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description of goods as per invoice

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Thu, 03/25/2010 - 23:31
mmm999
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Joined: 03/16/2010
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Dear experts,

I would like to know your opninon concerning this case

 We issue an unconfirmed LC to an Italian bank. The applicant has presented me the proforma invoices of the transaction where all goods are described in details. Also note that according to LC terms  10 percent variance in amount and quantity is allowed.

 The applicant and beneficiary have an arrangement to check the draft of LC before issuing. I sent the draft with all goods described in details. But bnf wants the description of goods to be stated as follows(without any information about goods):

 +As per proforma invoice N.----- DD   dd.mm.yy

The applicant accepts this claim. I would like to know if the banks are allowed to issue LCs with such terms and if so what are the bank's risks.

Thank you in advance

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Fri, 03/26/2010 - 07:48
#1
palakol
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Joined: 05/06/2008
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Description of Goods-HS Codes

I remember working in a bank where before the Description of Goods in every LC that we issue, we have to put HS Codes or our Own Country Commodity Codes.

Before we issue an LC we have to check in our List and make sure that it will not fall to those goods which are "Regulated And Prohibited Goods". In case the Goods fall under the regulated one's we require the applicant to furnish us with the necessary clearance from the concerned government agencies before we allow the issuance of the LC. It is funny as those fall under prohibited goods to be imported are" Toy Guns and Used Clothings".

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Fri, 03/26/2010 - 06:56
#2
Abrar
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Joined: 03/12/2009
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Goods description

I think you will find that with stricter controls (import regulations, money-laundering, terrorist financing, etc), banks take a much stricter approach with respects to due diligence. If an advising bank were to receive an LC which does not mention the nature of the goods, it is likely to require it from the issuing bank, to ensure that it does not fall foul of its national and international (FATF) compliance regulations. There are serious implications for a bank which does not perform these checks and thereby unwittingly becomes a party to a farudulent or illegal transaction

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Sat, 03/27/2010 - 12:22
#3
KKehrer
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Joined: 10/15/2009
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Goods description

Dear Abrar ! I agree with Your opinion and want to point out, that in 45A the DESCRIPTION OF GOODS needs for me clear details DESCRIBING the goods. A simple reference as mentioned is IMHO to short, an advising bank should be careful with such details provided. Also the carrier and an insurance company - what do the transport or insure then ? Although docs maybe furnished as per 45A the concernd parties should be aware, that problems could arise with export and import customs authorities. Have You ever seen a Cert/Origin from a Chamber of Commerce showing only this phrase without showing further details ? if so, I treat this very strange for such institution. Other comments highly appreciated. Have nice further time. Rgds Kurt.

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Fri, 03/26/2010 - 06:22
#4
bernayas
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Joined: 03/26/2010
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hello,  for

hello,

 for banks,examination of docs becomes  more difficult with the detailed goods description.as per ucp 600 ,l/c should not show lots of details in goods description field, instead of this , it is required by banks and ucp600 showing a general good description and proforma or sales contract no and date (like  +As per proforma invoice N.----- DD   dd.mm.yy ) in field 45a as goods description .  these are enough and more useful information to open an l/c.

regards.

 

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