Module: | MODULE A: INTERNATIONAL BANKING
Q101: Consider the following statements regarding Clean Transport Documents:
Statement 1: A bank will only accept a clean transport document, which is defined as one bearing no clause or notation expressly declaring a defective condition of the goods or their packaging.
Statement 2: The actual word clean must physically appear printed on the transport document for it to be accepted by the nominated bank or the issuing bank.
Statement 3: A transport document stating that the packaging may not be sufficient for the sea journey automatically renders the document unclean and discrepant.
Statement 2: The actual word clean must physically appear printed on the transport document for it to be accepted by the nominated bank or the issuing bank.
Statement 3: A transport document stating that the packaging may not be sufficient for the sea journey automatically renders the document unclean and discrepant.
✅ Correct Answer: B
The correct option is B. Only 1 and 3 are correct.
Concept Definition: A Clean Transport Document is a receipt issued by a carrier that indicates the goods were received in apparent good order and condition, with no visible damage to the cargo or the boxes holding the cargo.
Structural Breakdown: When a ship captain receives cargo, they inspect the exterior.
If they see leaking barrels or crushed cartons, they write a clause on the bill of lading detailing the damage to protect themselves from liability.
This turns the document into an unclean or foul document.
Historical/Related Context: Article 27 protects the buyer and the bank by ensuring they do not pay full price for damaged goods.
The bank relies entirely on the carrier notation to determine the physical condition of the goods at the exact moment of loading.
Causal Reasoning: Statement 1 correctly defines the standard for a clean document.
Any explicit declaration of a defect makes it unclean.
Statement 2 is incorrect.
The rules explicitly state that the word clean does not need to appear on the document.
The absence of negative clauses makes it clean by default.
Statement 3 is correct.
A clause declaring the packaging insufficient is considered an express declaration of a defective condition.
This renders the document unclean and results in a refusal by the bank.
Concept Definition: A Clean Transport Document is a receipt issued by a carrier that indicates the goods were received in apparent good order and condition, with no visible damage to the cargo or the boxes holding the cargo.
Structural Breakdown: When a ship captain receives cargo, they inspect the exterior.
If they see leaking barrels or crushed cartons, they write a clause on the bill of lading detailing the damage to protect themselves from liability.
This turns the document into an unclean or foul document.
Historical/Related Context: Article 27 protects the buyer and the bank by ensuring they do not pay full price for damaged goods.
The bank relies entirely on the carrier notation to determine the physical condition of the goods at the exact moment of loading.
Causal Reasoning: Statement 1 correctly defines the standard for a clean document.
Any explicit declaration of a defect makes it unclean.
Statement 2 is incorrect.
The rules explicitly state that the word clean does not need to appear on the document.
The absence of negative clauses makes it clean by default.
Statement 3 is correct.
A clause declaring the packaging insufficient is considered an express declaration of a defective condition.
This renders the document unclean and results in a refusal by the bank.