lcviews CoronAdvice #8: Signatures and the issue of originality
The new blogpost in the segment “lcviews CoronAdvice” aims to address one of the questions frequently asked during the clovid-19 crises: Is it possible to change the place where the documents are being printed? E.g. to a bank – this to avoid having to forward them in paper form. This would not be the “full” electronic solution (as discussed in “lcviews CoronAdvice #6: Electronic presentations under LCs and Collections”) but a more interim solution to tackle the situation at hand.
The are many rules and practices under the UCP 600, ISBP 745 as well as ICC Opinions concerning the issue or signatures and originality, and there are for sure room for “smart” solutions; as long as the parties agree to it. For example, the involved banks should agree to receive the documents in electronic form; most likely via (more or less secure) e-mail. This of course – in itself – opens for new challenges. Those will not be addressed here.
The issue or originality according to UCP 600:
UCP 600 article 17 addresses the issue of original documents versus copy documents.
The article has a direct and pragmatic approach to the issue of originals and copies. First of all, it makes it clear that at least one original of each document stipulated in the credit must be presented (sub-article 17(a)).
Then it lists the number of ways a document can be made original. Namely a document that:
* Bears an apparently original signature, mark, stamp, or label of the issuer of the document, or
* Appears to be written, typed, perforated or stamped by the document issuer’s hand; or
* Appears to be on the document issuer’s original stationery; or states that it is original
There are in other words many ways by which a document may be considered original for the purpose of UCP 600 – regardless how it has been produced. For example, it could simply state that it is “original”.
UCP 600 article 17 is qualified by ISBP 745 paragraph A27, which underlines that a document that bears an apparently original signature, mark, stamp or label of the issuer is considered an original. This regardless how the signature, mark, stamp or label has been applied to the document.
Signatures according to UCP 600:
For some documents presented under documentary credits, it is not “enough” that they are original (as defined above) – they must also be “signed”. This is for example the case when it comes to transport documents – such as bills of lading (UCP 600 article 20(a)(i)), or insurance documents (UCP 600 article 28(a)). However, also certificates and declarations must be “signed” (ISBP 745 paragraph A3).
UCP 600 Article 03¶03 (Interpretations) defines what is meant when a document presented under a documentary credit is to be signed. According to the article, this can be achieved a number of ways, i.e.:
* By handwriting
* By facsimile signature
* By perforated signature
* By stamp
* By symbol or
* By any other mechanical or electronic method of authentication
Also here, it is important to understand that for the purpose of UCP 600; “signing” should be understood in the widest possible manner – and not limited to signing a document with a pen using wet ink.
This is emphasised by some ICC Opinions published on the matter, for example:
Official ICC Opinion R636 / TA668rev - 2005-2008:
Requirement in the documentary credit: “Beneficiary’s certificate along with relevant courier receipt certifying xxx”
The presented courier receipt was not signed, and there was no signature space included on the document.
The conclusion from the ICC was that because the courier receipt had no signature space – the document does not require such evidence. Hence the courier receipt was deemed acceptable.
Likewise, ISBP 745 paragraph A35(d) (which is based upon Official ICC Opinion R745 / TA737rev - 2009-2011) offers an example of “a form of electronic method of authentication” (as mentioned in UCP 600 article 03¶03 (Interpretations)). Namely through the example of a document presented that includes a statement to the effect that authentication may be verified or obtained through a specific reference to a website (URL). The paragraph further states that banks will not access such websites to verify or obtain authentication.
Under what circumstances can a document be signed by a facsimile signature?
This is for example the signature that frequently appears on insurance documents. The insurance document (usually insurance certificates) is pre-printed and pre-signed by facsimile by the insurance company. The party completing the insurance document (often the beneficiary – but it may also be a freight forwarder) countersigns the document. Often such documents are not valid unless countersigned.
There is even an Official ICC Opinion analysing under what circumstances a stamp or chop may be regarded as a signature according to UCP, namely Official ICC Opinion R718 / TA691rev – 2009-2011). If the chop or stamp contains a signature the name of the person need not appear. Nor does any handwritten signature or name. For the purpose of UCP 600 Article 03¶03 (Interpretations) a “stamp” include a chop.
As can be seen from the above, there are different ways to achieve “originality” and comply with the requirement that a document must be “signed”. However, it is important to bear in mind that each document must be able to be used – for its intended purpose. Whether it is to obtain release of the goods – or clear the goods through customs. Therefore, simply “moving” the printer to the office of a bank may work for some of the documents like invoice and packing list. However, for other documents, like certificates issued by public authorities (in paper form) and bills of lading (in paper form) this may not work.
In that respect also the so-called “Mercury’ case” (R. (on the application of Mercury Tax Group and another) v. HMRC – UK - 2008) may be relevant. It suggests that one method to achieve a “signature” is to sign the document and then to scan it and then to email it for transmission. In essence the signature itself can be scanned-in, or a digital signature attached. The original document can then be sent at a later date. It is unsure if this method can be broadly applied – and no doubt it will depend on the document in question.
This however, adds to the “options” of using “semi-electronic” solutions.
From the above, it is fair to conclude that there for sure are room for “smart” solutions to bypass the problems in sending documents. However, such must be carefully considered on a case-by-case basis; meaning that the solution must support the required documents and also be acceptable to the involved parties; buyers, sellers and banks.
Last but not least a thorough introduction to original documents under UCP 600 can be found in the book “The Original Documents Controversy – from Glencore to the ICC Decision” by Professor James E. Byrne (ISBN 1-888870-21-4). Hereby highly recommended.
Takeaways:
* There are many ways by which a document may be considered original for the purpose of UCP 600.
* For the purpose of UCP 600; “signing” should be understood in the widest possible manner.
* There are for sure room for “smart” solutions to bypass the problems in sending documents. However, such must be carefully considered on a case-by-case basis; meaning that the solution must support the required documents and also be acceptable to the involved parties; buyers, sellers and banks.
Look out; more “lcviews CoronAdvice” to come.
Meanwhile – as always, take care of the LC – but take special care of each other during these difficult times.
Kind regards
Kim