As per Article 14(d) of UCP600:
"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."
Now, I have got a certificate of origin which mentions only first 04(four) digits of the 08(eight) digit H.S. Code in the L/C, while all other documents mention all the 08(eight) digits as mentioned in the L/C.
Is it a discrepancy? Why or why not?
I need some answers please.
This is a clear discrepancy
Sir
This is a clear discrepancy. Because the H.S code on certificate of origin inconsistent with other L/C documents”.
Contact: tulsipillaiex@hotmail.com
Regards
Tulsi / Dubai
Incomplete H.S. Code
Moyaz,
It is not a discrepancy, COO most of the time shows the 4 digit of H.S.Code
If you are into export side, better to pick it up as a disp and ask bene to revise the dox.
Regards.
Incomplete H.S. Code
moyaz u sharif
Thank you Specialist.
Now, suppose I am into import side, and convey
this as a discrepancy to the presenting bank, and
it is not challenged by the presenting bank... what does it mean? Has presenting bank accepted it as a discrepancy?
Comment please.
Incomplete H.S. Code
yes.
if they didnt turned then it means tey hav accepted.
Incomplete H.S. Code
moyaz u sharif
As such, can the docs be returned?
Incomplete H.S Code
If the issuing bank is confident that the discrepancy is valid (and I believe it is), then provided it has issued a rejection notice in accordance with Art. 16 of UCP600, its sub-article, (c) (iii) (c) would allow the issuing bank to return the documents without further reference to the presenting bank.
Incomplete H.S. Code
is issuing bank not required to consult applicant first before sending back the docs?
if yes, then is it under UCP rules or just standard courtesy to the applicant and bene?
thanks.
Discrepant douments
In theory, under UCP, the issuing bank is not obliged to, but in practice, and for the sake of good order, it is likely to take the applicant's instructions, and advise the beneficiary/presenting bank before taking this action. However, it is always a last resort, when there is no likelihood that the applicant will take up the documents
C/O provides incomplete code
Based on the question the LC did not require the code to be stated on all documents. If this is true, the fact that the C/O did not have the complete code should not be a reason for refusal. The beneficiary can say it is all that is required by the Chamber or needed for a C/O or that the 4-digit code relates to something else. I do not believe that the discrepancy is valid nor do I believe that a court would uphold the discrepancy.
Incomplete H.S. Code
Tradeknowledge, I partially agree and need more clarification in regards to your opinion.
I see doc checkers picking up the above point as a discrepancy all the time, based on the conflict between docs not allowed rule, as someone has mentioned above.
If someone says, it is something else and not an HS code. but what if the C/O clearly writes H.S. Code 0987 and other docs showing H.S. Code 0987 6543.
as far as I know all countries use same H.S. Codes? but please correct me if am wrong and if H.S. Code is not complete, then C/O that is confirming that this certain product that was shipped is not 0987 6543 and it is only confirming that it is 0987, which let's assume is wood, which can be anything made out of wood, wood toy, home / kitchen wooden item. all that C/O is saying is that a wooden product was made in china , but not what kind of wood product and thereby creating conflict with other docs.
now again I agree if L/C did not require an H.S code, then it is not a dicrepancy. but often checkers when face with above situation (even if L/C did not require the code) will still pick this up as a disrepancy, cos such information is provided in docs and the code on different docs do not match.
Kindly comment.
four armed
Hello Mohkhan
(just in reply to your point...I regret I cannot add to the thread's main topic)
The first four numbers are always universal with WTO/WCO countries (a non-WTO state may use their own system and some countries run the HS along with a local parallel system - and sometimes the HS system dicates the first six numbers).
A participating country may add up to 6 further digits to a four-digit heading (or four to a six-digit heading) for local classification.
So, in your example, the prefix 09.87 may be common but the same product may be (say) 09.87.00.23.00 in your country but 09.87.00.01 in mine.
As your numbers vary from mine, certificates are often only drawn up with the first-four numbers as the local authority is rarely aware of the foreign country's additions numbers (if any) as there are so many local possibilities. Given that documents are used in countries other than the destination country – not least the country of origin but also of transit – it can be very confusing if more than four numbers are shown on the various documents. While calling for more than the first four numbers may be common-practice with the credit, it causes problems elsewhere.
cheers
phill doran
"...in armour bright, the merchant men..."
H S Code
I guess this will run and run, but for what it's worth, I reassert my opinion and agree that the discrepancy is valid. In the case of numbers (as opposed to words) typos or incompleteness would always be hard to argue for. But, I don't agree that the doctrine of consistency and non-conflict falls away, simply because the LC does not require a particular data to be evidenced on a document. Whether the LC requires it or not, data if shown, must be consistent. If the C/O simply evidences the number without prefacing it with 'H.S', one could argue that the number on the C/O is something else entirely different, and not the H.S. code, but when examined under the general concept of 'data read in context', and the consistency principle, in my opinion, it would not pass muster, neither under application of UCP, nor in the courts.
Incomplete H.S.Code
Thanks Phill Doran about your detailed reply, it really cleared up my misconception of HS codes being the same everywhere. a bit naive of me, now that I think of it.. and no apologies necessary please about the title of the replies as that is just a suggestion.
Thanks Abrar, based on your clearly put opinions, I would also be picking this up as discrepancy or leaving it alone, under the different situations that you elaborated on.