SWIFT Confusion

The issuing bank is responsible to ensure not only completeness of the Letter of Credit but the most important is to make sure all the data which forms the terms and conditions of the Letter of Credit is correct, clear and does not open to multiple interpretation before it is advised to the beneficiary. Legally speaking, Letter of Credit is in fact a form of a contract that is a contract of payment. Therefore, the terms and conditions laid out in an LC should be precise and clear.

Recently, a question came from one of the readers asking about the following problem. He received an LC with the following conditions:

44E: Port of loading/Airport of departure

+Bangkok Port, Thailand

45A: Description of goods and/or services

+400metric ton abc. FOB Thailand

He wants to know whether the information in field 44E and field 45A above is correctly indicated.

Field 44E (Port of loading/Airport of departure) and field 44A (Place of Taking in Charge/Dispatch from.../Place of Receipt) are fields specifically to indicate the point of delivery. This is the point where the seller technically delivers the goods to the buyer and the buyer accepts the said delivery. At this point, the delivery by the seller is said to have been completed. In other words, the seller must ensure the point of delivery by referring to field 44E only.

Is it necessary to indicate the point of delivery in field 45A? In the above example, name of the port that is “Bangkok Port” is not indicated. Is this ambiguous?

Field 45A is specifically to describe the goods or services and to indicate the trade term agreed upon by both parties. Therefore, the name of the port need not appear again in this field. Nevertheless, it is not wrong if the buyer wish to indicate again the name of the port in this field. However, it makes no difference whether it is indicated or not as information in field 44E is already conclusive.