“By payment”, “by negotiation”, “by deferred payment”, “by acceptance” — same LC, different risks. But who really carries the burden when things go wrong?” A common question from trade finance practitioners — and one that sparks more debate than you’d expect. When an LC says “by payment” or “by negotiation”, who really bears the risk if things go sideways? Let’s …

Intro Sometimes, the devil really is in the description. A letter of credit may ask for a “full description of goods,” and exporters wonder whether they can simplify the wording in their invoice — especially when only one mode of shipment applies. This question from Mr. Nishanth is a good example of how to balance what’s required by the LC …

Intro: A reader recently asked an interesting question about fees under a letter of credit. When an LC expires, does that mean the applicant no longer has to pay commitment fees to the issuing bank? Let’s take a closer look. __________ Question: Good morning, Sir! Thank you so much for all your efforts in making trade finance information more accessible. …

Sometimes a Bill of Lading can make bankers frown for all the wrong reasons. We’ve seen cases where it shows an “intended port of loading” and that’s fine under UCP 600, but what about when it shows an “intended port of discharge” instead? Does that make it discrepant? Let’s see what happens when Durban plays both roles — as the …

Article 35 UCP 600 Does Not Apply to an L/C Available with the Issuing Bank by Payment, Deferred Payment, or Acceptance   INTRODUCTION From time to time, LC practitioners raise concerns about what happens if documents are lost in transit between banks. Article 35 of UCP 600 seems to provide clear protection — but when and to whom does that …

Insurance documents under a Letter of Credit can be tricky — especially when the LC calls for a document “in negotiable form” or “issued to the order of” a bank. What exactly does “negotiable form” mean? When is an endorsement required? And what happens if the LC doesn’t specify who the insured party should be? Below is a detailed question …

INTRO At first glance, it may sound reasonable to make a usance LC “available with any bank.” After all, the more flexibility for the beneficiary, the better—right? But in practice, things are rarely that simple. Under UCP 600, a nominated bank has no obligation to act unless it agrees to do so. That small detail makes all the difference, as …

In documentary collections, banks usually handle the remittance of funds and documents — but does it have to be a bank? What if a finance company steps in to manage the process? Let’s look at how a finance company can act as a remitting bank and how payment can still flow smoothly, even without its own nostro account. Question Dear …

Sometimes, a little phrase like “on behalf of” saves a lot of trouble — as long as it clearly links back to the beneficiary named in the credit. Here’s a case where the bill of lading shows the shipper acting on behalf of the beneficiary. Is that acceptable? _______ Question Dear Mr. Old Man, The LC states that the shipper …

Intro A seemingly small issue, yet one that often stirs debates among LC practitioners: Can a bill of lading and its attached page — signed by different offices of the same carrier — still be accepted under the LC?  Here’s what Mr. Old Man thinks. _____ QUESTION Dear Mr. Old Man, The LC calls for a bill of lading. The …