Professional Documents
Culture Documents
Bills temporary (provisional invoice): It is a type of invoice temporary and usually is found
before signing commercial contracts, as well as before the delivery of goods, and often plays the
role as a material to remember when negotiating the purchase, sale or used to make procedures
for import permit, if necessary. In these cases, on the bill temporarily always have to write a
proposition " not used for tax purposes of interest". for some certain goods, chemical, this
application is considered as a type of vouchers that are worth paying.
Bank transfers
The benefit - sellers, creditors, persons receiving investment capital - or is someone due to the
transfer of money specified.
Bank transfer is a bank in the funds transfer.
The bank's agent bank transfer is a bank in the beneficiary.
Order of business execution
Bank agency
⇨(3)
(2) (4)
Person transfers Person benefit
(1)
Figure 4.1. The self service payment, money transfer
(1) trade deals
(2) The transfer of money written request money transfer (by mail or telegram) to the
Commissioner payment responsibility (if you have an account opened at the Bank)
(3) The receiving bank issues an order to its correspondent bank in the foreign country transfer
money to beneficiaries
(4) Bank money transfer agent for the benefit
When transfer money to bank to make payment in three steps: (1) receive command money
transfer => (2) payments to beneficiaries = >(3) records.
Figure 4.3. The order money transfer to
Documentary Collection
is a method in which the seller entrusts the bank to collect money from the buyer based
not only on the bill of exchange but also on the set of documents sent. accompanied by the
condition that if the buyer pays or accepts the bill of exchange, the bank will hand over the
consignment documents to the buyer for receipt of the goods.
The order of carrying out the collection of documents for collection with documents is the
same as for the collection of smooth slips, only the difference in stage (1) is to prepare a set of
documents to ask the bank to collect money on behalf of the bank. The set of documents
consists of a bill of exchange and accompanying shipping documents. In stage (3), the
correspondent bank will only give it to the buyer if the buyer pays or accepts to pay the draft. In
the collection of documents, the entrustor to the bank, in addition to collecting the money, also
asks the bank to control the consignment documents for the buyer, so that the seller's interests
are more secure. This is the basic difference between voucher collection and plain check
collection. (Figure 4.6)
Figure 4.7. Procedure for payment of documentary credit, L/C opening bank is
concurrently paying bank
(1) The importer makes an application for opening a letter of credit and sends it to his/her bank
to request a letter of credit. to the exporter
(2) Based on the application for a letter of credit, the issuing bank shall issue a letter of credit
and, through its correspondent bank in the exporter's country, notify the opening of the letter of
credit. application and forwarding the letter of credit to the exporter
(3) Upon receipt of this notice, the advising bank shall notify the exporter of the full text of the
notice of opening of the credit, upon receipt of the original Letter of credit shall be immediately
transferred to the exporter
(4) If the exporter accepts the letter of credit, the goods shall be delivered, otherwise request the
bank to open the L/C to amend and supplement the letter of credit to suit contract
(5) After delivery, the exporter prepares the documents required by the letter of credit and
presents it through the advising bank to the bank opening the letter of credit for payment.
(6) The bank opening the letter of credit checks the documents, if it is found to be consistent
with the letter of credit, then proceeds to pay the exporter. If deemed unsuitable, the bank
refuses to pay and returns all documents to the exporter
(7) The bank opens a letter of credit to demand money from the importer and transfers the
documents to the importer upon receipt of the letter of credit. receive money or accept payment
(8) The importer checks the documents, if found to be consistent with the letter of credit, then
refunds the money back to the bank opening the letter of credit, otherwise has the right to refuse
to pay.
Below is a more detailed presentation of the business processes of two indispensable
banks involved in the documentary credit payment method, namely the bank that opened the
L/C and the bank that advised the L/C. (Figures 4.8 and 4.9.)
First of all, for the bank opening L/C, based on the application for opening L/C of the
importer to issue the L/C and seek to notify the L/C together with the issuance of the L/C. Send
the original L/C to the exporter. Normally, the notification and sending of L/C must go through
one of its correspondent banks in the exporting country. It is also possible that this bank sends
the original L/C directly to the exporter.
If there is a request for amendment and supplementation of the applicant for opening the
L/C of the exporter for the L/C, the bank shall make amendments and supplements when there
is an official document from the customer.
The bank is responsible for checking the documents sent by the exporter, if the
documents are in accordance with the provisions of the L/C and are not in conflict with each
other, then pay the exporter and demand money from the importer. Otherwise, refuse to pay.
When examining the documents sent by the exporter, the bank is only responsible for checking
the "appearance" of the documents in accordance with the L/C, but not for checking the legality
and integrity of the documents. accuracy of vouchers etc. Any dispute about the “inside” nature
of the document is to be resolved by the importer and exporter.
The Bank is exempt from liability in case the bank falls into force majeure such as war,
strike, rebellion, flood, earthquake etc. If the L/C expires between then, the bank is also not
responsible for payment of the documents sent on that occasion, unless there are provisions in
place. For all consequences arising from its fault, the bank opening the L/C must be
responsible. The bank is entitled to a normal L/C opening procedure fee from 0.125% to 0.5% of
the value of the L/C.
For the advising bank. The advising bank is the correspondent bank of the bank opening
the L/C in the exporter's country. The main rights and obligations of the advising bank are as
follows:
Upon receiving the L/C notice from the bank opening the L/C, this bank will transfer the
entire contents of the L/C received to the exporter. in written form. The advising bank is only
responsible for translating the telegram verbatim, but not responsible for translating and
interpreting technical words into the local language. If the bank fails to notify the received
messages, the bank shall be responsible. Therefore, at the end of the L/C notice letter, there is
always the sentence "Please note, we are not responsible for any errors or omissions in the
transmission and translation of this telegram".
When receiving a set of documents sent by the exporter, the bank must immediately and
intact transfer such documents to the bank opening the L/C.
The Bank is not responsible for any consequences arising from delay and/or loss of
documents en route to the bank opening the L/C, as long as it proves that it has delivered the
documents intact and on time. it by post.
Figure 4.8. Banking process for opening L/C in documentary credit method
Figure 4.9. Business process of L/C advising bank in documentary credit method
In addition to the two banks that open the L/C and the bank that advises the L/C, there
can also be a confirming bank and a paying bank.
Paying bank is the bank opening the L/C and possibly another bank authorized by the
issuing bank.
If the place of payment is specified in the exporting country, the paying bank is the
advising bank. The paying bank's responsibility is the same as the bank opening the L/C upon
receipt of the set of documents sent by the exporter.
Confirming bank is the bank that confirms to the bank opening the L/C at its request. The
confirming bank is usually a large bank with a good reputation in the international credit and
financial markets. The bank opening the L/C must ask another bank to confirm for itself, which
will reduce the reputation of the bank opening the L/C. To confirm, the bank opening the L/C
has to pay a very high procedure fee and sometimes it has to be booked in advance, even the
reservation can be 100% of the value of the letter of credit.
Letter of Credit (L/C): Letter of credit is an important instrument of documentary credit.
According to Tram Thi Xuan Huong (2006), a letter of credit is a letter (actually a document)
made by a bank at the request of the importer committing to pay the exporter on the condition
that the exporter exports the goods. submit payment documents in accordance with the terms
and conditions stated in the letter of credit.
Letter of credit or L/C is an important legal document, which is the core instrument of the
documentary credit payment method. It includes the following main contents:
(1) Number, place and opening date of L/C, type of letter of credit. In terms of
numbers, all letters of credit must have its own number in order to be able to exchange letters
and telegrams related to the execution of the credit. There is a letter of credit that says at the
beginning of the line to the right of the sentence “Ask for credit no.. on transactional
correspondence”. The letter of credit number is also used to enter related documents.
The place of opening L/C is where the bank opening the L/C writes a commitment to pay
the exporter. This location is meaningful in choosing the applicable law when there is a dispute
if there is a conflict of law about that L/C.
The date of opening L/C is the start date of the commitment of the bank opening the L/C
to the exporter, the date of starting the calculation of the validity term of the L/C and finally the
basis for the exporter to check. Check that the importer performs the opening of L/C on time as
specified in the contract.
Example:
A letter of credit opened on January 1, 1998, in the body of the letter of credit the
sentence “We open our irrevocable credit in favor of ourselves by order of Mutsumi Trading Co
Ltd Tokyo for not exceeding the amount of 35,000USD expiring in Hanoi for negotiation on 31st
January 1998”, i.e. “We open irrevocable credit to you by order of Mutsumi Tokyo Trading Co.,
Ltd. an amount not exceeding USD 35,000 valid until 31 January 1, 1998 in Hanoi”
Thus, the validity period of this letter of credit is 30 days from the date of opening, that is,
from January 1, 1997 to the expiry date of January 31, 1998. The credit stipulates its validity
period right in the first lines of the L/C, with the letter of credit stated at the end in the part where
the bank commits to pay.
The type of letter of credit must be specified in the letter of credit request sent by the importer to
the bank opening the L/C.
(2) Names and addresses of persons involved in documentary credit.
Those involved in documentary credit are generally of two types, namely merchants and
banks.
Traders include only importers, i.e. the person requesting the opening of the L/C; The
exporter is the beneficiary of the L/C.
The banks participating in the documentary credit method include the bank that opened
the L/C, the advising bank, the paying bank, the confirming bank, etc.
The bank opening the L/C is the bank that is usually agreed upon by the two buying and
selling parties and specified in the contract, if there is no prior regulation, the importer has the
right to choose.
(3) Amount of letter of credit.
The amount of the letter of credit is recorded in both numbers and words and is
consistent with each other. A letter of credit with a conflicting amount in numbers and words
cannot be accepted.
The name of the currency must be clear, because the same name is called the dollar,
but there are
many different types of dollars in the world. The amount should not be recorded as an absolute
number. The best way to record the amount is to include a limited amount that can be reached
by the exporter whether the shipment is complete or in bulk. For example, write “.. an amount
not exceeding X USD..
”10% of the total amount.
Than In addition, the rules also state that “unless the credit stipulates that the quantity to
be delivered cannot be more or less, a tolerance of less than 5% is permitted, provided that the
total amount paid is should always not exceed the amount of the letter of credit. This tolerance
does not apply when the credit stipulates the quantity in the stated bales or in units.
(4) The validity period, payment term and delivery term stated in the letter of
credit.
The validity period of a letter of credit is the period within which the bank opening the L/C
undertakes to pay the exporter, if the exporter presents the documents within that period and in
accordance with the provisions of the L/C. The validity period of the L/C starts from the date of
opening the
L/C to the date of expiry of the L/C.
In some countries, it is regulated that if the L/C's validity period is less than 3 months, the L/C
notification fee is only 0.1%, if it is more than 3 months to 6 months, it is 0.2%. Therefore, it is
necessary to determine the validity period of the L/C reasonably so that it can both avoid
depositing capital for the importer and not cause difficulties in the presentation of documents by
the exporter. This determination should ensure that the delivery date must be within the validity
period of the L/C and must not coincide with the effective expiry date of the L/C, the date of
opening the L/C must be a reasonable time before the delivery date. must not coincide with the
delivery date. It is calculated as a minimum of the number of days required to notify the opening
of the L/C, the number of days to keep the L/C at the advising bank, and the number of days to
prepare the goods for delivery to the importer. If the exported goods are complex goods that
must be moved from afar to the port and must be recycled and reprocessed when delivered, if
the delivery time is in the wet season, the number of days to prepare the goods must be many,
vice versa if the goods are exported As an industrial product, it is not necessary to require too
many days of preparation, the L/C's expiration date must be a reasonable time after the delivery
date. It includes the number of days to deliver the documents from the place of delivery to the
exporter's office, the number of days to prepare the documents, the number of days to transport
the documents to the bank that opened the L/C (or the paying bank), the number of days keep
the documents at the advising bank and 7 working days for the bank to show its will to accept or
refuse to pay.
The payment term of the L/C is the time to pay immediately or pay later. This completely
depends on the terms of the contract. If the claim is made by bill of exchange, the time limit for
payment shall be specified in the request for drawing of the draft. The payment term may be
within the validity period of the L/C if payment is made immediately or it may be outside the
validity period of the L/C if the payment is due. But it is important that the term drafts must be
presented for acceptance within the validity of the L/C.
The delivery term is stated in the L/C and specified in the sales contract. It is closely
related to the validity period of the L/C.
(5) Contents about goods such as name, quantity, weight, price, quality specifications,
packaging, markings, etc. are also included in the credit.
(6) Contents about transportation, delivery of goods such as delivery terms (FOB, CIF,
CFR), place of dispatch and place of delivery, shipping method and delivery method, etc.
also included in the credit
(7) The documents to be presented by the exporter are a key element of the credit because
the set of documents specified in the credit is a proof of the exporter's documentation prove that
it has fulfilled its delivery obligations and complied with the provisions of the letter of credit, so
the bank opening the L/C must rely on that to proceed to pay the exporter, if the documents are
suitable. with the provisions of the letter of credit.
The bank opening the L/C usually requires the exporter to satisfy the requirements of the
documents that the exporter must present, the number of these documents is more or less
depending on the requirements of the importer. such requirements are usually agreed upon in
the contract and require how each document is to be drawn.
(8) Other terms.
If there are other special terms that need to be specified in the letter of credit.100
(9) Commitment to pay of the opening bank L/C
The commitment of the bank is an important content of the letter of credit and it binding
the responsibility of the bank opening the L/C.
Here are some sample L/Cs: (Dinh Xuan Trinh. 1996.)
Sample L/C from Bank for Foreign Trade of Vietnam:
“We hereby engage with the drawers, endorsers and bona fide holders of draft(s) drawn
and preented in accordance with the terms of this Credit that the draft(s) shall be duly boasted
on presentation”
We undertake to the and presented. subject to the terms of this credit that such drafts
will be payable on presentation.
The L/C form of Mitsui Bank Ltd is as follows:
“We engage with the drawers, endorsers and bona fide holders of drafts drawn under
and in compliance with the terms of this credit that the same shall be duly proud on due
presentation and delivery of documents to the drawee".
We warrant to the drawers, endorsers and true bearers of drafts drawn under and in
accordance with the terms of this credit that such drafts will be payable on due presentation and
delivery documents for the payer.
Through the above two forms of commitment of the bank opening the L/C, we find that
this is a real commitment, a conditional commitment and a contingent commitment (reservation),
which means that the bank only commits respect the drafts presented on time and in
accordance with the terms of the L/C, and whether or not payment depends on whether the
payment documents are in accordance with the L/C and not. are contradicted.
(10) Signature of the bank opening the letter of credit
The signature is the final content of the letter of credit without which the letter of credit will be
completely invalid. L/C is essentially a civil contract, so the person signing it must also be a
person with full behavioral and legal capacity to enter into and perform civil law relations.
If the L/C is opened by mail, the signature on the L/C seal must match the signatures
notified to each other between the two banks opening the L/C and the bank advising the L/C in
the agency agreement between the two banks. that bank. If opening L/C by electricity, instead
of signature above by TEST.
Below is an L/C of Mitsui Bank opened for Minexport Vietnam to enjoy at the request of the
importer Daiichi Trading Co. via Vietcombank: (Dinh Xuan Trinh. 1996.)
Application form for opening letter of credit from Vietnam Bank for Foreign Trade (Vietcombank)
Letter of credit can be opened by phone or by mail. If opened by mail, upon receipt of
telegram, the advising bank in the exporting country must confirm in writing and the original L/C
will be forwarded to the exporter via the advising bank by plane. phone, the bank opening the
L/C will telex or fax the original L/C to the beneficiary, no longer needing to notify the L/C. Which
bank is the L/C opened through, the importer must write clearly, specifically and according to
the agreement in the sales contract, if there is no prior agreement, this place in the L/C
application form is left blank to Bank for Foreign Trade of Vietnam chooses among their
correspondent banks. Based on the provisions of the contract, determine the type of L/C and
delete unnecessary words. Specify the name, full address and telegram address of the
beneficiary of the letter of credit.
The amount of the letter of credit must be specified in the foreign currency, in numbers
and words. For payment by sight draft, the space between the words "at ------- sight" should be
removed, and for payment by X-day draft, fill in the blank space with letters and numbers, for
example "at ninety" (90) days after --------”
Payment documents of each type are at least 3 copies, if more is needed, write in the
Request for L/C opening so that the bank can include the conditions for opening L/C .
Regarding the types of documents, the following points should be noted:
lading says "Freight to collect" for FOB prices, "Freight prepaid" applies to
CFR or CIF prices. The bills of lading must follow the order of the Bank for Foreign Trade of
Vietnam and must be notified to the importer in our country. Commercial invoice, if it is a
detailed invoice, must add the word DETAILED before the word commercial. Single insurance is
only needed when buying at CIF prices, if buying at FOB and CFR prices, it will be deleted. It is
necessary to specify which insurance conditions, how much % of the invoice value, in what
currency etc.
The certificate of testing is issued by someone, the manufacturer, the exporter or the
testing and inspection agency of the State or private, etc. subject to agreement in the contract.
The certificate of origin is normally issued by the Chamber of Commerce of the exporting
country or may be self-issued by the exporter, but is less common.
The detailed packing list is usually provided by the exporter or the manufacturer, of
course, must also be specified in the contract.
Contents of goods such as goods name, weight, quality specifications, symbols, unit
price must all be recorded in the Request for L/C opening.
Shipping way, forwarding, delivery place, loading place etc. As specified in the contract,
it should be recorded in the Request for opening such L/C.
The purchase and sale contract as the basis for opening the letter of credit should
clearly state the contract number, date of signing and both parties.
Other conditions are those that the importer imposes on the exporter and requires them
to be fulfilled. These conditions are usually not mentioned above or are intended to specify
the conditions mentioned above.
Signature of the director of the import business unit and the chief accountant.
Amendment of L/C
An amendment to a letter of credit can be made by the exporter or the bank opening the
L/C, but the amendment is only valid if the following requirements are satisfied:
(1) Amendment and supplement of L/C within the validity period of L/C
(2) Transactions related to the content of L/C amendment or supplementation must be made in
writing such as telegrams, letters word, telegram, telex etc.
(3) All transactions related to L/C amendments or supplements can be conducted directly
between the two exporters and importers, but the final result must be confirmed
by the Bank. Foreign Trade of Vietnam (Bank opens L/C).
Checking the letter of credit
Checking the letter of credit is an important step for the exporter in implementing the
documentary credit method, because if the mismatch between the L/C and the contract cannot
be detected, If the exporter accepts and delivers the goods according to the contract, the
exporter cannot claim the money, on the contrary, if the goods are not delivered according to
the requirements of the letter of credit, the contract is breached.
Acceptance of L/C is an acknowledgment of the commitment of the issuing bank of the
L/C to their obligation to pay the exporter, and also to accept the obligation of the exporter to
fulfill the delivery obligation. and prepare the payment documents specified in the letter of credit,
so the exporter must have a diligent, meticulous and cautious attitude while checking the letter
of credit sent by the foreigner.
When checking a letter of credit, it is necessary to pay attention to the following points:
(1) Basis for checking L/C: It is a contract of sale signed between two parties. The letter
of credit must be in accordance with the contract and must not conflict with the basic contents of
the contract. L/C examiner must be an export business professional who understands the
contract he or she is preparing to perform. In the case of checking the L/C of an additional
contract, it must be based not only on this contract but also on the original contract, because the
supplementary contract only signs specific terms that the original contract not mentioned.
(2) The Uniform Rules and Practices for Documentary Credits, version 500, should be
considered as the international legal basis to govern a letter of credit open to the other party.
(3) The contents of the L/C must be clear, unambiguous, and must not contradict
each other. The L/C opener cannot set requirements that are too high for the exporter to fulfill.
When it is found that the contents of the letter of credit are inconsistent with the contract,
or contrary to the laws and customs that are applicable in the two countries, or are unable to
perform, the export business companies propose to amend or supplement that letter of credit.
The contents of the L/C that need to be carefully checked include:
(1) Amount of the letter of credit: It is necessary to check whether the currency is in accordance
with the provisions of the contract
or not, the currency needs to clearly state the name of the currency and country with that
currency. Specify the nature of the currency, is there a tolerance for the amount of the L/C?
(2) Valid expiry date and place of the letter of credit: it is necessary to check the expiry date of
the L/C in relation to the delivery date, the invoice date. The expiry date of a letter of credit is
important. Sellers often want this location in their home country, as they can have complete
autonomy in presenting proof of payment. On the contrary, buyers also want this location in their
own country because they do not have to pay sooner.
(3) Type of Letter of Credit: The most commonly applied Letter of Credit is the
irrevocable type as we as sellers should choose this along with a waiver of recourse and if
confirmed, the better. . When using confirmed L/C, we need to specify the cost of confirmation
to be borne by the buyer.
(4) Delivery term: The delivery term is an important content of the letter of credit. The delivery
date may be as follows: "The earliest or latest delivery date..." or "within...", or "about..." or a
specific date. Shipment: There are different ways of delivery that the buyer can specify in the
letter of credit, for example allowing partial deliveries, partial deliveries, restrictions on the
weight of each shipment, limits on the number of trips or delivery in parts, each time the same
quantity
(5) Ways of transport: Whether transshipment is allowed in the letter of credit
Commercial documents
Set of documents for international payment may contain many types of documents
varies, but some commonly available documents include Bill of Exchange - Bill of Exchange,
Invoice - Invoice, Bill of Lading - Bill of Loading, Policy - Insurance Policy
For export, the Bank for Foreign Trade of Vietnam acts as the advising bank, so the
exporter of our country presents the documents to the Bank for Foreign Trade of Vietnam
If the payment documents are in accordance with the requirements of the L/C, the bank
opening the L/C will pay, otherwise the bank will refuse to pay
A set of payment documents in accordance with the requirements of the L/C must be
meeting the following three requirements:
(1) The documents must be consistent with the laws and customs that are being applied
by the two contracting countries
(2) The content and form of the payment documents must be properly prepared.
requirements set out in the L/C, do not arbitrarily violate those provisions. If you do, the bank will
refuse to pay.
(3) The contents and related data between the documents must not contradict each
other, if there is a conflict, people cannot clearly and unify the contents of the goods name,
quantity, etc. , weight, price, total value, beneficiary name etc. then those documents will be
refused by the bank for payment because they think that the documents are inconsistent.
As we all know, the bank only deals with documents and checks on the surface of
documents only. There are things that the beneficiary thinks are very simple and feels
completely reasonable, but when the bank examines the documents, it acts from the bank's
point of view, not from someone's common sense. there. For example, an exporter presents a
bill of lading stating "... port of delivery: Saigon port, port of discharge: Port of Rotterdam..."
while the letter of credit states "...sent from a port in Vietnam to the port of Rotterdam...". For the
presenter, they understand that Saigon port is of course in Vietnam, but for banks in the world
they do not know all ports of all countries, or Saigon port is in Vietnam, they only based on
documents issued by the carrier only. In the above case, the bank refuses to pay because the
bill of lading does not meet the requirements of the letter of credit to the port of shipment. If in
the above situation, the bill of lading says "port of delivery: Saigon port, Vietnam ...", then the bill
of lading is valid.
Errors/invalids when checking the documents
When checking the documents, if errors are detected, depending on the severity, the
Foreign Trade Bank and the export business unit discuss remedial measures.
Usually the causes of invalidity are many: credit validity, delivery, details of goods,
specifications, quality of goods etc. Invalids can be minor errors that can be corrected, There
can also be serious errors that cannot be corrected and the bank is forced to refuse to pay.
Depending on each specific situation, there is an objective, accurate and logical view of the
problem and its actual value must be taken into account. .
Below we give a specific situation. (Nguyen Trong Thuy. 2003)
In the presented documents, there are the following errors:
- The invoice contains the wrong postal code: 0256, the correct number is 2056.
- The air waybill shows the last name of the notified party as CHAI, while they are correct
CHAN
- The bill of lading has the wrong address of the beneficiary: Induscial Parl, the correct
name is Industrial Park.
The International Chamber of Commerce has analyzed and concluded as follows:
For the first error, this cannot be considered an invalid one, because it is only a postal
code, used in the Post Office, which does not affect any party to the credit. It's just
the number in the invoice issuer's address, it doesn't matter at all.
For the second error, the last name of the person being notified is wrong. This is illegal
as.This could result in someone having the same name and randomly taking the last name
CHAI, resulting in a transaction glitch.
As for the third error, this error is not important and does not affect the parties and is not
related to the transaction, because everyone understands this is a typo error, so it cannot be
considered an invalid.
Comments and application cases
The costs in documentary credit are very high compared to other
payment methods. Usually there are types of costs such as L/C opening fee, L/C modification
fee, L/C execution fee, L/C payment fee, L/C notification fee. However, it is also the safest of the
four payment methods presented in this chapter. If the seller fulfills the delivery obligation and
prepares a set of payment documents in accordance with the requirements of the letter of credit,
the bank will guarantee payment for the goods to the seller. The fact that the seller delivers the
goods in accordance with the requirements of the letter of credit is the same as that the seller
has complied with the terms of the commercial contract, so the buyer's interests are also
guaranteed because they will receive the goods in accordance with the terms of the contract.
The requirements of the letter of credit are also the requirements of the commercial contract,
because the letter of credit is established based on the terms of the commercial contract signed
between the two parties.
Documentary credit method should be used in cases where the buyer and seller do not
have mutual trust or are transactions with large payment scales.
Appendix Chapter 4
Appendix 4.1 Uniform Customs and Practice for Documentary Credits, version 500, of the
International Chamber of Commerce (Effective from January 1, 1994)
The Uniform Customs and Practice for Documentary Credits - UCP 500, ICC
3:
Credits based on contracts a
. Credits, by their very nature, are separate transactions from sales or other contracts,
which may be the basis of which the banks are not involved or not. be bound by such contracts,
notwithstanding any reference to such contracts contained in the credit. Consequently, the
bank's undertaking to pay, accept and pay drafts or discount documents and/or fulfill any other
obligation under the letter of credit, not subject to any claim or The claimant's defense derives
from his or her relationships with the issuing bank or the beneficiary.
b. Under no circumstances shall a beneficiary take advantage of the contractual
relationships existing between banks or between the applicant and the issuing bank.
Article 4:
Documents for goods/services/others:
In Credit transactions, all parties involved for transactions are based on documents and not on
goods and services. and/or other work to which the documents may relate.
Article 5:
Instructions on the issuance/amendment of the Credits
a. Instructions for the issuance of the Credit, the Credit itself, the Instructions for
amending the
Credit and the amendments themselves must be complete and correct.
To prevent any confusion and misunderstanding, banks must prevent any of
the following tendencies:
1. Putting too much detail on the Credit or any amendments
2. Giving indications to issue, notify or confirm a Credit by reference to a previously issued
Credit (Similar Credit) to which the previous Credit already contains accepted amendments,
and/or amendments. correction is not accepted.
b. All instructions for the issuance of a Credit and the Credit itself, where applicable, all
instructions for an amendment and the amendment itself must accurately state word must be
presented for payment, acceptance or discount to be made.
Article 7:
Responsibilities of the advising bank:
a. A credit may be communicated to a beneficiary through another bank (advising bank) without
any commitment to this advising bank, but that bank, if it decides to advise the credit , must
carefully examine the apparent authenticity of the credit announced by that bank. If that bank
decides not to advise the credit, it must notify the Issuing Bank without delay.
b. If the advising bank is unable to verify such apparent authenticity, it shall notify without delay
to the bank from which the instructions are deemed received, that the advising bank cannot
authenticity of the credit and, however, if the bank decides to advise the credit, it must inform
the beneficiary that the bank cannot contain the authenticity of the credit.
Article 8:
Cancellation of a Credit:
a. A revocable credit may be amended or canceled by the issuing bank at any time and without
prior notice to the beneficiary.
b. However, the issuing bank must: 123
i. Reimbursement to another bank where a revocable letter of credit has been made by sight,
acceptance or discount - for any payment, acceptance or negotiation that has been performed
by that bank - prior to receipt of notice of amendment or cancellation, on the basis of documents
which appear to be in compliance with the terms and conditions of the credit.
ii. Reimbursement to another bank to which a revocable credit has been made by post-payment,
if such a bank, prior to receipt of the notice of amendment or/or cancellation, has received the
words that appear to be consistent with the terms and conditions of the credit.
Article 9:
Responsibilities of issuing and confirming banks:
a. An irrevocable credit is a firm undertaking by the issuing bank once the specified
documents are presented to the nominated or issuing bank and the terms and conditions
of the credit are fulfilled. is correct:
i. If the credit provides for immediate payment - then it must be paid immediately
ii. If the credit stipulates payment later - it must be paid on the due date determined in
accordance with the provisions of the credit.
iii. If the credit provides for acceptance:
- By the issuing bank - then accept the Bill drawn by the beneficiary to the issuing bank
and payable, or
- By another nominated bank for payment - accepts and pays on maturity to pay drafts drawn by
the beneficiary to the issuing bank in the event that the bank nominated to pay the drafts
specified in the credit does not accept the drafts. drafts drawn upon them, or payment of drafts
accepted but not paid by the nominated bank to pay such drafts at maturity;
iv. If the credit provides for a discount - then payment shall be made without recourse to
honest drawers and/or bearers, drafts drawn by the beneficiary and/or documents presented
under the credit. A credit shall not permit the issuance of drafts drawn to the applicant for the
opening of the credit. However, if the credit requires drafts drawn to the creditor, banks will
consider such drafts as additional documents.
b. A confirmation of irrevocable credit by another bank (confirming bank) upon the
authorization or request of the issuing bank, constitutes a firm undertaking on the part of the
issuing bank, with provided that the specified documents are presented to the confirming bank
or any other nominated bank and that the terms and conditions of the credit are followed.
i. If the credit stipulates immediate payment, it shall be paid immediately;
ii. If the credit provides for post-payment, it must be paid on the due date specified in the
credit;
iii. If the credit stipulates to accept:
- By the confirming bank, it must accept payment of a draft drawn by the beneficiary against the
confirming bank and payable upon maturity, or
- By The other paying bank accepts and pays drafts drawn by the beneficiary against the
confirming bank, in the event that the bank specified in the credit refuses to accept the bill of
exchange against it or pay the bill of exchange it accepted but failed to pay when the bill was
due.
iv. If the credit provides for a discount, the draft drawn by the beneficiary and/or the documents
presented under the credit shall be discounted, provided that there is no recourse against the
drawee and/or others. actually hold the bill of exchange. A credit must not include a bill of
exchange drawn against the person requesting the opening of the credit. However, if the credit
stipulates that a draft is drawn against the applicant, banks will treat the draft as a
supplementary document.
c.
i. If another bank is requested or authorized by the issuing bank to confirm a credit and is not
willing to do so, the issuing bank must be notified immediately.
ii. Unless the issuing bank specifies otherwise in the mandate or requires a credit confirmation,
the advising bank may advise the credit to the beneficiary without adding its confirmation to the
credit.
d.
i. Except as otherwise provided in article 48, an irrevocable credit may not only not be modified
but also canceled without the consent of the issuing bank, confirming bank (if any) and
Beneficiaries.
ii. The issuing bank will be bound to the credit amendments from the date of the credit
modification. A confirming bank may acknowledge an amendment and be bound from the date
of notification of the amendment. However, the advising bank may notify the beneficiary of an
amendment without having to confirm the amendment and if so, it must notify the issuing bank
and the beneficiary without delay.
iii. The conditions of an original credit (or of a credit constituting a previously accepted
amendment) remain in effect at the beneficiary unit until the beneficiary has notified his/her
acceptance of the application. the amendment to the bank that notified the amendment. The
beneficiary must notify the acceptance or rejection of the amendment. If the beneficiary fails to
give such notice, presentation to the nominated bank or issuing bank of documents which are in
accordance with the credit and unaccepted amendments shall be deemed to be notice of
acceptance of the amendment. beneficiary's change and the date of modification is counted
from when the credit is modified.
iv. Accepting partial revisions recorded in the same revision notice will not be allowed and,
therefore, will not be valid.
Article 10
Types of Credit
a. All credits must indicate either pay now, or pay later, or accept or discount.
b.
i. Unless the specified credit is made only at the issuing bank, all credits must specify the bank
(designated bank) authorized to pay, undertake to pay later, accept drafts or discounts. For a
freely discounted credit, any bank can be a nominated bank. Documents must be presented to
the issuing or confirming bank (if any) or any other nominated bank.
ii. Discounting means the valuation and payment of drafts and/or documents by an authorized
bank. The mere examination of documents without valuation and payment of drafts or
documents does not constitute a discount.
iii. Unless the nominated bank is a confirming bank, the appointment of the issuing bank does
not constitute any undertaking by the nominated bank to pay, to pay later, to accept drafts or
discount. Unless expressly agreed by the nominated bank and communicated to the beneficiary,
the nominating bank's receipt and/or examination, and/or delivery of documents does not cause
that bank to liable to pay, undertake to pay later, accept drafts
or discounts.
c. When an issuing bank appoints a bank, or authorizes a credit to be discounted only by any
bank, or when authorizing or requiring another bank to add a confirmation to a credit, it means
that the issuing bank authorizes that bank to pay, upon presentation of documents that appear
to be in accordance with the terms of the credit and undertakes to reimburse that bank in
accordance with the terms of the credit of the terms.
Article 11
Telegraphic Remittance Credit and Preliminary Notice
a.
i. When issuing bank telegrams to the advising bank to advise a credit or modify a credit, the
telegram shall be deemed to be a credit performance document or an actual document currently
revised and no written confirmation is required by mail. Otherwise, if a confirmation by mail
arrives, it will be null and void and the advising bank will not be responsible for checking such
confirmations against the credits and credit amendments. used by telegraphs.
iii. If a telegram stating "full details will be sent later", (or words with similar effect) or written
confirmation will be a valid text of the credit or self-correction, then the telegram shall not be
treated as a valid or self-correcting credit. The issuing bank shall send without delay detailed
written credits or amendments to such advising bank.
b. If a bank uses the advising bank's services to communicate credit to beneficiaries, it must use
its own services to notify the amendments.
c. A preliminary notice of issuance or modification of an irrevocable credit (provisional) may only
be sent by an issuing bank if that bank prepares to issue subsequent issuance of the credit, or
to renew it. effective letter of credit for execution. Unless the issuing bank's aggregate statement
otherwise states, the issuing bank that has delivered such a statement shall be irrevocably
bound to issue or correct without delay the credit in accordance with the terms of the report.
does not contradict the report.
Article 12
Incomplete or unclear
instructions If incomplete or unclear instructions are received to advise, confirm or correct a
credit, a bank is required to act on such instructions. can only inform the beneficiary to know
and not be responsible for anything. This statement must clearly state that the notice is provided
for information only and that the advising bank assumes no responsibility whatsoever. In all
cases, the advising bank must notify the issuing bank of the action taken and request the
issuing bank to provide the necessary information. The issuing bank must provide the
necessary information without delay. set. The Credit will be advised to be confirmed or
amended, only when complete and clear instructions have been received and if the advising
bank is then ready to carry out the instructions
C. OBLIGATIONS AND RESPONSIBILITIES TASKS
Article 13
Criteria for examining documents
a. Banks must examine all documents specified in the credit with reasonable care to determine
whether documents appear to be in accordance with the terms and conditions of the credit. or
not. The apparent conformity of documents specified under the terms and conditions of the
credit shall be determined by international standard banking practice as reflected in these
clauses. Documents appearing on their face to be inconsistent will be deemed not to appear on
their face to be in accordance with the terms and conditions of the credit.
Documents not specified in the credit will not be examined by banks. If banks receive such
documents, they must return them to the presenter or forward them without liability.
b. Issuing bank, confirming bank, if any, or a nominated bank acting on their behalf, each such
bank shall be given a reasonable time, but not to exceed seven days for receipt of the
documents, to examine the documents and decide whether to accept or reject the documents
and to notify the party from which the bank has received the documents of the decision.
c. If the credit contains conditions for which no documents must be presented accordingly,
banks will consider such conditions to be unwritten and will not be concerned with them.
Article 14
Invalid documents and notices
a. When the issuing bank authorizes another bank to pay or undertakes to pay late, accepts
drafts, or discounts on the basis of documents, whether they appear on their face to be in
accordance with the terms and conditions of the credit, the issuing bank and confirming bank, if
any, are bound to:
i. Reimbursement to the nominated bank for payment or undertaking to pay later, accepting
drafts or discounts.
ii. Receive documents
b. Upon receipt of the documents, the issuing bank and/or confirming bank, if applicable, or the
bank nominated to act on their behalf, must specify on the basis of the documents alone,
whether they are valid or not. appear on their face to be in accordance with the terms and
conditions of the credit, such banks may refuse to accept the documents.
c. If the issuing bank clearly determines that the documents shown on their face are not in
accordance with the terms and conditions of the credit, it may, in its sole discretion, contact the
credit applicant. for invalid acceptance however, does not extend beyond the time stated in
section 9b of article 13.
d.
i. If the issuing bank and/or confirming bank or a
nominated bank acting on their behalf, decides to reject the documents, notify this by
telecommunication or, if this is not possible, by other expeditious means, but not later than the
end of the seventh banking day from the date of receipt of the documents. Such notice will be
sent to the bank from which the documents were received, or to the beneficiary if they have
received the documents directly from the person.
ii. Such notice shall state all irregularities by which the bank rejects the documents and shall
also state whether the bank is in possession of the documents, at the discretion of the presenter
or paying them back to the presenter.
iii. The Issuing Bank and/or Confirming Bank, if any, shall be entitled to claim reimbursement of
the principal plus interest from the issuing bank, with respect to any reimbursement it has made
to that bank.
e. If the issuing bank and/or confirming bank, if any, fail to act in accordance with the provisions
of this article and/or fail to retain the documents at the presenter's discretion or return them to
the present. The issuing bank and or confirming bank, if any, will forfeit its right to claim that the
documents do not conform to the terms and conditions of the credit.
f. If the transmitting bank informs the issuing bank and/or the confirming bank, if any, of any
irregularity in the document or informs such bank that it has paid, committed payable later,
having accepted a bill of exchange, or discounted with a reservation or with a security of default,
the issuing bank and/or confirming bank, if any, shall not so are exempt from any of their
obligations under any provision of this article. Such a reservation or security is only relevant to
the relationship between the bank transferring the document and the reservation, or with the
person who made or is authorized by another person to act on his/her behalf.
Article 15
Disclaimer for Validity of
Documents Banks are not obliged or responsible for the appearance, completeness, accuracy,
truthfulness, forgery or legal effect of any documents. any documents or for the general and/or
particular conditions specified in such documents or added, banks are not responsible for the
description of the goods, their quantity, or their weight. quantity, condition, packaging, delivery,
value or existence of the goods which any document represents, or of good faith or conduct
and/or of deficiencies, solvency, performance of any obligation or reliance by the shippers,
carriers, forwarders, consignees or underwriters of the cargo or of any other person.
Article 16
Disclaimer of responsibility for delivery of notices.
Banks are not responsible for and shall not be liable for any consequences arising from delay
and or loss in transit of any messages, correspondence or documents or for delay, cutting
clipping or other errors occurring in the transmission of telecommunications. Banks assume no
liability or responsibility for errors in the translation and or interpretation of technical terms, and
reserve the right to transfer without having to translate credit terms.
Article 17
Cases of Force Majeure
Banks are not obliged to and shall not be liable for the consequences arising from the
interruption of operations due to natural disasters, disturbances, civil revolutions, uprisings, war
or any other cause beyond their control, or from any strike or lockout. Unless expressly
permitted, when banks resume business, banks will not pay, commit to pay later, accept drafts
or discount on expired credits. in the midst of such interruptions in banking operations.
Article 18
Disclaimer of responsibility for the actions of the instructed party
a. When using the services of one or more other banks to carry out the instructions of the
creditor, the bank does so for and at the risk of the creditor.
b. Banks are not obligated and liable if the instructions communicated by them are not carried
out, even if they themselves choose such other banks.
c.
i. The party instructing the other party to perform the services shall be liable for any costs,
including commissions, fees, costs, expenses incurred to the party receiving its relevant
instructions.
ii. Where the credit provides that such costs are borne by a party other than the instructing
party, whose costs cannot be recovered, the instructing party is ultimately obligated to pay the
costs again that fee.
d. The creditor is bound and liable to indemnify the banks for any consequences that may result
from any obligations and responsibilities imposed by foreign laws and customs.
Article 19
Bank-to-bank reimbursement arrangements
a. If the issuing bank intends that the reimbursement to which the paying a bank, accepting
bank or discounting bank is entitled, will be obtained by that bank (Collecting Bank), by
(Reimbursing Bank) then that issuing bank must provide the indemnifying bank in due course
with appropriate instructions or authorize such claims to be enforced.
b. Issuing banks shall not require the collecting bank to provide a documentary confirmation
of compliance with the terms and conditions of the credit to the reimbursement bank.
c. Rich shall not be discharged from any of its obligations with respect to reimbursement and
where reimbursement is not received by the claimant from the reimbursement bank.
d. The Issuing Bank shall be liable to the Claimant for any loss of interest if reimbursement is
not provided by the Reimbursing Bank on the first request or in any other manner. specified in
the credit or mutually agreed upon, as the case may be.
e. Reimbursing bank charges will be charged to the issuing bank. However, in cases where
costs are charged to another party, it is the responsibility of the issuing bank to specify this in
the original credit and in the reimbursement authorization order. In cases where the
reimbursement bank's costs are charged to another party, they will be collected from the
collecting bank when the credit is not drawn (unused) the indemnifying bank's costs. Refund
remains the obligation of the issuing bank.
D. DOCUMENTS
Article 20
Cases of unclear meaning of the person making the documents
a. Words such as "first-class", "famous", "local" and the like should not be used to describe the
qualifications of the person making any document to be presented under the credit.
If terms are included in the credit, banks will accept the relevant documents presented, provided
that they appear on the face of the document in accordance with the terms and conditions. other
of the credit and is not allocated by the beneficiary.
b. Unless otherwise specified in the credit, banks will also accept as originals of documents
prepared or appear to be made:
i. By photocopying, automatic or computerized method.
ii. By themselves provided that they are marked as original and where necessary the documents
are signed. Documents can be signed by hand, by signature via Fax, by seal, by sign or by any
method of authentication by machine or electronic.
c.
i. Unless otherwise specified in the credit, banks will accept as copies, documents marked as
duplicates or unmarked as originals copies do not need to be signed.
ii. Credits that require documents to be made in multiple copies such as "in duplicate", "double",
"two copies" and the like may be presented in one original, with a remaining number of copies.
copies, unless the document itself indicates otherwise.
c. Unless otherwise specified in the credit, a condition of the credit required for a document to
be authenticated, valid, visaed, authenticated or similar will be satisfied by any any signatures,
marks, or symbols on such documents, provided that on the surface of the vouchers it appears
to satisfy the above-mentioned conditions.
Article 21
Does not specify author and content of documents
Except for transport documents, insurance and commercial invoices, when documents are
required to be presented, the credit must state by whom the documents are issued. and data
content of such documents. If the credit does not provide so, banks will accept documents as
presented as long as the data content is not inconsistent.
Article 22
Issuance and Credit Date
Unless otherwise specified in a credit, banks will accept a document dated to it prior to the date
of credit as long as such documents are presented within period specified in the credit and in
these terms.
Article 23
Bill of Lading/Maritime
a. Unless otherwise specified in the credit, if a credit requires a bill of lading from the port, banks
will accept a document however named, which:
i. On the face of the bill of lading, the name of the carrier is clearly indicated and signed or
authenticated.
- By the carrier or named agent or representative of the carrier, or
- By the master or a named agent or representative of the master.
Any signature or certification of the carrier or the master shall indicate that he is indeed the
carrier or master. Depending on the case, a 130 agents who sign or certify on behalf of the
carrier or master must also indicate their name and capacity as the carrier or master, on which
the agent acts on behalf of the carrier. And
ii. Indicate whether the goods have been loaded on board or delivered to a named vessel.
Loading or delivery on a named vessel may be indicated by a pre-printed word on the face of
the bill of lading and shall clearly indicate whether the goods have been loaded on board or
delivered on a named vessel. In this case, the date of issue of the bill of lading is considered to
be the date of loading on board and the date of delivery.
In all other cases, loading on a named vessel must be substantiated by a notation on the bill of
lading and the date of loading on board the named vessel shall be deemed to be the date of
shipment.
If the bill of lading contains :intended ship" or a similar word relating to the carrier, the loading
on board the named vessel must be noted on the bill of lading, in addition to stating the date on
which the goods were shipped. The name of the ship must also be on board, even the date
when the goods were loaded onto a vessel called the "intended vessel.
" loading, the noting loaded on board must also indicate the port specified on the credit and the
name of the consignee, even if the goods have been loaded on board the vessel listed in the bill
of lading. This also applies even if the bill of lading is pre-printed with the wording that the goods
have been loaded on board,and
iii. Indicate the port of loading and the port of discharge in the credit, even if:
- The bill of lading indicates a different place of consignment. with the port of loading and/or
place of final destination other than the port of discharge and/or
- The bill of lading contains the word "intended port" or a similar word in relation to the port of
loading and/or port of discharge, provided old vouchers must indicate the port and/or port of
discharge specified in the credit,and
iv. Indicate a master bill of lading or, if the bill of lading number is issued in multiple originals, the
complete set of master bills of lading has been drawn up,and
v. Show all or some of them by reference to a source or document other than a bill of lading
( abridged bill of lading or blank back bill of lading); banks will not check the content of such
conditions,And
vi. It does not state that the document is subject to the charter party and/or does not state that
the cargo ship is sailing and
vii. The other aspects must meet the provisions of the credit
b. For the purposes of this provision, transhipment means unloading and reloading from one
vessel to another during a sea carriage journey from the port of loading to the port of discharge
specified in the credit.
c. Unless the terms of the credit prohibit transshipment, banks will accept bills of lading stating
the goods are to be transhipped, provided that the entire carriage by sea is covered by the
same bill of lading.
d. Even if the credit prohibits transshipment, banks will accept a bill of lading, on which:
i. Indicate transshipment as long as the goods concerned are carried
by containers, trailers and/or LASH barges listed on the bill of lading, provided that the entire
sea voyage is solely for the same carriage. single only, and/or
ii. There is a provision that the carrier is entitled to transshipment.
Article 24
The sea waybill is not transferable.
a. If the credit requires a non-negotiable sea waybill from port to port, unless otherwise specified
in the credit, banks will accept documents, however named, that:
i. The face of the document must indicate the name of the carrier and that they have been
signed and authenticated by:
- the carrier or the named agent of (or) acting on behalf of the carrier, or
- the master or the named agent of (or) acting on behalf of the master.
Any signature or endorsement by the carrier or by the master must clearly identify them as the
carrier or the master as the case may be. The signature of the agent or the endorsement of the
carrier or master must also indicate their name and capacity, i.e. the carrier or master for whom
the agency is authorized.
ii. It is clear that the goods have been loaded on board or finished on a named vessel.
Loading goods on board or finished loading on a named ship may be indicated by pre-printing
on the non-negotiable sea waybill to prove that the goods have been loaded on board the
named ship, or finished loading on board the ship. Namely in this case, the date of issue of the
seaway bill shall be deemed to be the date of loading on board and the date of delivery.
In all other cases, loading on board the named vessel must be certified with a note on the sea
waybill stating the date on which the goods were loaded on board, in this case, the date the
notation was completed. vessel is deemed to be the date of delivery.
If the sea waybill is marked "intended vessel" or a similar word for the cargo ship , the
completion of loading on board the named vessel must be marked with the goods being loaded
on the sea waybill and in addition to the date of loading. completed, the name of the carrier
must also be indicated, even if the goods have been loaded on a vessel called "intended".
If the sea waybill indicates the place of receipt and the place of receipt of the goods for dispatch
is different from the port of loading, the notation of the completed cargo must also indicate the
name of the port of loading specified in the credit, the name of the vessel carrying the goods,
immediately even when the goods have been loaded on the vessel specified on the sea waybill.
This provision also applies to the sea waybill on which the wording of the goods has been
printed on board, and
iii. Name the port of loading and the port of discharge in the credit, even though the document:
- indicates a different place of receipt for dispatch than the port of loading and/or the place of
final destination is different from the place of discharge, and/or
- indicates the word "intended" or a similar word refers to the port of loading or the port of
discharge, provided that the document still indicates the port of loading and/or the port of
discharge specified in the credit; and
iv. Consists of only one master sea waybill or, in the case of more than one release, the
complete set of master sea waybills already made, and
v. Show all terms of carriage or some conditions of carriage by citing a source or a document
that is not non-negotiable sea waybill (short or white back), banks will not check the contents of
such conditions, and
vi. Not stating that the document is dependent on the charter party and/or not stating that the
vessel is sail- only, and
vii. The other aspects must meet the provisions of the credit.
b. For the purposes of this provision, transhipment means unloading and loading from
one vessel to another during a sea voyage from the port of loading to the port of
discharge specified in the credit.
c. Unless there are conditions stated in the credit that prohibit transshipment, banks will accept
non-negotiable sea waybill on which the goods are to be transshipped, as long as the entire
carriage journey is only using the same sea waybill. stop.
d. Even if the credit prohibits transshipment, banks will accept a sea waybill:
i. It shall be conveyed as long as the goods concerned are carried by containers, trailers and/or
LASH barges as specified by the sea waybill, provided that the entire voyage of carriage uses
only the same non- negotiable sea waybill, and/or
ii. There is a provision stating that the carrier is entitled to transshipment.
Article 25
Bill of lading charter party
a. If a credit requires or permits a bill of lading under a charter party, banks , unless otherwise
specified in the credit, will accept such a bill of lading, however named, without :
i. Stated as subject to the charter party, and
ii. Show on the face of the document that it has been signed or authenticated by:
- the master or named agent of (or) acting on behalf of the master, or
- the owner or named agent of or on behalf of the master. ship owner's face.
Any signature or endorsement by the master or owner must be clearly demonstrated by the
master or owner as the case may be. The signature of the agent or the certification of themaster
or owner must also indicate their name and qualifications, i.e. the master or owner of the ship
for whom their agency is authorized
iii. Specify or not specify the name of the carrier.
iv. Indicate that the goods have been loaded on board or finished loading on a named ship.
Loading or unloading on named vessel may be indicated by preprint
on the bill of lading that the goods have been loaded on board the named vessel or have been
delivered on board the named vessel, in which case, The date of issue of the bill of lading is
deemed to be the date of shipment and the date of delivery.
In all other cases, loading on a named vessel shall be attested by a notation on the bill of lading
and the date of loading notation on named vessel shall be deemed to be the date of shipment,
and
v. Specify the port of loading and unloading specified on the credit, and
vi. Consists of only one master bill of lading, or, if multiple bills of lading are issued, the
complete set of master bills of lading already made, and
vii. The other conditions must meet the provisions of the credit.
b. Even if a credit requires presentation of a charter party in connection with the charter party bill
of lading , the banks will not examine the charter, but will forward it to the consignee without
What is responsible.
Article 26
Combined transport documents
a. If a credit requires a transport document for at least two modes of transport (intermodal
transport), unless otherwise specified in the credit, banks will accept a document, even if it is
called, as long as
i. Specify the name of the carrier or intermodal transport operator and have been signed or
authenticated by:
- The carrier or the combined transport operator or named agent acting on behalf of or on behalf
of the carrier. carrier or of the combined transport operator, or
- the Master or his designated agent.
Any signature or certification of the carrier, the combined transport operator, as the case may
be, or the master shall be identified as the carrier, the combined transport operator, as the case
may be. fit. An agent, when signing or certifying on behalf of a carrier, multimodal transport
operator or master, must also indicate their name and capacity, i.e. carrier, intermodal transport
operator. , or the captain on whose behalf the agency operates. And
ii. Clearly indicate the goods have been dispatched, received for dispatch or loaded on board.
Shipment, receipt for dispatch or loading on board may be indicated by letter on a combined
transport document and the date of issue thereof shall be deemed to be the date of dispatch,
receipt for dispatch or loading on board and is delivery date.
However, if stamped or otherwise, the date of shipment, the date of receipt for dispatch or the
date of loading on board the vessel shall be deemed to be the date of shipment. And
iii.
a. indicate that the place of consignment specified in the credit may be different from the port,
airport, or
place of loading and the final destination specified in the credit may be different from
the airport port or place of destination, and /or
b. Contains the word "intended" or a similar word in relation to the ship and/or port of loading
and/or port of discharge, and
Consists of only one original of the combined transport document or if issued in multiple copies.
The original includes the complete set of such originals.
v. Show that all terms of carriage or several such conditions are referenced to a source or
document other than a combined transport document (abridged or reverse), banks will not
check the contents of such conditions. And
vi. There is no mention of being dependent on a charter party and/or no mention of sailing only,
and
vii. All other conditions are met in the credit.
c. Even if a credit prohibits transhipment banks will accept a
combined transport document stating that transhipment will or may take place, as long as the
entire carriage is made using only one transport document. Unite.
Article 27 Air
transport documents
a. If a credit requires an air waybill, unless otherwise specified in the credit , banks will accept a
bill of lading, if on it:
i. Specify the name of the carrier and signed or otherwise authenticated by:
- the carrier, or
- the carrier's designated agent.
Any signature or endorsement by the carrier must indicate the carrier. An agent who signs or
authenticates on behalf of a carrier must also indicate his or her name and capacity, that is, the
carrier he or she acts on behalf of, and
ii. Specify the goods that have been transported. And
iii. If the credit requires the actual date of shipment, it shall stipulate that the bill of lading must
not clearly indicate the date of shipment and treat that date as the date of shipment.
For this purpose, the brackets of the air waybill (such as carrier only or a similar word) referring
to the date and number of the flight shall not be considered as a reference to the date and
number of the flight. date of shipment.
In other cases, the date of issue of the air waybill will not be considered as the date of shipment.
iv. Specify the departure and arrival airports specified on the credit. And
v. Specify the main bill of lading for the shipper, shipper even if the credit specifies a full set of
originals or a similar word, and
vi. Indicate all or certain conditions of carriage with reference to a source or document other
than an air transport document, banks will not check the contents of the conditions. that, and
vii. All other conditions are met in the credit.
b. For the purposes of this provision, transhipment means the unloading and reloading from one
aircraft to another during a carriage from the airport of departure to the airport of destination.
specified in the credit.
c. Even if a credit prohibits transshipment, banks will accept an air waybill on which
transhipment will or may be conducted, as long as the entire carriage is on the same air waybill.
Article 28
Transport documents can be by river or by rail or by road.
a. If a credit requires water, road, or rail bills of lading, banks will, unless otherwise stated,
accept bills of lading of the above types, but must:
i. Indicate the name of the carrier, signed or otherwise authenticated by the carrier, or the
named agent acting on behalf of the carrier, and/or indicated by a receipt seal or a certificate of
other reception of the carrier or agency acting for or on behalf of the carrier.
Any signature, endorsement, acceptance seal or certificate of receipt by the carrier must be
made by the carrier himself. An agency that signs or authenticates on behalf of a carrier must
indicate their name and capacity as carrier, for which the agency acts on behalf of the carrier.
And
ii. Indicate that the goods were received for carriage, consignment or carriage or a similar
document.
The date of issue of the transport documents is deemed to be the date of delivery unless the
transport document bears a stamp of receipt, in which case the date of the stamp is deemed to
be the date of delivery. And
iii. Specify under the credit the place of shipment and destination. And
iv. All other conditions are met in the credit.
b. If the bill of lading does not indicate the number of copies issued, banks will accept the
transport documents presented as a complete set. Banks will accept transport documents as
original whether or not stated as original.
c. For the purposes of this article, transshipment is understood as unloading and reloading from
one means of transport to another during a carriage journey from place of destination to
destination. goods arrive as specified in the credit.
d. Even if the credit prohibits transshipment, banks will accept rail, river or road bills of lading on
which transshipment will or may occur, provided that the entire carriage is only using the same
bill of lading and on the same mode of transport.
Article 29
Postal receipts
a. If a credit requires a postal receipt or a postal receipt, then, unless otherwise stated, banks
will accept a postal receipt or postal receipt, on which:
i. Stamped or otherwise authenticated and dated at the place where the credit stipulates that the
goods must be delivered or dispatched that date is deemed to be the date of shipment or
dispatch, and
ii. All other things meet the provisions of the credit.
b. If a credit requires a document issued by a post office or delivery service company
evidencing receipt of goods for dispatch unless otherwise specified in the credit, banks will
accept such a document. word, if it says:
i. The name of the post office/service company and has been stamped, signed or otherwise
authenticated by the post office/service company (unless the credit specifically specifies a
document translated by the post office/service company). named service issuers banks will
accept a document issued by any post office/service company). And
ii. Indicate the date of collection or receipt of the goods or a similar word, that date shall be
deemed to be the date of delivery or dispatch of the goods.
iii. Other conditions must be met in the credit.
Article 30
Transport documents issued by the forwarder
Unless otherwise authorized in the credit banks will only accept a transport document issued by
the forwarder, if on the face of the document from which it is clearly stated:
i. The name of the forwarder as carrier or
combined carrier and signed or otherwise authenticated by the forwarder as carrier or combined
carrier, or
ii. Name of carrier or combination carrier and signed or otherwise authenticated by forwarder as
a named agent acting for or on behalf of carrier or combined carrier .
Article 31
"On deck", "Shipper loads and counts", Name of shipper
Unless otherwise specified in the credit, banks will accept a transport document which:
i. In the case of carriage by sea or by many means of transport, including carriage by sea, it is
not stated that the goods are loaded or will be stowed on deck.
However, banks will accept a transport document containing a provision stating that the goods
may be carried on deck, as long as the document does not specifically state that the goods are
or will be stowed on deck, and /or
ii. Include on the front a clause such as "shipper's counting and queuing" or "shipper declares
including" or the like, and/or
iii. It is stated that the shipper is someone other than the credit beneficiary.
Article 32
Perfect Transport Documents
a. A perfect transport document is a document without a clause or notation explicitly stating the
defective condition of the goods and/or the packaging.136
b. Banks will not accept transport documents containing such terms or
notations, unless the credit clearly stipulates what terms and notations may be
accepted.
c. If a transport document meets the requirements of this clause and of articles 23, 24, 25, 26,
27, 28 and 30, it will be deemed by banks to comply with the requirements. of a credit requires
the transport document to contain the note "perfectly loaded".
Article 33
Transport documents freight to be paid/prepaid
a. Unless otherwise specified in the credit, or unless there is a conflict with any document
presented under the credit, banks will accept transport documents indicating freight or freight.
download (hereinafter referred to as freight) has not been paid.
b. If a credit stipulates that a transport document must state that freight has been paid or
prepaid, banks will accept a transport document which clearly states that freight has been paid
or has been prepaid by stamp or otherwise on the document of payment or prepayment of
freight shown otherwise. If the credit stipulates that postage costs must be paid or paid in
advance, banks will also accept transport documents issued by the post office or delivery
service company stating that payment of the fee This is charged to the shipper.
c. The words "freight prepaid" or "freight prepaid" or the like, if indicated on the transport
document, shall not be accepted as proof of payment of freight.
d. Banks will accept transport documents with reference to, by stamp or otherwise, additional
charges in addition to freight such as: costs or payments related to loading or unloading or to
the business. similar service, unless the terms of the credit expressly prohibit such reference.
Article 34
Insurance documents
a. Insurance documents must be issued and signed by the insurance company or its
underwriters or agents.
b. If the insurance document clearly indicates that it has been issued in more than one original,
all originals must be presented, unless otherwise specified in the credit.
c. Temporary insurance slips issued by an insurance broker will not be accepted unless
specifically authorized in the credit.
d. Unless otherwise specified in the credit, banks will accept a certificate of insurance or
insurance declaration signed in advance by the insurance company or its underwriters or
agents. If a credit requires a certificate of insurance or an insurance claim statement, banks will
accept a replacement policy for such documents
.
e. Unless otherwise specified in the credit or unless the insurance documents stipulate that the
insurance takes effect no later than the date of loading that the insurance takes effect no later
than the date of loading on board the vessel or from the date of shipment. the date of shipment
or from the date of receipt for dispatch, banks will refuse an insurance document stating the
date of issue after the date of loading on board or dispatch or receipt of goods for dispatch as
indicated on the transport document. .
f.
i. Unless otherwise specified in the credit, the currency stated on the insurance document must
be the currency stated on the credit.137
ii. Unless otherwise specified in the credit, the minimum amount stated on the insurance
document shall be at the CIF price (price, insurance premium, named port of destination) or the
CIP price (freight and insurance payable up to). named place of destination) of the goods, as
the case may be, plus 10%, but only if the CIF or CIP price can be specified on the document.
Conversely, banks will accept an amount greater than between 110% of the amount payable,
accepting or discounting and 110% of the total commercial invoice amount as such minimum
amount.
Article 35
Types of Insurance
a. Credits are required to specify the type of insurance to be purchased and, if necessary, to
include additional risks to be insured. Don't use ambiguous words like "normal risk" or
"customary risk". If such words are used, banks will accept insurance documents as presented
without liability for any uninsured risks.
b. If there are no specific instructions in the credit, banks will accept documents as presented
without liability for any uninsured risks.
c. Unless otherwise specified in the credit, banks will accept insurance documents indicating
whether the coverage is deductible or non-deductible.
Article 36
All-risks insurance
In the case of a credit stipulating "all-risks insurance", banks will accept insurance documents
containing any "all-risks" notation or clause with or without title "all risks" even if certain perils
are not covered without liability for any uninsured perils.
Article 37
Commercial Invoice
a. Unless otherwise specified in the credit, commercial invoices:
i. Must appear on their face to be issued by the beneficiary specified in the credit (except as
provided for in article 48), and
ii. Must be established in the name of the person applying for the credit (except for section 48,
item b), and
iii. It is not necessary to sign
b. Unless otherwise specified in the credit, banks may refuse commercial invoices that include
amounts in excess of the amounts stated in the credit. However, if a bank is authorized to pay,
undertake to pay later, accept drafts or discount a credit that is accepting the invoice, then the
decision of this bank shall be binding on all parties. , provided that the bank does not pay, does
not undertake to pay later, does not accept drafts or discounts for amounts in excess of the
allowable credit.
c. The description of the goods in the commercial invoice must match the description of the
goods in the credit. In all other documents, the goods may be described in a general way that
does not conflict with the description of the goods in the credit.
Article 38
Other Documents
If a credit requires identification or weight certification in the
In case of non-sea freight, banks will accept weight stamps or weight declarations. on the
transport document by the carrier or his agent, unless the credit explicitly stipulates that the
identification or certification of the weight must be made by a separate document.
E. OTHER PROVISIONS
Article 39
Tolerances on amount, quantity and unit price in credit
a. The words "approximately", "approximately", "approximately" or similar words used to refer to
the amount of a credit or the quantity or unit price stated in the credit must be construed to
permit a variation. translate no more than 10% of the amount or quantity or unit price to which
the words refer.
b. Unless a credit stipulates not to deliver more or less than the specified quantity, a tolerance
of 5% or less is acceptable, as long as the amount of the payments does not exceed over the
amount of the credit. This tolerance does not apply when the credit specifies quantities in a
number of packages or a number of units.
c. Unless a credit prohibiting partial deliveries provides otherwise, or unless subclause "b"
above applies, a reduced tolerance of 5% of the payment amount will apply, provided that if the
credit stipulates a sufficient quantity of the goods to be delivered and if the credit stipulates a
unit price, that price shall not be discounted. This provision does not apply to the words in
subclause "a" above used in the credit.
Article 40
Partial payment/delivery
a. Unless otherwise stated in the credit, partial payment and delivery are permitted.
b. Transport documents indicating that the goods are carried on the same means of transport
and on the same journey as long as the same destination are not considered different delivery
and/or ports of loading. , delivery places to send or different places to send goods.
c. Shipments by post or by mail shall not be considered partial deliveries, if the postal or
carrier's receipt, postal receipt or waybill is stamped or signed. or otherwise confirmed on the
same day as the place from which the credit stipulates that the goods must be dispatched.
Article 41
Multiple Payments/Delivery
If a credit provides for payment and/or consignment in installments over certain periods of time
without payment and/or non-delivery within the period for the then the credit is no longer valid
for subsequent installments, unless otherwise specified by the credit.
Article 42
Expiry date and place of presentation of documents
a. All credits must specify the expiry date and place of presentation of documents for payment,
acceptance or the place of presentation of documents for discounting, except in the case of a
freely discounted credit. The expiry date for payment, acceptance or discount shall be construed
as the expiry date for presentation of documents.
b. Except as provided in article 44-a, documents must be presented on or
before the expiry date of the credit.
c. If the issuing bank provides for the credit to be valid for "one month" or "six months" ... but no
date is specified, the credit issuance date shall be deemed to be the commencement date of the
maturity. that effect. Banks should stop this way of specifying the validity period.
Article 43
Extension of expiry date
a. If the expiry date of the credit and/or the last day of the period for presentation of the
document specified in the credit or otherwise specified from the date of shipment within which
the transport document must be presentation in accordance with the terms of the credit. If no
such period is specified, banks will refuse documents presented to the bank 21 days after the
date of delivery. In any event, documents cannot be presented after the expiry date of the credit.
b. Where Article 40-b applies, the date of shipment shall be deemed to be the latest dispatch
date indicated on any transport document presented.
Article 44
Extension of Expiration Date
a. If the expiry date of the credit and/or the last day of the
document presentation period specified in the credit or specified in clause 43 coincides with the
date on which the bank ceases to work for reasons not must be the reason referred to in article
17, the stated expiry date and/or the last day of the period for presentation of documents from
the date of delivery in the case, shall be extended until the working day. first after that.
b. The latest date of delivery shall not be extended by reason of the extension of the expiry date
of validity and/or the last day of the period for presentation of documents from the date of
delivery specified in sub-clause (a) above. If the latest delivery date is not specified in the credit
or in the credit amendments, banks will refuse transport documents which date after the expiry
date of the credit specified in the credit. use or in credit modification.
c. The bank to which documents are presented on the first working day after
such leave shall include in the document a confirmation that the documents have been
presented within the grace period under article 44(a) of the UCP. as amended 1993, ICC
Publish No. 500.
Article 45
Hours of Presentation
Banks are not obligated to receive documents outside of their business hours
Article 46
General terms for delivery dates
a. Unless otherwise specified in the credit, the words "shipping" used to refer to the earliest
and/or latest dispatch date shall be construed to include words such as "shipping", "shipping",
"receiving for dispatch", "post-receipt date", "postal receipt date" and the same in the case of a
credit requiring combined transport documents from "receive goods for dispatch".
b. The words "fast", "immediately", "as soon as possible" and the like shall not be used. If used,
banks will not consider.140
c. If the words "on or around the date" and similar words are used, banks will interpret them as
delivery must be made between 5 days before and 5 days after the specified date of delivery.
The item includes both the first and last dates.
Article 47
Date words for delivery period
a. The words "to date", "until the date", "from the date" and the like are used to refer to any date
or period specified in the credit in reference to the date of delivery. including that day.
b. The word "after date" shall be construed as excluding that date.
c. The words "first half", "second half" of a month shall be construed as from the 1st to the 15th
and from the 16th to the last day of that month, including that date, respectively.
d. The words "beginning", "middle" or "end" of a month shall be understood as from the 1st to
the 10th, from 11 to 20th and from the 21st to the last day of a month, respectively.
F. TRANSFER CREDIT
Article 48
Transferable Credit
a. A transferable credit is a credit where the beneficiary (first beneficiary) may require the bank
to make payment, undertake to pay later, accept or discount (the transferor bank) or in In the
case of a freely transferable credit, the bank authorized in the credit is the bank that assigns or
transfers all or part of the amount to one or more other beneficiaries (second beneficiaries).
b. A credit can only be transferred when the issuing bank specifies it as "transferable". Words
such as "divisible", "divisible", "transferable" and "transferable" do not make a credit
transferable. If such words are used, the bank will not consider them.
c. The assigning bank shall not be obligated to effect such transfer, unless it agrees to the
extent and manner of the assignment.
d. During the transfer request period and prior to the transfer of the credit, the first beneficiary
must instruct the assigning bank whether or not to reserve the right to refuse permission to the
assigning bank to notify amendments. transfer to the second beneficiary. If the assigning bank
agrees to assign on such terms, it must, upon assigning it, notify the second beneficiary of the
first beneficiary's instructions of the amendments to the transfer order.
e. If a credit is transferred to more than one second beneficiary, a refusal to modify the
assignment by one or more second beneficiaries is void of acceptance by other second
beneficiaries. for the second beneficiary who has declined the amendment, the credit will remain
unchanged.
f. Transfer bank charges for the transfer of credit including commissions, fees or expenses shall
be paid by the first beneficiary, unless otherwise agreed. If the assigning bank agrees to assign
the credit, it will not be obligated to make the assignment, until such costs are paid.
g. Unless otherwise specified in the credit, a transferable credit may only be transferred once.
Therefore, the credit cannot be transferred at the request of the second beneficiary to any third
beneficiary. To effect this dikhi, a reassignment is allowed to the first beneficiary. Portions of a
transferable credit (not to exceed the total amount of the credit) may be transferred separately,
as long as it does not prevent delivery and/or partial payments are prohibited and the total of
such transfers shall be treated as one transfer of credit.
H. Credit can only be transferred under the conditions specified in the original credit, except:
- Amount of the credit
- Unit price stated in the credit
- Validity period
- No later than the date on which documents must be presented under provisions of article 43
- Term of shipment
All or any of the foregoing exceptions may be reduced. The rate to be insured may be increased
to reach the sum insured specified in the principal credit or in these terms. Alternatively, the
name of the first beneficiary may substitute for the creditor, but if the original credit requires the
name of the creditor to appear on any document other than the invoice , then the request must
be fulfilled.
i. The first beneficiary has the right to substitute his invoices and drafts for the bills and drafts of
the second beneficiary in an amount not to exceed the principal amount specified in the credit
and at a unit price. principal if stated in the credit and upon such replacement of the invoice (and
draft), the first beneficiary may pay the difference, if any, between the amount of his invoice and
the amount of the invoice of the second beneficiary. When a credit has been transferred and the
first beneficiary must provide the invoice (and draft) of the second beneficiary, but fails to do so
as soon as it is first requested , the assigning bank is entitled to deliver to the issuing bank the
documents received under the credit including the invoice (and draft) of the second beneficiary
without any further liability to the second beneficiary. two.
i. The first beneficiary may claim payment or discount to the second beneficiary at the place
where the credit is transferred until the expiry of the credit's validity, unless the original credit
stipulates that no payment or discount at a place other than that specified by the credit. This is
without prejudice to the right of the first beneficiary to substitute his invoice (and draft) for the bill
and draft of the second beneficiary and to claim any difference to which he is entitled.
G. ASSESSMENT OF REVENUE
Article 49
Transfer of proceeds
The failure of a credit to be designated as transferable does not affect the beneficiary's right to
assign any sums it collects or may receive under such credit is subject to the provisions of
applicable law. This provision relates only to the assignment of the proceeds and not to the
assignment of the right to exercise the credit itself.