Export LCs

Professional Documents preparation

,Examination and Presentation
Receipt of the LC precautious

 Upon receipt of a letter of credit the beneficiary must receive a copy of it

in haste from his correspondent and make sure of the following :-


 The type of credit and all terms and conditions correspond to the
sales contract
 There are any unacceptable conditions
 The documents can be prepared in the form required
 The merchandise description and unit price conform to the sales
contract
 The amount of the credit is sufficient to cover all costs to be
borne by the shipper under the terms of the contract  
 The latest permissible shipping and expiration dates allow
sufficient time for shipment and presentation of documents to
the bank.
 The points of shipment and destination conform to the sales
contract
 The insurance coverage corresponds to the terms of the sale
More strict precautious measures
in revising the LC
A credit should not call for documents that
are to be issued and/or counter-signed by
the applicant
It is very common for the buyer and seller to
pay their own banks fees unless its clearly
stated other wise in the contract or
preagreements
A credit should be issued with out any delay
fine on the beneficiary since most of LC
get extended due to external shipping and
delays due to internal and external
regulations

Contacting the applicant for
amendments
 Amendments needed should be discussed as
soon as possible with the applicant in case
there are any corrections needed in the LC
conditions and documents required
 An authenticated swift including the
amendments required must be received by
the beneficiary's bank and revised
accurately before deciding that the LC is
now acceptable and the documents
preparation phase should begin



Shipping documents
preparation
“shipping documents” refers not only to
transport documents but to all documents
required by the credit, except drafts.
In the case of a multiple-page document, the
signature, if required, can be anywhere on
the document unless the LC or the document
itself indicates where a signature or
endorsement is to appear.
Even if not stated in the LC, drafts, certificates
and declarations must be signed.

The Covering Letter

 The covering letter that is addressed to

the Beneficiary’s bank attached with
the Full shipping documents as per LC
conditions and requirements along
with a list of the presented shipping
documents

The Perfect Covering Letter
Essential
 Additional


 Addressed to the  Indicating Whether

Beneficiary's Bank any discrepancies
 Current Date and are presented
Officially signed
 Attached Table of
 Contain the Letter of
Credit Number contents including
/Reference all presented
 Indicate the Documents
Value/Amount of the 
Letter of credit
adding to Amount
required as per
documents
presented
1-Commercial Invoice
Definition :-

Non-negotiable commercial instrument issued by

a seller to a buyer. Also called a bill of sale or
contract of sale, it identifies the both trading
parties and lists, describes, and quantifies the
items sold, shows the date of shipment and
mode of transport, prices and discounts (if any),
and delivery and payment terms. In certain
cases (especially when it is signed by the seller
or seller's agent), it serves as a demand for
payment and becomes a document of title when
paid in full.
Things to take inconsideration
when issuing and revising a
commercial invoiceThe currency of the Invoice
 Issued Solely by the
beneficiary of the DC
 The Applicant full details
as per LC is indicated
as the invoiced party
 Description of Goods
Identical to the
merchandize
description in the LC
 (Field:-45A mt.700)
 Any other Information
Supplied by the Invoice
(Marks, Numbers etc, )
Consistent with that of
other shipping
documents


should be the same as the
Currency of the LC
 Fully signed and approved
internally also legalized and
countersigned if indicated in
the LC terms
 Correct number of Original
and copies is presented as
per LC conditions
 Specify the country of origin if
indicated in the LC
 The invoice can show a
deduction covering
advance payment,
discount, etc., even if it is
not stated in the credit.
What's Not to be in a
commercial Invoice
 Not to be Titled “Pro-
forma ,Provisional “
To be titles exactly as
stated in the LC
“Commercial Invoice”
 Additional Description
of goods that may 
raise questions and
new conditions
 the Invoice should
 Value beyond or
exceeding the
available LC balance

 Commercial Invoice
should be a unique
Document and not to
be combined with or
in another document

 If there is no Partial
Shipment in the LC
cover the whole LC
amount

Packing List


 Itemized list of articles usually
included in each shipping package,
giving the quantity, description,
and weight of the contents.
Prepared by the shipper and sent
to the consignee for accurate
tallying of the delivered goods.
Also called bill of parcels,
packing slip, or unpacking note.
Weight List

 Itemized list of Items giving the

exact net /Gross weight of the
contents.
 Prepared by the producer and sent
to the seller/Shipper then
subsequently to the consignee.
 Also called Certificate of weight
We must make sure that
each of the Packing &
Weight List
 is a unique document and not combined with
any other document
 is signed if a certificate is called for, or as
otherwise stated in the letter of credit
 the data on them is consistent with that of the
other documents .



Some of the most common
documentary discrepancies to
avoid
Expired-documents presented after
expiration date of the letter of credit
 Late shipment--shipment made after latest
allowable shipping date
 Late presentation--documents presented
more than 21 days after shipment
 overdrawn--amount of drawing exceeds
amount available under the letter of credit
 Merchandise description in invoice differs
from that in the credit


 On board” notation on bill of lading not
dated
 Bill of lading showing incorrect consignee
 Bill of lading shows port of loading and/or
discharge other than ports specified in LC
 Documents inconsistent with each other
 Bill of lading, insurance certificate/policy
and/or bill of exchange (draft) are not
properly endorsed
 Shipping terms (Ex-Factory, FAS, FOB, C&I,
C&F, CIF) on invoices differ from those
specified in the letter of credit
 Set of documents presented under LETTER
OF CREDIT incomplete

Thanks & Best
Regards
Collected , Assembled and presented
by
Ahmed Shawky

Trade finance section head

ARESCO