Third Party Documents

Actually in summary of some of the different opinions from your experts, 

I have made the following opinions extract from them :

Article 18(a)(i) of UCP 600 stipulated that commercial invoice has to be issued by the beneficiary.

According to ISBP21c, “3rd party documents acceptable” means all documents excluding drafts but including invoices may be issued by a party other than the bane. 

This clause allows invoices and the documents whose issuers have not been specified in the LC to be issued by a 3rd party. 

For example, if an LC accepts 3rd party documents and requires the following documents, 

(1) Invoice 

(2) Full set BL consigned to order and blank endorsed ..... 

(3) Insurance certificate in duplicate and blank endorsed ..... 

(4) Beneficiary's certificate certifying that ...... 

(5) Certificate of origin issued by Hong Kong Chamber of Commerce 

(6) Inspection certificate issued by the manufacturer 

(7) Packing list 

only the invoice and the packing list may be issued by a 3rd party. The bene certificate has yet to be issued by the bene. 

In conclusion, bene certificates must still be issued by the bene even if the LC has the clause.

"Third party" is a term not defined by UCP. Therefore, recognizing that the term has entered common usage, ISBP para. 21 has attempted to address this issue by stating that if the LC does not define "third party" (in the context of "third party documents acceptable") it shall mean that all documents including invoice, but excluding drafts, may be issued by a party other than the beneficiary. However, where the LC prescribes that certain documents must be issued by the beneficiary (i.e beneficiary's certificate) the "third party"provision does not override this requirement. So, in this case the certificate must be issued by the beneficiary, notwithstanding the "third party" provision. 

If the beneficiary’s cert. is issued by third party, then we shall raise the discrepancy, such discrepancy would not be in conflict with Art 14 (f) of UCP600. This article refers to the situation where a document is called for but does not stipulate by whom it is to be issued. In the case of a "beneficiary's certificate" it is clear that only the beneficiary can issue the certificate. 

With reference to ISBP para 21c, we would have to infer that 3rd party documents, are defined as all documents, except draft. But Art. 19-22 and Art, 28 of UCP600 prescribes that B/Ls must be issued by an identified carrier, and that the insurance document must be issued by an insurance company, or underwriter, or agent, or proxies. The reference to 3rd parties cannot therefore include these documents (unless the above articles are excluded,and specifically substituted with alternatives). 

1. If LC is silent with regard to 3rd party documents, all the provisions of UCP apply, including allowance for documents to show a consignor as a party other than the beneficiary.

2. If LC states 'third party documents acceptable', all the above in Point 1 applies, but additionally, invoices may be issued by a party other than the beneficiary. However, if LC stipulates that a specific document is to be issued by the beneficiary, this has to be complied with. It goes without saying, documents such as B/Ls, insurance documents, customs documents, etc, must be issued by the carrier, insurance company, or the relevant bodies, as appropriate.

3. If LC states ' third party documents not acceptable, all the conditions in UCP600 apply, except that where applicable, documents may only evidence the beneficiary as consignor and no other party. 

I beleive that this phrase does not automatically override article 14(K) of UCP600. If this was the intention of the issuing bank, it should have stated expressely in the credit. The condition " Third party documents are not acceptable" is a mere reinstatement of the fact that any third party other than beneficiary of the credit are not allowed to issue any documents , however not overriding what called for in the credit.

a requirement to "third party documents not allowed" does not automatically overide Art 14k of UCP600, and therefore a consignor other than the beneficiary would be alllowed, unless Art 14k was expressly deleted. 

third party docx is in sence of issuer of docs but b/l issued by shipping co.not issued by shipper,so b/l shown shipper other than bene is not use in sence of third party issuer of doc.

All other documents (B/L, Ins.Cert, C/O) would in any case be deeemed as third party documents, and would be expected to be issued by a party other than the beneficiary. 

So by default, in the absence of any clauses referring to allowance of "third party" documents, the LC would require invoices to be drawn up the beneficiary, transport documents to be issued by a "carrier", and insurance documents to be issued by an insurance co. Consignor of the goods may also be shown as being a party other than the beneficiary. 

In conclusion,

(a) “Third party documents acceptable” may still be elaborated by ISBP681 Paragraph 21c.

(b) “Third party documents NOT acceptable” may not be the opposite of Paragraph 21c and must be clarified with the issuing bank. The clause has to be rephrased after the clarification. We can never advise or confirm the LC with the clause.

In my observation, we find normally following term

Third Party Documents not acceptable. Since, Third party documents in non-defined expression and if we are confirming these LCs, then we go back to issuing bank and ask them to clarify which are the third party documents not acceptable to them.

We find this trend normally in LCs coming from various Indian Banks and especially coming from South Indian branches of Indian Banks.