Negotiation Credit with Expiry in the Issuing Bank’s Country: Where Should Documents Be Presented? A negotiation credit is normally expected to expire in the beneficiary’s country, where the nominated bank is located. But what happens when an L/C is available by negotiation with any bank in the beneficiary’s country while the place of expiry is stated in the issuing bank’s country? This question highlights an unusual drafting issue that could expose the beneficiary to … Read More
Liquidated Damages Clause and Force Majeure under a Letter of Credit If the exporter fails to ship the goods due to a force majeure event, can the importer still claim liquidated damages for the non-shipment? This is a question that occasionally arises in letter of credit practice. The answer lies in distinguishing the bank’s obligations under the LC from the parties’ rights and obligations under the underlying sale contract. Let’s look … Read More
Does a Digitally Authenticated Invoice Satisfy an L/C Requirement for Chamber of Commerce Authentication? Intro: Many letters of credit require a commercial invoice to be “authenticated by the Chamber of Commerce.” As Chambers of Commerce increasingly issue electronic documents with digital seals and QR codes, a common question arises: does a digitally authenticated invoice satisfy such an L/C requirement? Let’s look at the following Q&A. Question Dear Sir, Good day! We have an LC … Read More
Documents Lost in Transit: Must the Issuing Bank Honour If the Nominated Bank Retained No Copies? Introduction Article 35 of UCP 600 protects a nominated bank when documents are lost in transit after it has determined that the presentation is complying. But what happens if the documents are later found to have been discrepant, or the nominated bank cannot prove that it examined them because it retained no copies? The following question explores an important practical … Read More
Bill of Lading Shows an Incomplete Email Address – Is It a Discrepancy? If a letter of credit requires the notify party’s email address to appear in the bill of lading, what happens if the email address is shown without the “@” symbol or “(AT)”? Should this be treated as a discrepancy, or can it be regarded as a simple typographical error? Let’s look at the following Q&A. Question Dear Mr. Old Man, … Read More
Is an Additional Place of Delivery on a Bill of Lading a Discrepancy? A bill of lading sometimes contains transport details beyond those required by the letter of credit, such as a Place of Delivery in a different country from the Port of Discharge. Does this additional information create a discrepancy when the LC is silent on it? This Q&A explains the UCP 600 position and why such an entry is generally acceptable, … Read More
Is an Additional Place of Delivery on a Bill of Lading a Discrepancy? A bill of lading sometimes contains transport details beyond those required by the letter of credit, such as a Place of Delivery in a different country from the Port of Discharge. Does this additional information create a discrepancy when the LC is silent on it? This Q&A explains the UCP 600 position and why such an entry is generally acceptable, … Read More
Insurance Endorsement: Who Should Endorse When the Policy Is Issued “A/C” the Beneficiary? It is not uncommon for an insurance policy or certificate to be purchased by a freight forwarder or another intermediary for the account of the beneficiary. Does this affect who must endorse the insurance document when the L/C requires an endorsement by the assured? Let’s look at the following question. Question Dear Mr. Old Man, Greetings for the day. I … Read More
Domestic L/C: Can the Issuing Bank Refuse a VAT Invoice Issued After the Shipment Date? Under a domestic letter of credit subject to UCP 600, can an issuing bank refuse a presentation simply because the VAT invoice was issued after the shipment date, even though this appears to be inconsistent with Vietnamese tax regulations? This question highlights the distinction between documentary examination under UCP 600 and compliance with domestic law. Question Dear Mr. Old Man, … Read More
Bill of Lading Blank Endorsed by the Shipper but Subsequently Endorsed by the Presenting Bank: Is It LC Compliant? Letters of credit frequently require a bill of lading (B/L) consigned “To order” and blank endorsed. But what happens if, after the shipper has blank endorsed the B/L, the presenting bank subsequently endorses it “To order of DEF Bank”? Is such an endorsement legally valid? More importantly, does the document still comply with the LC requirement? The following question explores … Read More