UCP 600 Article 22: Charter Party Bill of Lading — Amendment Implications

Introduction

When a documentary credit is amended to change from a standard bill of lading (Article 20) to a charter party bill of lading (Article 22), or vice versa, the implications are significant. This guide examines how amendments affecting the type of bill of lading required impact compliance, the examination process, and the rights and obligations of all parties.

Failure Mode Analysis

Failure Mode 1: Beneficiary Does Not Accept Amendment

Risk: The issuing bank amends the credit to require a charter party bill of lading. The beneficiary does not accept and presents a standard bill of lading under the original credit terms.

Impact: Under Article 10(d), the presentation must comply with the original credit terms. A standard bill of lading (Article 20) is compliant if the original credit required a bill of lading without charter party indication.

Failure Mode 2: Confusion Over Document Type After Amendment

Risk: The credit is amended to require a standard bill of lading (Article 20), but the beneficiary presents a charter party bill of lading (Article 22) because the vessel is chartered.

Impact: Under Article 14(a), the bank examines documents against the credit as amended. A charter party bill of lading is discrepant when the credit requires a standard bill of lading.

Failure Mode 3: Charter Party Indication Required After Amendment

Risk: The credit is amended to require a charter party bill of lading, but the beneficiary presents a standard bill of lading that does not indicate a charter party.

Impact: Article 22(a) requires the bill of lading to indicate it is subject to a charter party. A standard bill of lading does not satisfy this requirement.

Failure Mode 4: Port Changes in Amendment

Risk: The amendment changes the ports, but the charter party already specifies different ports. The bill of lading reflects the charter party ports.

Impact: Article 22(b)(iii) and (iv) require the ports as stipulated in the credit. The charter party ports do not override the amended credit requirements.

Deterministic Resolution Architecture

Resolution 1: Amendment Acceptance Protocol

When receiving an amendment changing the document type:
1. Review the full amendment text
2. Determine whether compliance is possible within existing terms
3. If additional changes are needed, request a further amendment
4. Formally accept or reject in writing

Resolution 2: Document Type Reconciliation

After accepting an amendment:
1. Verify whether the credit now requires Article 20 or Article 22
2. Prepare the correct document type
3. If Article 22, ensure the bill of lading indicates it is subject to a charter party
4. If Article 20, ensure the bill of lading does NOT contain a charter party reference

Resolution 3: Charter Party Availability Check

If the amendment requires a charter party bill of lading:
1. Confirm a charter party arrangement exists
2. Verify the charter party covers the required shipment
3. Ensure the bill of lading references the charter party

If the amendment requires a standard bill of lading:
1. Confirm the carrier can issue a standard bill of lading
2. Ensure no charter party reference appears on the document

Resolution 4: Amendment Date vs. Shipment Date Check

Before accepting an amendment:
1. Compare the amendment date against the latest shipment date
2. Determine whether the amended shipment period is valid
3. Request a shipment date extension if needed

Resolution 5: Bank Examination Under Amendment

When examining documents under an amended credit:
1. Identify the governing version of the credit
2. Verify the document type matches the amendment
3. Apply the same examination standard as for original credits

Resolution 6: Communication Protocol

For amendments changing document type:
1. The issuing bank must clearly state the new requirement
2. The advising bank must accurately convey the amendment
3. The beneficiary must acknowledge and accept
4. The nominated bank must be informed

Resolution 7: Partial Amendment Processing

If the credit contains multiple amendments:
1. Determine the latest effective version
2. Confirm all prior amendments have been accepted
3. Verify the cumulative effect on document requirements

Conclusion

Amendments that change between standard bills of lading (Article 20) and charter party bills of lading (Article 22) have significant implications. The key rule is that the credit as amended (or the original credit if the amendment is not accepted) governs the presentation. Practitioners must carefully track amendment status and ensure the document type presented matches the governing version.

Frequently Asked Questions

1. What happens if the beneficiary presents a charter party bill of lading after the credit is amended to require a standard bill of lading?

If the beneficiary accepted the amendment, the charter party bill of lading is discrepant. If the beneficiary did not accept, the original credit terms govern.

2. Can the issuing bank amend the credit to require both types of bills of lading?

This would be unusual and potentially contradictory. The credit should specify one type.

3. Does the beneficiary need to return the original credit when accepting an amendment?

UCP 600 does not require return of the original credit. The amendment becomes part of the credit upon acceptance.

4. Can a confirming bank refuse to advise an amendment?

Yes. A confirming bank is not obligated to advise an amendment.

5. What if the amendment changes the credit from irrevocable to revocable?

UCP 600 does not permit revocable credits. Such an amendment would be invalid.

Source Notes

Context only. This guide is based on UCP 600 Articles 10, 20, and 22 (ICC Publication No. 600), ISBP 745 (ICC Publication No. 745), and eUCP Version 2.1. Source references in the search results pointed to general ICC Academy and UCP 600 e-book pages, which provided contextual framing but not article-specific text.