Letter of Credit Forum

Hello Afrin

(I know you see them all as one, but you need to understand that the BENEFICIARY in the credit is NOT the same as the SHIPPER on the transport document, who in turn is different from the SELLER in the sales contract – and unrelated to the EXPORTER on the customs paperwork. Similarly, the APPLICANT, CONSIGNEE, BUYER and IMPORTER are all separate entities...bear that in mind as you read through the following.)

The first thing I would say to you is that the commercial invoice needed by the “importer” for inbound customs clearance need NOT be the same invoice called for by the issuing bank in terms of the credit i.e. the BENEFICIARY may tender one document via the credit (“ABC”) and the EXPORTER may send another outside the credit directly to the importer (“XYZ”).

So, if the presentation is compliant – do NOT fret about the amendment, let the beneficiary tender the documents they have and secure payment.

The storage charges will initially be held against the CONSIGNEE. So, if and when the IMPORTER clears customs, they will (now as the consignee) approach the carrier: the carrier will want the charges paid before release (or your agent, if not the carrier directly).

 If as BUYER they feel the SELLER should pay this, then that will be irrelevant to the carrier (who sees a ‘consignee’ not a buyer). However the buyer may be able to claim from the seller in terms of their sales agreement.

If, however, the BUYER abandons the cargo and never acts as consignee or importer, the SHIPPER will be asked by the carrier for disposal instructions (onward-ship, return or release to a new consignee) but now the carrier will hold the SHIPPER liable for all charges.

If the SELLER believes these charges are due from the BUYER, once again this will have no bearing on the carrier, (who sees a shipper not a seller) but the seller may have recourse to the buyer in terms of the sales contract.

If your agent incurs the charges and cannot recover them from the consignee - i.e. only if the goods are abandoned, (for, if NOT abandoned, they will recover from the consignee in exchnaeg for release) then they would be correct to hold you liable as their principal – you in turn would hold the shipper liable as your principal.

As for personal liability, I cannot comment: in the past, normal practice was that they would brand your forehead and take your first born male child, but I think things have softened since then...human rights and all that...

I wish you well with this

Cheers

phill

"In the kingdom of the blind, what you see is what you get"