Transport Documents and the Bill of Lading Under UCP 600
Banks never see the goods, only the transport document. Here is how they examine it.
Under a letter of credit, the bank never sees the goods. It sees a transport document that says the goods were taken in charge or shipped, by whom, from where and to where. UCP 600 gives each type of transport document its own article, and ISBP sets out how banks examine them.
The bill of lading gets the most attention because it is usually the only one that is also a document of title: whoever holds a properly endorsed original can claim the goods. That is why issuing banks insist on it, and why discrepancies in it are expensive.
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UCP 600 Transport Document Articles
19
Document
Transport document covering at least two different modes (multimodal or combined)
Typical use
Container moved by road and sea, place of receipt inland
20
Document
Bill of lading
Typical use
Port-to-port sea shipment
21
Document
Non-negotiable sea waybill
Typical use
Sea shipment where title control is not needed
22
Document
Charter party bill of lading
Typical use
Bulk cargo on a chartered vessel
23
Document
Air transport document
Typical use
Air freight
24
Document
Road, rail or inland waterway transport documents
Typical use
Land and river movements
25
Document
Courier receipt, post receipt or certificate of posting
Typical use
Samples and small consignments
| Article | Document | Typical use |
|---|---|---|
| 19 | Transport document covering at least two different modes (multimodal or combined) | Container moved by road and sea, place of receipt inland |
| 20 | Bill of lading | Port-to-port sea shipment |
| 21 | Non-negotiable sea waybill | Sea shipment where title control is not needed |
| 22 | Charter party bill of lading | Bulk cargo on a chartered vessel |
| 23 | Air transport document | Air freight |
| 24 | Road, rail or inland waterway transport documents | Land and river movements |
| 25 | Courier receipt, post receipt or certificate of posting | Samples and small consignments |
Which Article Applies
The article is chosen by the shipment the credit describes, not by the title printed on the document. ICC guidance is that any document a credit calls a "bill of lading" for a port-to-port shipment is examined under article 20, however it is named. A bill of lading need not be titled "ocean" or "marine" to qualify.
If the credit calls for a multimodal document, article 19 applies. Under article 19(c)(ii), a document showing that transhipment will or may take place is acceptable even if the credit prohibits transhipment. A document indicating it is subject to a charter party is a charter party bill of lading under article 22, and a bill of lading presented under article 20 must not contain any charter party indication.
What Banks Check on an Article 20 Bill of Lading
- checkCarrier named and identified as carrier; signed by the carrier, the master, or a named agent for either
- checkGoods shown as shipped on board a named vessel at the port of loading stated in the credit, by pre-printed wording or a dated on-board notation
- checkPort of loading and port of discharge as stated in the credit
- checkNumber of originals issued indicated; the full set presented if the credit requires it. Originals marked "first original" or "duplicate" are all originals
- checkIf issued "to order" or "to order of the shipper", endorsed by or for the shipper
- checkNo charter party indication
- checkClean: no clause expressly declaring a defective condition of the goods or packaging
- checkGoods description may be in general terms, provided it does not conflict with the credit
Scenario questions on B/L compliance. No signup.
Terms That Generate Discrepancies
- On-board notation
- A dated statement that goods were loaded on a named vessel at the port of loading. Needed when the pre-printed wording does not already make this clear, typically when the B/L shows a place of receipt different from the port of loading. With pre-printed "shipped on board" wording, the issue date is treated as the shipment date unless a separate dated notation appears.
- Clean transport document
- One with no clause or notation expressly declaring a defective condition of the goods or packaging. The word "clean" need not appear on it, and deleting the word does not make it unclean.
- Transhipment
- Unloading from one vessel and reloading to another between the ports of loading and discharge stated in the credit. If the document does not show this, there is no transhipment.
- Freight notation
- A statement on freight, such as "freight prepaid" or "freight collect". It need not use the credit's exact words but must not conflict with the credit or other documents. It should match the trade term: CIF and CFR shipments usually show freight prepaid.
- Stale documents
- Documents presented after the presentation period. Unless the credit sets a period, presentation must be made within 21 days after shipment, and in any case not later than the expiry date.
ISBP 745 or ISBP 821?
The CCFE syllabus and courseware cite ISBP 745 (2013). ICC published ISBP 821 in July 2023, aligning ISBP with ICC Opinions issued since 2013. The transport document principles above are common to both. Answer exam questions from the ISBP 745 framing; in branch work, check which revision your bank's credits reference.
How CCFE Tests This
Expect short scenario questions: a credit term, a document detail, and a choice of whether it complies.
- check_circleArticle matching: give the document, pick the article. The trap is choosing article 19 for a port-to-port B/L because it shows a place of receipt.
- check_circleClean versus claused: only a clause that expressly declares a defect in the goods or packaging makes a document unclean. Candidates over-reject on softer wording.
- check_circleThe word "clean": its absence is not a discrepancy.
- check_circleSigning: a B/L signed by an agent must show the agent is signing for the carrier or master.
- check_circleFreight terms against Incoterms: "freight collect" on a CIF shipment is the classic inconsistency.
FAQs
Which UCP 600 article covers the bill of lading?expand_more
Article 20 covers the bill of lading for port-to-port shipment. Articles 19 to 25 cover the other transport documents, from multimodal documents to courier receipts.
What is a clean bill of lading?expand_more
A bill of lading with no clause expressly declaring a defective condition of the goods or their packaging. The word "clean" does not have to appear on the document.
What is the difference between a bill of lading and a sea waybill?expand_more
A bill of lading can be made out to order and endorsed, so it works as a document of title. A sea waybill is non-negotiable: goods are released to the named consignee, so it gives the bank no control over the cargo.
Within how many days must a bill of lading be presented under an LC?expand_more
Within the period the credit states. If the credit is silent, UCP 600 requires presentation within 21 calendar days after shipment, and never later than the credit's expiry date.
Next steps
- ISBP 745arrow_forward
- LC Discrepanciesarrow_forward
- Incotermsarrow_forward
- UCP 600 Key Articlesarrow_forward
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