Finance of International Trade

Finance of International Trade

 that cover is for the CIF value of the consignment plus 10%

 that it is issued in the same currency as the credit

 the name of the agent responsible for handing any claims.

Finally, it must be in a form which enables it to be transferred by

endorsement.

Transport documents

To transport goods around the world by sea, air, road, rail and inland

waterways involves numerous types of carriers who issue a variety of

documents evidencing receipt and detailing points of despatch, destination

and mode of transport. The main documents which are regularly presented

under documentary credits are:

 bills of lading

 marine or ocean

 multimodal

 container

 charter party

 short form (blank back)

 received for shipment

 non-negotiable sea waybills

 mate’s receipt

 air waybills

 rail, road and inland waterway consignment notes

 parcel post receipts.

Of greatest importance to banks financing the movement of goods is their

ability to obtain a title to them during transport and to transfer that title to

a buyer upon liquidation of the finance. Only one transport document

provides that security and that is the bill of lading.

The marine or ocean bill of lading performs a number of functions. It is

a receipt for the goods detailed on its face, a contract of carriage, a

negotiable document and evidence of the shipment of certain goods from

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The irrevocable documentary credit

a named port to a named port of destination. It should incorporate the

following additional details:

 shipping company’s name

 carrying vessel’s name

 shipper’s name

 marks and numbers of packages

 general description of goods

 name of consignee

 date of loading on board

 name of notify party

 number of original bills in the set

 signature of ship’s master or shipping company’s agent

 an indication of whether freight has been paid or is to be paid at

destination

 contractual conditions of carriage (on reverse).

The bill of lading, because of its protective properties, is the most likely

document to be rejected by banks due to faults in its issue, detrimental

clauses which carriers add when packages appear damaged and presenta-

tion of incomplete sets (2 out of 3 originals). It is only a clean bill of lading

if no detrimental clause appears on its face.

Multimodal bills of lading are issued to cover the transport of goods by at

least two different modes from a point of departure by road, rail, barge or

sea-going vessel for carriage to their destination. The essential feature of

this document, required to make it acceptable within the terms of UCP500,

is that at least one stage of the journey must be by sea.

Container bills of lading: nowadays many consignments by sea are made

in containers. The container is packed at a port or an inland place of

reception and may include goods from more than one exporter consigned

to several buyers at destination. This is a very secure method as containers

are specially sealed and coded to prevent theft and pilferage. The bill of

lading is a receipt for the container at place of receipt and operates on a

port-to-port basis, except that it can cover the goods from port of

destination to an inland container depot; it is a full document of title.

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