Name: Syed Murtuza

An LC issued subject to UCP 600 states under field 47A Additional conditions:"Third party documents are not acceptable".

Beneficiary of the LC:
m/s.Tradewell co.

Applicant of the LC:
m/s.Dealwell co.

Presentation of documents was made to the nominated bank and upon examination of the documents nominated bank has pointed out the discrepancy as ”Third Party documents presented".

All Documents (including B/L) forming part of the presentation were issued by the beneficiary of the LC – but shows Shipper/consignor as "m/s.Allwell co.".

Since 14k of the ucp-600 clearly states

The shipper or consignor of the goods indicated on any document need not be the beneficiary of the credit.

And since the documents such as invoice, packing list etc. are issued by the beneficiary of the credit, I need to know your opinion whether the discrepancy pointed out by the nominated bank is valid.

Dear Syed Murtuza,

If nothing else – this question highlights the main message that should be sent here:

Be precise in the LC – phrases like “third party documents …” SHOULD NOT be used as they are not defined in UCP 600. If used in a credit, their meaning should be made apparent!

ISBP § 21(c) describes the opposite scenario – i.e. “third party documents acceptable”. This is defined as follows:

all documents, excluding drafts but including invoices, may be issued by a party other than the beneficiary. If it is the intention of the issuing bank that the transport or other documents may

show a shipper other than the beneficiary, the clause is not necessary because it is already permitted by sub-article 14(k).

Note the reference to 14(k) – as you also indicate. Although I feel that the issuing bank should have been more precise, I think that such condition as you mention there effectively modify UCP 600 sub-article 14(k) – i.e. that the shipper in the B/L should be the beneficiary of the LC.

I hope this helps you.

Best regards
Kim