When 'Clean on Board' Isn't Clean Enough

The Discrepancy #002

This one comes from a reader at a major European commodity trader. The details have been anonymized, but the pain is very real.

The setup

A bulk carrier loads 25,000 MT of Brazilian soybeans at Santos. The bill of lading is stamped "CLEAN ON BOARD" by the carrier's agent, with the notation: "cargo loaded per shipper's count and weight."

The LC requires presentation of a "clean on board bill of lading." The exporter's bank presents to the issuing bank in Geneva. The issuing bank refuses, citing the following discrepancy:

"Bill of lading bears qualifying notation 'per shipper's count and weight' which renders the document unclean."

The exporter's bank disagrees. The cargo is worth $11.4 million. The ship is already at sea.

The argument

The issuing bank's position: any notation that qualifies the carrier's acceptance of the cargo — even a standard one — makes the bill of lading "unclean" because it introduces doubt about the quantity or condition of the goods.

The presenting bank's position: "per shipper's count and weight" is a standard clause used on virtually every bulk commodity B/L. It does not relate to the condition of the goods. Under UCP 600 Article 27, a clean transport document is one that "bears no clause or notation expressly declaring a defective condition of the goods or their packaging."

Who is right?

The presenting bank. And it is not close.

UCP 600 Article 27 is explicit: a clean document is one without notations about defective condition. The qualifier "per shipper's count and weight" says nothing about condition — it addresses quantity responsibility. It is a standard carrier limitation that appears on the majority of bulk commodity bills of lading worldwide.

ISBP 745 (the ICC's banking practice guidance) reinforces this at paragraph E13: "Clauses on a transport document such as 'shipper's load and count' and 'said by shipper to contain' are not considered to be clauses or notations that indicate a defective condition of the goods or their packaging."

The ICC Banking Commission has ruled on nearly identical cases multiple times. The answer is always the same.

So why does this keep happening?

Three reasons:

1. Training gaps. Many LC examiners learn the rules but not the practice. They have never seen a bulk commodity B/L. They do not know what is standard and what is genuinely anomalous.

2. Risk aversion. When in doubt, refuse. The examiner who approves a questionable document bears personal accountability. The examiner who rejects one faces, at worst, a query from the presenting bank. The incentive structure rewards caution, even when it is wrong.

3. Institutional memory loss. Banks have been laying off experienced trade finance staff for a decade. The people who knew that "per shipper's count and weight" is standard on every voyage charter B/L have retired or moved to advisory roles. Their replacements are working from checklists, not experience.

The resolution

After four days of back-and-forth, the issuing bank withdrew the discrepancy. The exporter's bank cited ISBP 745 paragraph E13 verbatim and threatened referral to the ICC Banking Commission. The documents were honored. The cargo was delivered.

Four days of delay on an $11.4 million shipment. Because someone did not read the rules carefully enough.

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