New and newer ICC Opinions
We will take a short break from the “lcviews CoronAdvice”; but with a warning to start with: There will be some COVID-19 information in this blogpost.
However, let’s start looking back to 19 February 2020 when the world was still (kind of) normal. On that day, the ICC Banking Commission circulated the (then) new consolidated Draft Opinions, in the sequence TA898-901, for discussion at the April 2020 Banking Commission meeting (that was) to be held in Dubai (next week in fact). In the message, the ICC asked for comments to the Draft Opinions by the National Committees no later than 8 April 2020.
As you of course know the Dubai meeting was cancelled (or rather re-scheduled): On 12 March the ICC informed that “In light of the current outbreak of COVID-19 around the world, the Secretariat has to inform you that the ICC Banking Commission Annual Meeting in Dubai originally scheduled on 20-23 April 2020 will be rescheduled.”
Needless to say, the re-scheduling of the Dubai meeting has many consequences. One of those is that the process around the Draft Opinions has been “disrupted”. Following the comments from the ICC National Committees (with deadline 8 April), the “normal” procedure is so that the ICC Technical Advisors will suggest changes to the Draft Opinions. Those will then be discussed at the ICC Banking Commission Meeting, and adjusted subject to comments from the ICC National Committees.
This time however, since there is no meeting, the procedure has been changed. Earlier this week, the ICC circulated a PowerPoint presentation with the proposed changes to the Draft Opinions (subject to the written comments received from the ICC National Committees) asking for comments no later than 22 May 2020. Following that, it is expected that the final ICC Opinions (adjusted according to the comments received) are circulated.
From the PowerPoint it is clear that the number of comments has decreased. This time there are “only” comments from 18 National Committees. Usually the number of countries to comment on the Draft Opinions are around 30. Also interesting from the PowerPoint is that it offers a “trend” of the number of ICC Opinions from 2007 to 2019. The picture is that the number of Opinions “peaked” in 2009 (32 in total) – then there was a drop (to around 20), which level continued on to 2016. From 2016, there was a downwards trend on to 2018 with an all-time low: 7 Opinions. In 2019 the numbers started to raise again; and was back to 2 figures: 10.
There has been lots of discussions regarding the number of Opinions – and how to interpret the fluctuations over time. If there are “many”, you can argue that the rules and (already published) practice are not sufficiently clear. Too few may suggest a decreasing interest in the product. Or that there are no problems at all. That discussion is difficult, so I will just conclude that there is room for improvement. If not in the rules – then on how they are applied. This is – to a large degree – a training / guidance issue and the ICC (with heavy involvement from David Meynell – Senior Technical Adviser to the ICC Banking Commission) are actually doing progress. For example, by publishing a “Simplified Documentary Credit Template”. This is the right path; let’s all of us support that as much as we can.
The PowerPoint also offers insight as to the “themes/topics” covered by the ICC Opinions from 2007 to 2019. This must be topic for another blog post …
Ups – I went astray there … so back on track. Opinions! But is there more? The answer is, Yes!
Because, also earlier this week the ICC circulated Draft Opinion TA902. Ordinarily new Draft Opinions would not be sent to the ICC National Committees for comments until August and would be discussed at the October Banking Commission meeting. However, in view of the importance of the subject, the ICC considered it necessary to handle this particularly Opinion exceptionally. Therefore, comments to Draft Opinion TA902 are to be sent to the ICC no later than 22 May 2020.
And so, you may ask about the “importance of the subject” … and you guessed right: The Query relates to COVID-19! More particular to a new COVID-19 clause on a bill of lading.
The bill of lading clause in question reads:
“Following the exceptional measures adopted by various governments in relation to the outbreak of COVID-19 virus and the operational constraints resulting thereof, the Merchants are hereby notified that the carriage of cargo may be disrupted or delayed. Cargo may not be loaded on the intended vessel and may be on forwarded to the port of destination on any alternative vessel at Carrier’s sole discretion.
Furthermore in case of disruption of ports’ operations, the cargo may be discharged in an alternative port without notice and – subject to availability – be on forwarded to the original intended port of destination. Carrier reserve its rights to accomplish the bill of lading in any alternative port. All additional costs, including but not limited to storage, demurrage, plugging, monitoring at the alternative discharge port or extra on forwarding costs, shall be on Merchant’s account and payable before delivery and the carrier shall have no liability whatsoever for any loss or damage resulting thereof.”
The questions asked in the Query naturally relate to how (and if) to act when such clause appears in a bill of lading presented under an LC. Once the Opinion is final, it will be reported here.
All for now; and do remember to take especially care of each other – and the LC, during these troublesome times.
Kind regards
Kim