Uncategorized WHERE BILL OF LADING IS ISSUED TO THE ORDER OF THE APPLICANT By Mr Old Man Posted on July 6, 2010 3 min read 9 0 5,487 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr QUERY Mich writes: Mr Old Man. Please advise where can I find your message box to direct new questions to. Meanwhile, I have a question. I received a export LC where BL called for is made out to order of applicant (buyer). My client also request to follow export LC, so import BL is made out to order of applicant (buyer). I understand while this will complies as conditions for negotiation under export LC, would there be risks involved (eg fraud) as far as my bank is concerned?——– COMMENT Hi Mich, Just click Mr. Old Man’s avatar in your friend list, you’ll see the message box to Mr. Old Man. Click this box to compose your question and then send it to Mr. Old Man. Risks to the beneficiary in the case of B/L being made out to the order of the applicant may include: – Risk of non-payment or payment delay: This occurs when 1/3 original B/L made out to the order of the applicant is forwarded directly to the applicant and the presentation made by the beneficiary is not complying with the credit terms and conditions. An unworthy applicant that has taken delivery of the goods can make use of this loophole to make no payment or delay payment obligations. – Risk of non-endorsement: If the documents presented under the L/C are not complying and eventually the applicant refuses to take up, the applicant is not obligated to and may not endorse the B/L back to the beneficiary or to the order of the new buyer as requested by the beneficiary. These above risks can be avoided if the beneficiary ensures that the documents presented are complying. The issuing bank must honour a complying presentation whether the B/L is issued to the order of the applicant or the issuing bank. Abundant caution does not harm. Never accept to send one set of the original BLs made to the order of the applicant directly to the applicant. Best regards,Mr. Old Man