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TRANSFERABLE LC

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QUESTION

John writes:

Dear oldman,

I am middle man who got the order from the buyer and requested my supplier to ship directly to my customer on CIF terms. How can I make sure that my supplier name is not appeared in bill of lading.
Do I have to talk to the same carrier that my supplier is shiping and get it switched to my name and send my own invoice to buyer? or request supplier to ship on my name?

If he ships on my name then I have to put my invoice and my margin would be know to my supplier.

What would be the best option for me to hide both supplier and buyer from each other.
———-
ANSWER

Dear John,

You should ask the buyer to open a transferable L/C in your favour, and then you ask the transferring bank to transfer the L/C to the supplier/second beneficiary. B/L showing any party as shipper is acceptable. So you can require the B/L to indicate your name as shipper. When the supplier/second beneficiary presents the documents to the transferring bank, you can substitute your own invoice and draft.

This way can help prevent the buyer and the supplier from knowing each other, and help prevent the supplier from knowing the margin that you earn..

Switch B/L is very complicated. Better not.

Best regards,
Mr. Old Man

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4 Comments

  1. Muzammil Hayath

    July 29, 2017 at 5:07 pm

    HI MR OLD MAN
    I WOULD LIKE TO ASK CERTAIN QUESTION HOW TO POST QUESTIONS IN THIS BLOG

    Reply

  2. Hayath

    October 4, 2017 at 8:17 pm

    Thank You Mr old man for sharing your e mail id ….

    With regard to the above answer, in Bracket (B/L showing any party as shipper is acceptable. So you can require the B/L to indicate your name as shipper),if second beneficiary shows the First Beneficiary as shipper then who will be the consignee and who will be notify party..how to handle this changes….

    Please advice us….

    Reply

    • mroldman

      October 4, 2017 at 9:17 pm

      Under L/C consignee would be “to the order of issuing bank” or “to order blank endorsed”, notify party would be the applicant.

      Reply

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