Mr. Adrian Li,

Chairman, Committee on Banking ICC-HKCBC

Our Committee has received a letter from one of our members seeking the ICC’s official opinion on three queries put forward by their customers. The queries were tabled for discussion at our meeting. Our Committee members viewed R. 337 of Publication No. 613 should be applicable to the 1st Query, whilst they failed to form a unanimous opinion to the 2nd or 3rd. Since we are not in an appropriate position to provide an official opinion, we would like to submit their queries to the Banking Commission for consideration.

■　Query 1

We have been asked by one of our customers on the questions of authentication of alterations on documents issued in countries like Japan, Korea and China.

The document in question is an insurance document. The authentication of an alteration thereon is by either one of the following methods: The insurance company’s small round chop bearing its name with an initial of the purported officer of the insurance company embossed in the chop itself so that no additional signature/initial was placed manually by the chop’s side.

A small round chop with a number “3 DAE” embossed in the chop. DAE might stand  for the short name and 3 the division number of the insurance company. Again, no additional signature / initial was placed manually by the chop’s side.

The above forms of authentication seem to fail to comply with paragraph 9 of ISBP which states that “The authentication must show by whom the authentication has been made and include that party’s signature or initials”.

However, your attention is also drawn to the last sentence of R. 337 of Publication No. 613 which states that “Under UCP500 sub-Article 20(b), a chop constitutes a signature”. In that sense, the above authentication would seem acceptable since the last paragraph of sub-Article 20(b) of UCP500 states that “A document may be signed by handwriting, by facsimile signature, by perforated signature, by stamp, by symbol, or by any other mechanical or electronic method of authentication”. Therefore, the above two methods of authentication might be acceptable. Please advise us whether our analysis is correct or not.

ANALYSIS & CONCLUSION

■　Query 1

Paragraph 9 of ISBP includes “The authentication must show by whom the authentication has been made and include that party’s signature or initials. If the authentication appears to have been made by a party other than the issuer of the document, the authentication must clearly show in which capacity that party is authenticating the correction or alteration.” This supports the previous viewpoint expressed by the ICC Banking Commission.

Clearly, an insurance company’s chop, which includes the company’s name, with an initial of the purported officer of the insurance company embossed in the chop itself, complies with international standard banking practice. As, indeed, would a chop with the company name and a separate chop or signature/initial of the person making the alteration.

However, a chop with a number “3 DAE” embossed therein does not on its face evidence the name and capacity of the person making the alteration. It is not for the bank to make assumptions, and therefore this version would be discrepant.