Discrepancy In Commercial Invoice

The commercial invoice is the commonest document in international trade because nearly no letter of credit issued without stipulating an invoice. In most cases, commercial invoice is the only document which the beneficiary issues himself which is in accordance with UCP 600, article 18(a)(i), “…A commercial invoice must appear to have been issued by the beneficiary (except as provided in article 38).”

It is the primary document where it reflects out what the goods are in respect of which presentation is been made and it states the price which is being claimed in respect of them. It serves as an accounting document and documentary evident in which the seller declares that he has sold to the buyer, what he has sold and at what price he has sold.

With regards to the commercial letter of credit, an invoice is a specific document which is closely related to the goods/services, quantity and price. The “description” of the goods is normally the cause for discrepancy which resulted in rejection by banks. This is because most of the traders do not understand the implications of non compliance.

To describe details of the goods should not at all be a major problem because it should go according to what is already described in field 45A of SWIT format. It is as simple as copying the description in a letter of credit into an invoice. For example, if the description in field 45A states “Advertising balloons and advertising blimps: 100 sets of helium balloons, 150 sets of advertising balloons and 50 sets of advertising blimps”, the invoice should bear the same description.

However, article 14(d) of UCP 600 in a way, provides allowance to the beneficiary where the description of the goods/services need not be identical but must not conflict with any data in any other document called for under the letter of credit. But bear in mind, a slightest mistake which brings a different meaning and does not refer to the goods mentioned in the letter of credit or ambiguous description, it is deemed to be a discrepancy by the bank. Therefore, to avoid any unnecessary disputes later on, the "description" is best to appear as a mirror-image.

The description of the goods/services in Insurance Certificate or Bill of Lading for example, may be described in general and need not be exactly as what is described in the invoice or letter of credit. It can be as general as “Advertising balloons and advertising blimps”. On principle, all data contents in all documents and the letter of credit itself must not conflict with each other.

S.W.I.F.T

Society For Worldwide Interbank Financial Telecommunication or in short SWIFT is a private international telecommunication network which was established in Belgium in early 1970s and became operational on May 9, 1977. SWIFT however, is not a financial institution but provides telecommunication service for transmission of financial and non-financial messages to all member banks worldwide. SWIFT is solely a transporter of messages. It does not hold funds nor does it manage accounts on behalf of customers, nor does it store financial information on an on-going basis.

As a message transporter, SWIFT transports messages between two financial institutions. This activity involves the secure exchange of proprietary data while ensuring its confidentiality and integrity.By introducing IPSec-based security, a suite of protocols for securing Internet Protocols (IP) communications, SWIFT continues to maintain its leadership in providing the most secure financial messaging services.

Interested e-commerce community who wish to get connected with SWIFT may subscribe to their direct connectivity facility using SWIFTNet services. Before subscribing, it is advisable to access to web hosting articles to find out more information on various ranges of software and security features available in the market.

Web hosting articles provide good source of information for the public, particularly e-commerce community in obtaining a holistic understanding on how the electronic medium works in message transmission while at the same time maintaining the security that is the most important feature.

Every bank that subscribes to SWIFT is assigned with a Bank Identifier Code or BIC which is a unique code to identify each different bank. For example, RHB Bank, one of the anchor banks in Malaysia and a member of SWIFT is identified with the BIC, RHBBMYKL. When SWIFT sends any message to this BIC, it will reach RHB Bank head office in Malaysia. It works on a basic concept similar to an email address or domain name as explained in many web hosting articles over the internet. There are two types of BIC, 8 character BIC or known as "BIC8" and 11 character BIC which is known as "BIC11". A BIC8 identifies a financial institution in a country or a location whereas BIC11 identifies the financial institution’s branch.

Messages sent through SWIFT are formatted according to message type, for example, MT100, MT700, MT202, MT799 and so on. The format is arranged using a specific alpha numeric code to identify data like name of beneficiary, name of a bank, location, amount, sender and other related information. This will enhance the processing of different type of messages by member banks before transmitting them to their respective branches.

High-tech cargo theft

The transportation industry in the U.S is reported to be within the circa of USD2.7 trillion. This statistic represents 17 percent of the whole U.S economy. Out of this, it is reported that around USD30 to USD50 billion worth of cargo is stolen worldwide each year. This alarming figure demands a serious security measure to be integrated into the transportation and delivery processes especially when dealing with high-tech cargo, for example electronic devices. These items are essential in industrial automation and attract high demand worldwide in pursuing to lower the cost of production and enhancing operations.

Trading parties, therefore need to conduct due diligent on transport operators or forwarding agents before appointing one. This is important for both trading parties because the movement of the cargo from the point of origin to the final destination should be readily updated and accessible at any time to both parties.

The security measures increasingly critical when dealing with parties of different countries. For example, ABC Technology, a company located in Malaysia is buying solid state relays, electromagnetic relays and relay socket PCD from Mil-Com Components, a company domicile in the U.S. Even if the trade term CIF is agreed upon by both parties, the buyer still can make a suggestion to the seller, Mil-Com to appoint a well established transport operator which also has an office in Malaysia. Although, the obligation to contract for transport lies in the hand of the seller, but the buyer may determine which transport operator he is comfortable with.

However, there are many other aspects leading to loss of cargo or stolen cargo such as the spread of global crime syndicates where a new breed of smarter criminals able to adapt to the new technologies of the cargo transportation industry.