Field 46A (Documents required) is also another optional field. However, in most commercial LC, this field is always presents. This is where all the documents required pertaining to that particular trade described in the LC should be expressly indicated.
This includes type of documents, number of copies as well as photocopy or original piece. As a general rule, at least one original of each document stipulated in the LC must be presented (Article 17(a), UCP 600). Documents are categorized as financial documents, commercial documents, transport documents, insurance documents and official documents.
Drafts or Bills of Exchange (B/E) are example of financial documents. These documents are normally provided by the bank, signed by the seller and drawn on the nominated bank or the issuing bank. B/E is a negotiable instrument and transferable in principle. The reason why this document is used in trade is simply because it provides a second legal protection to the acceptor or bona fide holders. In the event of default, the holder shall pursue legal action based on the B/E alone. This is also one of the reasons why freely negotiable LC is becoming so popular worldwide.
Commercial invoice on the other hand is not negotiable but only serves as an accounting document where details descriptions of the goods are indicated. This document normally is prepared by the seller. Packing list is another document prepared by the seller where it indicates how the goods are packed, weight of packaging, number of items per package and marks and numbers.
There are various types of transport documents which largely depend on the mode of transport engaged in moving the goods from the point of origin to the final destination. Multimodal transport is increasingly important in this modern world with the introduction of containerization. Goods can be picked up at the seller’s premise and move on using a combination of different mode of transports. In this case, multimodal transport document is required to be presented. Port to port shipment or inland waterways where goods are moved using vessel require Bill of Lading or Sea Waybill. If goods are transported by air, Air Waybill is required and so on. All these documents are issued by the transport operators.
It is also important to note that while in transit, the goods are exposed to risks, damage or loss. In this instance, insurance coverage against damage or loss to the goods should be procured and should be expressly indicated in the LC.
It is sometimes required by the law of the importing country to declare certain goods of their content, substance or origin to ensure compliance. Therefore, official documents such as analysis certificate, inspection certificate, quality certificate or certificate of origin may be required to be indicated in the LC.
It is worth to remember that only documents related to the trade of the goods should be requested because it will implicate the ability of the seller to prepare, obtain and to present all the documents to the bank to claim for payment.
State clearly what are documents required, how many copies, how many original and how many photocopies. If, documents such as analysis certificate, inspection certificate or quality certificate is required, state clearly who should issue and who should sign them.
This includes type of documents, number of copies as well as photocopy or original piece. As a general rule, at least one original of each document stipulated in the LC must be presented (Article 17(a), UCP 600). Documents are categorized as financial documents, commercial documents, transport documents, insurance documents and official documents.
Drafts or Bills of Exchange (B/E) are example of financial documents. These documents are normally provided by the bank, signed by the seller and drawn on the nominated bank or the issuing bank. B/E is a negotiable instrument and transferable in principle. The reason why this document is used in trade is simply because it provides a second legal protection to the acceptor or bona fide holders. In the event of default, the holder shall pursue legal action based on the B/E alone. This is also one of the reasons why freely negotiable LC is becoming so popular worldwide.
Commercial invoice on the other hand is not negotiable but only serves as an accounting document where details descriptions of the goods are indicated. This document normally is prepared by the seller. Packing list is another document prepared by the seller where it indicates how the goods are packed, weight of packaging, number of items per package and marks and numbers.
There are various types of transport documents which largely depend on the mode of transport engaged in moving the goods from the point of origin to the final destination. Multimodal transport is increasingly important in this modern world with the introduction of containerization. Goods can be picked up at the seller’s premise and move on using a combination of different mode of transports. In this case, multimodal transport document is required to be presented. Port to port shipment or inland waterways where goods are moved using vessel require Bill of Lading or Sea Waybill. If goods are transported by air, Air Waybill is required and so on. All these documents are issued by the transport operators.
It is also important to note that while in transit, the goods are exposed to risks, damage or loss. In this instance, insurance coverage against damage or loss to the goods should be procured and should be expressly indicated in the LC.
It is sometimes required by the law of the importing country to declare certain goods of their content, substance or origin to ensure compliance. Therefore, official documents such as analysis certificate, inspection certificate, quality certificate or certificate of origin may be required to be indicated in the LC.
It is worth to remember that only documents related to the trade of the goods should be requested because it will implicate the ability of the seller to prepare, obtain and to present all the documents to the bank to claim for payment.
State clearly what are documents required, how many copies, how many original and how many photocopies. If, documents such as analysis certificate, inspection certificate or quality certificate is required, state clearly who should issue and who should sign them.
No comments:
Post a Comment