WHERE 1/3 ORIGINAL BILL OF LADING IS TO BE SENT DIRECTLY TO THE ISSUING BANK

QUERY FROM LTT

Hi Mr.Old Man,

We, advising bank, receive an LC in which F46B requires:

+2/3 set of original clean BL made out to order of issuing bank
+…..
+Ben's certificate certifying that 1/3 of negotiable shipping documents to be couriered to issuing bank within 3 working days of shipment date.

I am wondering why the credit requires that since our bank shall at last forward the documents to the issuing bank? what does the issuing bank need the 1/3 set of negotiable docs for?

Please clarify this for me.

Thank you so much.

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ANSWER

Hi,

The nominated bank, the confirming bank (if any), and the issuing bank each may have a maximum of five bank days following the date of presentation to determine if the documents are complying whereas shipments, for example, from HCMC port, Vietnam may arrive at Malaysian port within 72 hours or less than that. This means that the goods may arrive before the documents.

If this is the case, the applicant cannot take delivery of and clear the goods as he does not have the original bill of lading (duly endorsed) and/or other related documents (e.g., invoices, certificate of origin…).

So, the fact that 1/3 set of negotiable documents or one set of non-negotiable documents plus 1/3 original bill of lading is requested to be sent directly to the issuing bank or to the applicant within three working days after shipment date is aimed at enabling the applicant to take delivery of and clear the goods and avoid demurrage and/or storage charges in case the goods arrive before the documents.

Best regards.
Mr. Old Man
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From LTT

I thought of this at first as well. It is true that the applicant is in Malaysia. I do not know the cargo arrives that fast. I thought it would be at least 10 days.

Thank you Mr Old Man.

As the advising bank, we receive and examine docs before forwading them to foreign bank. Our customer sometimes presents docs at our bank after the expiry date 1 or 2 days and requires us not to cite late presentation as a discrepancy in the bill schedule since the fee is pretty high. It is a sensitive matter so I do not accept it. I am new in this area so I am not sure. Maybe I would help our customer by shortening my 05 working days of checking docs.

I would be pleased to hear your opinion.

Regards,
Trang
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ANSWER

Hi,

Some banks still act in the same manner as yours, i.e., making full use of five banking day gap to save their customers from the discrepancy “late presentation”.

Such a dishonest action is not encouraged.

Regards,
Mr. Old Man