11 February 2009

Original And Copies

This is a very confusing topic for most of traders as well as bankers. The difference is only technical. In fact, I had tough time checking documents under letter of credit when it comes to establishing original or copies. 

Documents like Insurance Certificate, transport documents, official documents issued by third party do not require so much of scrutinizing as they are issued regularly on a daily basis to traders. 

These documents are always issued in original and copies. The problem is with the beneficiary or seller when issuing invoice or packing list.

What is original?

From the letter of credit point of view, original document is a document which does not bear any statement saying “copy” on the face of the invoice, for example. 

Even if the invoice is issued using preprinted stationery complete with address, contact number, seller’s trading mark and signed but bears a statement or stamp says “copy”, it is deemed to be a copy and not original. In the absence of the statement or stamp “copy”, the invoice is considered as original.

I had come across an invoice during my days way back in 1980s, from Hong Kong. It was hand written, signed and stamped with Chinese character in red. It did not bear any statement “original” or “copy”. 

This is, from the letter of credit point of view, an original invoice. An invoice which is computer generated is also original even if it is not signed by the issuer and does not bear statement “copy”. But if the letter of credit specifically requests for a signed invoice, it should be signed.

As a general rule, invoice issued using an issuer’s original stationery and does not bear any statement “copy” or computer generated or a carbon copy bearing the statement “original” is considered original. 

Take Bill of lading for example, it is always issued in multiple original, 1st original, 2nd original 3rd original and so on. The 2nd original onwards is customarily issued in carbon copies. But they are considered original because they bear the statement “original”.

To be safe and not to be caught with unnecessary discrepancy, I encourage you to issue all your invoices in original. Letter of credit may request 2 original and 2 copies. It is not a discrepancy if you present all 4 invoices in original.

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