Switch Bills of Lading: Issue Date vs. On-Board Date under UCP 600 In documentary credit practice, questions often arise about the relationship between the bill of lading issue date and the on-board date—especially in cases involving switch bills of lading and high-seas sales. Can the two dates differ significantly, and if so, what do UCP 600 and ISBP 821 say about it? QUESTION Dear Mr. Old Man, May I seek your opinion … Read More
Revolving Letters of Credit: Key Considerations and Hidden Risks Revolving letters of credit (RLCs) sound attractive for handling multiple shipments under one instrument. In theory, they save time and paperwork; in practice, they raise complex issues for both banks and traders. Before opening an RLC, it’s worth understanding how they work, the key points to watch out for, and why they are rarely used today. _______ QUESTION What are … Read More
NGHỈ HƯU CŨNG CÓ CÁI ĐỂ KHOE (English version below) Mr. Old Man “về vườn” đã hơn 4 năm, giờ thành tỷ phú thời gian nên ngày nào cũng lai rai một bài trên www.mroldman.net – MR. OLD MAN – For Those Who Eat, Sleep and Breathe Letters of Credit & Cycling. Đạp xe đường dài thì không còn nữa, nhưng bù lại, các bài viết và Q&A … Read More
Why Would a Buyer Prefer an LC While a Seller Prefers an SBLC? When it comes to trade finance, one of the recurring debates is whether to use a commercial Letter of Credit (LC) or a Standby Letter of Credit (SBLC). At first glance they may look similar, but in practice buyers and sellers have very different preferences. Buyers lean toward LCs, while sellers often push for SBLCs. The reasons lie in how … Read More
FOB, CFR, CIF vs. Container Shipments: Why Theory and Practice Don’t Always Match Intro One of the recurring debates in Incoterms is whether FOB, CFR and CIF should ever be used for containerized shipments. The theory says “no,” but in practice, traders and banks keep using them every day without issue. Let’s look at why the theory clashes with practice, and what happens with FCL and LCL cargoes. _________ Question One of the … Read More
Why Is an Air Waybill Non-Negotiable While a Bill of Lading Can Be Negotiable? In trade finance, one of the most common questions is why an Air Waybill (AWB) is always non-negotiable, while a Bill of Lading (BL) can be either negotiable or non-negotiable. The answer lies in the legal nature of the documents and the rights they confer. QUESTION Thanks for your valuable trade related write up. I’m from Pakistan I need your … Read More
Should an Issuing Bank Require a Master Bill of Lading? In practice, many banks and traders get confused between the Master Bill of Lading (MBL) and the House Bill of Lading (HBL). The question is: should an issuing bank insist on receiving an MBL under a Letter of Credit? QUESTION Thanks for your valuable trade related write up. I’m from Pakistan I need your answer to the following question: Why … Read More
Irrespective of Percentage vs. Deductibles – A Conflict in Insurance Documents under LCs One of the recurring issues in LC operations is how to handle insurance documents that contain both the phrase “irrespective of percentage” and a deductible clause. Traders often assume the “irrespective of percentage” wording will override the deductible, but under UCP 600 and ISBP 821, the story is different. Let’s look at a real case. __________ QUESTION Dear Mr. Old … Read More
Thư tín dụng hết hạn khi ngân hàng ngừng hoạt động vì bất khả kháng: Thanh toán hay từ chối? Phân tích Điều 36 UCP 600 từ một thảm họa thực tế Nguyễn Hữu Đức Tóm tắt Các sự kiện bất khả kháng như thiên tai, chiến tranh, khủng bố có thể buộc ngân hàng phải ngừng hoạt động, làm gián đoạn việc xuất trình và xử lý chứng từ theo thư tín dụng (L/C). Điều 36 UCP 600 quy … Read More
Understanding UCP 600 Sub-article 30(c) – The 5% Tolerance Rule Intro Article 30(c) of UCP 600 looks short, but it’s one of those rules that makes bankers and traders scratch their heads. Let’s unpack sub-article 30(c) together, with an example to make it real. _____ QUESTION Hi, Article 30(c) of UCP 600 states: Even when partial shipments are not allowed, a tolerance not to exceed 5% less than the amount … Read More