When the Shipper Isn’t the Shipper — or Is It?

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?

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Question

Dear Mr. Old Man,

The LC states that the shipper in the bill of lading must be the beneficiary, PQR.

However, the presented bill of lading shows: Shipper: ABC on behalf of PQR.

Is this acceptable?

Regards,

Rohini Mehta

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Answer

Dear Rohini,

Yes. Legally, the phrase “ABC on behalf of PQR” indicates that PQR is the actual shipper, and therefore the LC requirement is fulfilled.

The bill of lading is acceptable.

The issuing or nominated bank is not required to verify whether ABC was actually authorized or requested by PQR to ship the goods on its behalf; such matters fall outside the bank’s documentary examination responsibility.

Best regards,

Mr. Old Man