All mistakes cause extra work and are sometimes accompanied by additional charges. They can also lead to delays in receiving payment, price reductions and even the avoidance of liability by the Importer altogether.
To help avoid discrepancies, we have highlighted the common mistakes for the documents below.
Bill of Exchange
Drawn incorrectly, or the amount differs from that of the invoice.
Capacity of the signatories is not stated if required.
Not endorsed or incorrectly endorsed.
Invoice
Description of the goods differs from that in the LC.
Amount differs from that of the LC.
Amount differs from that of the Bill of Exchange.
Prices of goods differ from those indicated in the LC.
Price basis and shipment terms omitted.
Extra charges included that are not specified in the LC.
Is not certified, notarised or signed as required by the credit.
Does not contain a declaration required under the LC.
Importer's name differs from that mentioned in the LC.
Is not issued by the Exporter.
Be consistent with each other.
Bill of Lading
Not presented in full set when requested.
Alterations not authenticated by an official of the shipping company or its agents.
Is not clean, ie. carries remarks that the condition and/or the packaging of the merchandise is defective.
Is not marked 'on board' when so required.
'On board' notation not dated.
Is not endorsed by the Exporter when drawn 'to order'.
Is not marked 'freight paid' as stipulated in the LC in respect of Cost & Freight and Cost Insurance & Freight contracts.
Is made out 'to order' when the LC stipulated 'direct to consignee' (Importer) and vice versa.
Is dated later than the latest shipping date specified in the LC.
Is not presented within 21 days after date of shipment or such time as specified in the LC.
Description of goods other than that specified in the LC.
Rate at which freight is calculated, and total amount, not shown when LC requires these details.
The following are only acceptable if expressly allowed in the Letter of Credit:
Shipment 'on deck', ie. the goods are not stored in the hold.
Shipment from a port or to a destination other than that stipulated.
Presentation of types of Bills of Lading not specifically authorised in the LC, eg. a Charter party Bill of Lading, or a Forwarding agent's Bill of Lading.
Insurance
Amount of cover is sufficient.
Does not include risks mentioned in the LC.
Is not endorsed by the insured and/or signed by the insurers.
Certificate or policy bears a date later than the date of shipment/despatch, except where warehouse-to-warehouse is indicated.
Incorrect description of goods.
Alterations are not authenticated.
Is not in transferable form when required.
Carrying vessel's name not recorded.
Does not cover transhipment when Bills of Lading indicate it will take place.
