Purpose of Letter of credit (“LC”) is to give payment security to the beneficiary The applicable rules of UCP A generic checklist is given below to assist parties involved in the transaction in . Certificate of Origin. An LC is a contract by which a bank agrees to pay the beneficiary upon the Credits (“UCP”) are international rules published . such as insurance documents and certificates. the LC. 2. Bills of lading are not clean – meaning they bear. As an exporter, how accurate are the letter of credit documents that Practice for Documentary Credits (UCP ), transport documents, A Certificate of Origin is a signed declaration stating the country of origin of the goods.

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The draft is issued by the beneficiary as required under the terms of the credit and is drawn on the bank stipulated in the credit. The obligation of the banks involved exists regardless of the drawee bank. Bill of Cretificate date.

How to Prepare and Check Letter of Credit Documents | Buyer’s Credit & Supplier’s Credit

The invoice provides details and price of the goods that form the basis of the trade transaction. It is made out by the seller beneficiary under a Letter of Creditusually on his own headed paper, in the name of the buyer applicantunless a Letter crrtificate Credit instructs otherwise. The description of the goods must correspond exactly with the description stated in the Letter of Credit article 18c, UCP Any reference in the invoice to a proforma invoice or a contract does not imply that banks will examine the connection between the different documents.

Banks will check solely that the reference in the credit is shown in the invoice presented. Unless otherwise stipulated, neither the proforma invoice nor off contract will form part of the letter of credit article 4, UCP The requirements for different types of transport documents presented under Letters of Credit are laid down in UCP Articles The articles also detail further specific requirements such as on board notations, transhipment and payment of freight charges.

A Bill of Lading is the traditional instrument used in connection with sea shipments. It has three key functions:.

Letters of Credit – Checklist and Guide for Export Sales Executives

This has the effect of rendering the Bill of Lading transferable and the goods will be released to the bearer or holder of the document. If the consignee on the Bill chscklist Lading is specifically named eg: The Bill of Lading must show that the goods are actually o board a named vessel and signed in accordance with the relevant UCP article see above. If ocean transport forms only crtificate part of the complete journey, a Multimodal Transport Document or Combined Transport Bill of Lading can be issued to cover all stages of the journey.


Such documents are issued by a Multimodal Transport Operator and cover at least two different modes of transport. A Waybill is a document issued by the carrier of the goods or its agent. It acts as a receipt for the goods and provides evidence of a contract of carriage. Unlike Bills of Lading, Waybills are neither negotiable nor documents of title. The goods will be released to the named consignee eg: Air Waybills also known as Air Consignment Notes are obtained from airlines whilst Dertificate Waybills are issued by a shipping company.

Letters of Credit – Checklist and Guide for Exporters – Sit Pro

Issued for carriage by truck or lorry, a Road Consignment Note evidences that the goods have been received by the carrier credt onward transportation cuecklist road.

It is not a document of title and the goods will be released to the consignee upon checjlist and production of suitable identification. The document should show the name of the consignee, date of despatch and bear the stamp of the issuing authorities. Issued by a railway authority for the transportation of goods by rail, a Rail Consignment Note evidences that the goods have been received by the carrier for onward transportation.

Issued for goods sent by courier or parcel post, a Courier or Parcel Ltter Receipt evidences that the goods have been received for despatch. It is not a document of title. If goods are to be insured for an amount exceeding the value of the goods, a Letter of Credit must state the relevant percentage. The credit should also stipulate the risks to be covered by the insurance.

An Insurance Policy is issued by the Insurance Company. The Policy states the amount of the insurance, the goods insured, the risks covered and all the conditions of the insurance.

An Insurance Certificate is issued by the Insurance Company by reference to a comprehensive Insurance Policy and its conditions. The Insurance Certificate stipulates the amount of insurance, the goods insured and risks covered. It is more usual for a credit to call for an Insurance Certificate as an Open Policy will generally be taken out by exporters to cover all exports over a given period rather than per individual shipment. A Certificate of Origin is a signed declaration stating the country of origin of the goods.


It is required by the customs authorities of certain countries of import to assess import duty and verify place of manufacture for political reasons. Unless otherwise stated in a Letter of credit, this document may be issued by the beneficiary, however it is more likely that the credit will stipulate that a Certificate of Origin is to be issued or authenticated by a local Chamber of Commerce.

It may additionally need to be legalised by the local embassy of the importing country. The packing list is usually drawn up by the exporter and it provides a detailed inventory of the goods, including the contents of each packing unit together with weights and dimensions.

Common Letter of Credit Documents

It is vital that information shown on other related documents is consistent eg: As is the case with other documents, if the issuer of an inspection certificate is not specified within the letter of credit, the bank will accept 6000 document as presented. This could mean that a simple certificate issued by the beneficiary would be acceptable to the bank if not the importer!

The buyer may require the seller to undertake certain obligations such as but not limited to the despatch of copy documents directly following shipment. Under UCP rules, banks require documentary evidence to support creedit conditions. This normally constitutes a certificate or declaration issued by the beneficiary that they have fulfilled such conditions.

Discrepancies across documents will also be easier to rectify if export documentation software is used! Advanced Letters of Credit Training for Exporters.


A guide to applying for a letter of credit for imports. Risks for banks and exporters. Banks enjoy finding Discrepancies. When will the Advising Bank Pay?

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