QUESTION
Dear Mr. Old Man,
We signed a contract to import goods from USA with the following terms:
CIP Noi Bai, Vietnam
Goods shipped by air
Payment by LC
We are preparing an application for issuance of LC and our bank (ABC Bank) requests us to include, among other documents required for presentation, an airway bill worded as follows:
ORIGINAL OF CLEAN AIRWAY BILL ORIGINAL NO 3 (FOR SHIPPER/CONSIGNOR) CONSIGNED TO ABC BANK MARKED ”FREIGHT PREPAID” AND NOTIFY APPLICANT WITH FULL NAME AND ADDRESS.
As far as I know, airway bill is not a document of title, hence, it cannot be transferred by endorsement. Please let me know if ABC Bank’s requirement is correct.
I appreciate your early answer.
Best regards,
TC
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ANSWER
Hi,
It is true that an airway bill is not a document of title, hence, unlike bill of lading, it is not transferable by endorsement.
If an airway bill is consigned to the issuing bank, the issuing bank will not endorse the airway bill but issue a delivery authorization to enable the applicant take delivery of the cargo once the applicant has fulfilled his obligation under the contract for issuance of LC, i.e., to deposit funds (in case the import transaction is self-financed) or to provide signed promissory note to the issuing bank (in case the import transaction is financed by the issuing bank) to cover the payment.
If at the time of applying for issuance of LC the applicant deposits funds 100% to secure the LC payment, the applicant can require an airway bill to be consigned to itself,
So now you can answer your question yourself.
Kind regards,
Mr. Old Man
Nhantran
April 15, 2015 at 11:45 am
Dear Mr Old Man,
If the awb show ” consignee to abc bank”, and the consignee on received awb show ” abc bank, ha noi”. Is it discrepancy if we base on Hochiminh city?
Thanks so much for your support.
Have a nice day!
Nhantran
April 15, 2015 at 1:14 pm
sorry, I have mistakes; The L/c required the consignee on Awb: ” abc bank”.and the consignee on received awb show ” abc bank, ha noi”. Is it discrepancy if we base on Hochiminh city?
Thanks so much for your support.
mroldman
April 15, 2015 at 10:22 pm
According to UCP 600, branches of a bank in different countries are considered to be separate banks. This makes us understand that branches of a bank in the same country should be considered to be one bank. Therefore, in my opinion, the fact that the AWB shows ABC Bank Hanoi or Ho Chi Minh City does not make it discrepant. I treat the added wording as additional information.
Nhantran
April 16, 2015 at 11:32 am
Thanks for your kind support. However, in my opinion, letter of delivery authoriation issued and stamped by abc bank, hochiminh city may not be accepted. Do you agree with me?
Thanks so much.
Have a nice day!
mroldman
April 16, 2015 at 1:08 pm
Agreed. An explanation can help solve the problem.