Obstacles That Can Be encountered in Preparing Letter of Credit Documents

In our last article, we pointed out a question: "Does the institution which will edit the document agree to write it exactly as it is intended?" and we explained this problem with an example. Let's try to make this a little more clear in our article.

Among the documents requested in the credit will be what third parties can arrange. For example, we can show these documents;
* Shipping documents (such as Bill of Lading, FBL, CMR, ABL, CIM)
* Required certificates from the shipping company
* Insurance documents (such as Insurance Policy, Insurance Certificate)
* Surveillance Certificate (Ispection Certificate)
* Health documents (such as Phytosanitery Certificate, Health Certificate)
* Analysis documents (there may be different documents depending on the property of the goods sold)

Those who will prepare these documents are third parties. The credit specifies the definition of these requested documents, how they should be, the idioms and phrases that are meant to be written on them. The question we need to ask here is, "Will the organization that will prepare this document agree to prepare this document as it appears in full credit? Or will he not want to write some idioms and phrases?" To understand this, the way to find the correct answer to this question, the section with the description of the required document and the specified details when the credit is checked, send it to the organization that will prepare the document and ask, "Will you be able to prepare this document in this way?" If the answer is positive (it is useful to have the answer in writing), then there is no problem with it. If the answer is negative, we can look for the solution in two ways.
1) Finding another organization that is an alternative to the negative-response organization, asking the same question to this new organization.
2) If we cannot find another organization that responds positively, it is to ask our customer for corrections regarding the document in question.

As an example; The creditor may not want to write the phrase "Any notice or mark about additional costs are not acceptable on the Bill of Lading" on the requested Bill of Lading, the ship agent who will edit this document. If the agency we intend to work with states that it will not write this statement, it would be appropriate for us to find another ship agent who agrees to write this statement and work with it, or to ask our client for correction to remove this statement.

Another issue that needs to be noted about these documents mentioned above is the name of the document and in what capacity it will be signed by whom. For example, if the document requested in the letter of credit is called "Ocean Bill of Lading", the bank will not accept a document whose name is simply "Bill of Lading" or "Multimodal Bill of Lading". When it comes to signing, it is necessary to specify in what capacity the organization that regulates Bill of Lading has signed. The relevant article of the UCP 600 brochure of the ICC, which regulates the rules on accrediting, even if there is no requirement for signature in the accrediting, (mentioned below) specified how to sign Bill of Lading.

Article 20
KONŞIMENTO
a) a consignment, no matter how it is named,
i. show the name of the carrier and,
; by an agent named on behalf of the carrier or carrier; or
; by an agent named on behalf of the captain or captain,
must be signed.
Any signature issued by the carrier, captain, or agent must be identified as the signature of the carrier, captain, or agent.
Any signature by an agency must indicate that that agent has signed on behalf of the carrier or the captain.

The last word; Problems and solutions in credit are hidden in detail!
(We repeat our last word here as well)

We wish for days of export...

Hüseyin TEKGÜÇ
www.inovakademi.com