General points
– Do not accept any documentary credits notified to
you directly from abroad without first checking their
authenticity.
– Is the documentary credit revocable or irrevocable,
unconfirmed or confirmed, as agreed?
– Does the documentary credit correspond with the
contract, especially in connection with the following
points?
• Amount/unit price
• Period of validity /shipping deadline
• Delivery terms
• Description and provenance of goods?
– Can it be transferred, if necessary?
– Where and how is the credit available?
– Does the documentary credit contain contradictory
stipulations?
– If the documentary credit is unconfirmed or confirmed
by a foreign bank, what is your assessment of:
a) the credit risk (creditworthiness of the bank),
b) the country risk (i.e. political and transfer risk, the
trading conditions in the buyer’s country),
c) the mailing risk (if the credit is available abroad)?
– Is the manufacturing risk covered?
– Are the names and addresses of the applicant and the
beneficiary correct?
– Is the documentary credit subject to the ICC’s currently
valid Uniform Customs and Practice for Documentary
Credits (UCP 500)?
– If documents are to be presented in electronic records:
is the documentary credit subject to the ICC’s currently
valid “Supplement to UCP 500 for Electronic Presentation”
(eUCP)?
– Is there sufficient time available to meet attestation and
authentication requirements?
– Are declarations requested in the documents which
cannot be made?
– Are documents stipulated which are contradictory to
the terms of delivery?
– Does the credit stipulate documents which need to be
drawn up or countersigned by the buyer or his bank
(= soft clause /stop clause)? (If so, fulfilment of the
credit terms depends largely on the buyer’s goodwill.)
– Can the required number of specified documents be
furnished?
– Are the terms of delivery correct?
– Are the commission arrangements in the documentary
credit as contractually agreed?
– Have all the affected departments in your company
(accounting, shipping, sales, etc.) been informed of the
documentary credit?
– Have all external partners (freight forwarders, insurers,
inspection agencies, etc.) been informed of the documentary
credit?
– Certificates must always be signed and dated.
– If original documents are required, we recommend you
always mark them as “originals.”
– Documents issued by the documentary credit beneficiary
should be drawn up in the same language as used
in the credit.
Deadlines and shipment of goods
– Can the shipment deadline be met?
– Are the terms regarding the place where the goods are
to be taken in charge and the points of departure and
arrival feasible?
– Are partial shipments and transhipments prohibited
contrary to the terms of contract?
– Can the prescribed marking and transport regulations
be complied with?
– Are you familiar with the expressions of time used in
the credit?
– Can the requested documents be presented in the
desired form before the credit validity expires?
– If the credit stipulates a transport document, the documents
have to be presented at the bank not later than
21 days after the date of shipment unless the credit
stipulates another time limit.
– Does the documentary credit contain other deadlines
(e. g. “copy of telex sent to applicant within x days after
shipment”)?
Drafts
– Are you absolutely certain how the draft has to be
issued?
Invoices
– Can the description of the goods in the invoice be
copied exactly from the documentary credit?
Transport documents, general points
– Are you aware that, unless a transport document is
required to be in this form, the banks cannot accept a
document that:
a) it is subject to a charter party (sea transport only),
b) states shipment on deck (sea transport only),
c) provides for transport by sailing ship,
d) is issued by a freight forwarder, unless it is signed by
the freight forwarder in the capacity of a carrier or
multimodal transport operator or by the freight forwarder
in the capacity of a named agent acting for
the named carrier or multimodal transport operator?
– Certain countries require the value of the merchandise
to be indicated on the transport documents for the
export. Does this value correspond to the amount and
the currency in your invoice?
– Rail freight: Can the duplicate of the railway bill be
obtained? (In the case of consolidated consignments,
the Swiss Federal Railways can only give you a book
extract.)
Marine/ocean bills of lading
– If a bill of lading is issued by a freight forwarder, the
freight forwarder must act as carrier or as agent of a
named carrier.
– Is the bill of lading to be issued to order of the buyer
or is it to be made out in his name? In both cases it will
be extremely difficult to arrange any return of the
goods. This point should be taken into full account.
– Does the prescribed freight notation conform to the
terms of delivery?
Charter party bills of lading
– Does the credit call for or allow such a document?
Multimodal transport documents
– If goods must be dispatched by more than one mode
of transport, does the credit provide for presentation of
a multimodal transport document?
Air transport documents
– Does the freight forwarder who will issue the air transport
document act as carrier or as agent for a named
carrier?
Insurance documents
– Can the terms of insurance be fulfilled?
– Are the risks to be covered accurately described in the
documentary credit? (Avoid imprecise formulations
such as “customary risks”, etc.)
– Does the insurance cover meet your requirements?
– Is a policy or a certificate required? (Broker’s
cover notes will not be accepted by the banks unless
expressly permitted in the credit.)
Certificates of origin
– Are the Chamber of Commerce and the consulate
willing to attest or authenticate the statements required
to appear on the certificate of origin?
– If authentication is required, does the relevant country,
if necessary, have a consulate?
– Can a certificate of origin issued in the country of
origin be furnished in time?
– Can the authentication be effected in time?
