What happens when documentary credit does not align with shipping realities

Recently, there was a debate in banking circles and ICC related to a documentary credit that demanded “A copy of the bill delivered” To provide

What was presented in return was “3 main bills of load” Contains the phrase “The main bill was submitted in the origin” In the body of the bill. ..

The bank rejected the presentation that what was presented is not “copy” but 3 out of 3 main loading bills, and none of them contain a stamp of submission.

Failure to support the facts of practical transportation

While this is completely created in bank circles, I see it as a reminder that some banking practices reflect the practical realities of transportation.

Here’s why ..

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When a loading bill is issued as a negotiable document sent to a bank (which is not the final recipient), a main bill approved by the bank to the final recipient is required to transfer the title to the final recipient and the released goods.

The airline’s destination office usually expects to show the final approval to the final recipient before the goods are released.

Now, if the main loading bill has already been originally submitted to the carrier, then how can this verification or transfer of the title be transmitted from the bank to the recipient.

So why, require a “Copy of the Submitted Bill” Even accepted by the bank, when the only way that such a document can be realistic is that if:

1. The carrier gave his bank one or more items to confirm Before Present .. ..
2. The ones who had been approved then submitted to the carrier.
3. The telecommunications company put a “surrendered” stamp on them and provided a copy to the carrier.
4. The carrier then submit it to the bank with the rest of the documents ..

In practice, it is very unlikely that banks will allow this sequence. If I make a mistake, the bankers or exporters will correct me ..

Incorrect “Submitted Bill”

It is worth noting that this term “The Bill of Submitted” It is a misconception .. There is no such bill .. Submission is a process, not a document.. ..

Submission occurs when one or more of the main loading bills are delivered to the carrier by the carrier.

The purpose of submission is usually or is:

• No time to send the original copy of the paper to the recipient in the destination (such as short sea transactions) or
• The carrier is easier to submit to the document at the origin, not to pay for it.

This process is simple:

1. The carrier submits one or all of the principle to the carrier (or their representative) ..
2. The Office of the Submitted Shipping Company and the destination office by email or updating their online system.
3. The sender can collect the goods without providing the original billing.
4. A “surrendered” stamp may be placed for the carrier’s internal records and confirm that the bill has been properly evacuated and carried out. Sometimes a copy is given to the carrier, but not always.

Unanswered questions

Beyond banks that do not fully consider the facts of transportation, there are other questions:

• How the carrier obtained three main loading bills that do not contain surrender stamp, but carried the typed text “The main bill submitted to the origin”. ??
• In the years of my experience in business and the signing of countless bills of loading, I have never seen a situation to be given a carrier All 3 principles after submission to Origin ..
• If all the authenticity was really surrendered, the carrier should not return them to the carrier at all.

These conditions are severely illustrated by the carrier. A airline should never and never issue a bill that previously has the symbol of “the main bill submitted at the origin”, and not after the submission is submitted to the carrier.

Bank responsibility

Another point in the discussion was: “The Bank of the issuer was responsible for explaining how” submission “was evident on the release of the bill.”

This explanation is clear: If a “version of the bill is needed” is the only way to prove it with a “submitted” stamp, originally put by the telecommunications company, with that version being sealed, then submitted under validity.

Endful thoughts

This highlights the importance of aligning bank needs with the facts of transportation.

Documentary credits that demand documents that do not exist in practice, or are not rationally produced, endanger all parties – transportation, bank and telecommunications company.

Here the need for banks to better understand and explain the applications of transportation to their customers, both applicants and beneficiaries.

In this case, it seems that neither the issuing bank, nor the candidate bank, nor the beneficiaries of the “copy of the delivery bill”.

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