Non-documentary condition in LC and data-conflict

Conflict of data or ‘data conflict’ is a unique concept in the annals of documentary credit operations. It’s defined by sub-article 14(d) of UCP 600. Conflict of data has an annoying habit of sneaking in and trapping the unwary exporter or banker to upset the smooth flow of a transaction. One the one hand it concerns non-documentary conditions in a credit vis-à-vis the data in documents that form part of a presentation. On the other, it’s about inter-se consistency among the documents presented as also the credit The issue of data conflict under a non-documentary condition is addressed by Section A26 of ISBP 745 which states thus:

When a credit contains a condition without stipulating a document to indicate compliance therewith (“non-documentary condition”), compliance with such condition need not be evidenced on any stipulated document. However, data contained in a stipulated document are not to be in conflict with the non-documentary condition. For example, when a credit indicates “packing in wooden cases” without indicating that such data is to appear on any stipulated document, a statement in any stipulated document indicating a different type of packing is considered to be a conflict of data. (emphasis added)

Conflict of data as a concept still retains an aura of mystery in our minds. Hence the ISBP goes to great lengths to clarify this point about data-conflict. There are examples galore, of which only two are quoted below: .....(continued)

[This article is continued in the book 'Beyond Trade Finance', published on 13-Apr-2021 by Notion Press, and available at https://notionpress.com/read/beyond-trade-finance or at https://www.amazon.in/dp/1638508666]