum where you can always find – and participate in – a good discussion.

So what can I say: January has been a great month, not least for lcviews.com … just note the way that lcviews.com (via the editorial board members) has been everywhere …who can ask for more??

My best regards and see you in February.

Kim

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Editors Journal 2007