Handling Surrendered Bills of Lading and Electronic Document Transmission under a Documentary Credit

The following question concerns an amendment request to accept surrendered bills of lading and scanned documents under a documentary credit, prompted by the suspension of courier services. It raises some practical considerations for issuing banks regarding document handling and control over the goods.

QUESTION

Hi,

Hope everything goes well with you.

We received the following amendment requests from the applicant:

• Surrendered Bill of Lading is acceptable.
• Telex copy of surrendered Bill of Lading is acceptable.
• Scanned copies of all documents stated under F46A sent by the nominated bank via email to the issuing bank are acceptable.

This request is due to the suspension of DHL services.

Could you please explain the implications and provide some recommended practice in this situation?

Thanking you in advance.

Ziyad

________

ANSWER

Dear Ziyad,

Thank you for your question.

First, I would like to refer you to ICC Banking Commission Technical Advisory Briefing No. 17, which addresses the handling of surrendered bills of lading under documentary credits subject to UCP 600. The briefing was published on 2 February 2026 and can be accessed at the following link:

https://library.iccwbo.org//content//tfb//BRIEFINGS//20260127_TA_Briefing_No_17_Surrendered_BL.pdf

I am not aware of the exact terms and conditions of the original LC. However, based on the amendment requested by the applicant, it appears that the shipment may involve a surrendered bill of lading (telex release) arrangement.

In such cases, the shipper surrenders the original bill of lading to the carrier at the port of loading. The carrier then instructs its agent at the port of discharge to release the cargo to the named consignee without requiring presentation of the original bill of lading.

A surrendered bill of lading is commonly associated with a straight bill of lading, as the carrier must clearly identify the consignee before releasing the goods without presentation of the original document. As a result, the beneficiary normally holds only a copy of the bill of lading stamped “SURRENDERED.” This likely explains why the applicant is requesting the LC amendment to accept surrendered B/Ls, telex copies, and scanned documents sent by email.

However, if the issuing bank agrees to such amendments, it should be aware that the bank may lose effective control over the goods, since the applicant could potentially obtain the cargo before the bank receives and examines the documents.

From a risk management perspective, the issuing bank may consider accepting such amendments under certain conditions.

First, where the LC is settled using the applicant’s own funds, for example when the applicant has provided a 100% cash margin for the LC amount. In some cases, a lower margin may also be acceptable if the applicant is a long-standing and financially sound customer.

Second, where the LC is financed by the issuing bank, the applicant should undertake to promptly sign the required loan drawdown or debt acknowledgement documents, in accordance with the credit facility agreement, once notified by the issuing bank that complying documents have been received.

In addition, the applicant should authorize the issuing bank, under the credit facility arrangement, to debit the applicant’s loan account for settlement of the LC should the applicant fail to provide the required funding or documentation in time.

The above comments are based on assumptions derived from the amendment request you described. Your bank should assess the specific circumstances of the transaction and the applicant’s risk profile before deciding whether to accept such amendments.

It should also be noted that the issuing bank is under no obligation to accept an amendment request if it considers the associated risks unacceptable.

Best regards,
Mr. Old Man