WHERE BL IS REQUIRED TO SHOW BOTH APPLICANT AND ISSUING BANK

QUESTION

Dear Mr. Oldman,
Good day,

I’m Stefan a banker from Switzerland who just entered the beautiful world of L/C’s.

I want to also add that I’m a big fan of yours and I often check your blog when I look for “answers”.

I’m contacting you because I have a very interesting case of study:

We (advising/negotiating bank), received an export L/C (to be advised to our customer) and under field 46A, issuing bank, requires the B/L to show as consignee “Applicant + Issuing bank details”.

Personally we never had such case and we are trying to understand at this point if such request is feasible, who owns the goods and more importantly who can endorse the B/L?

Waiting for your feedback on this case.

Thanks in advance and best regards,
Stefan J.

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ANSWER

Dear Stefan,

Yes, it is a very interesting case study that I have never come across before. If LC requires B/L to show both Applicant and Issuing Bank as consignee, the presented B/L must show as required to comply with the LC requirement.

As you do not make clear whether B/L is consigned to Applicant and Issuing Bank or to the order of Applicant and Issuing Bank, I would like to answer for the two cases as follows:

Case 1:  B/L consigned to Applicant and Issuing Bank, no endorsement is needed as it is a straight B/L. The issuing bank shall authorized the applicant to take delivery of the cargoes.

Case 2: B/L  made out to the order of Applicant and (to the order  of) Issuing Bank, (i) both parties must endorse the B/L; or (ii)  the issuing bank authorizes the Applicant to endorse on behalf of the issuing bank and on behalf of himself. In the latter case, the shipping company may require the Applicant to submit the issuing bank’s written authorization.

Just my own opinion!

Kinhd regards,

Mr. Old Man