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Costs additional to freight discrepancy example :











On my previous article I have explained costs additional to freight in a letter of credit transaction according to the letter of credit rules, UCP DC, and International Standard Banking Practices, ISBP. I have also mentioned how costs additional to freight are shown on the transport documents and the possible consequences of prohibiting them in letters of credit. If you would like to learn more about these subjects please feel free to visit my related article titled with “Costs additional to freight”. 

Today I would like to give you a real life example of costs additional to freight discrepancy on this article as follows:
Sample Letter of Credit:

46A:Documents Required
+FULL SET OF AT LEAST 3/3 LONG FORM ORIGINAL (CLEAN ON BOARD) BILL(S) OF LADING ON THE PRINTED FORMS OF CARRIER PLUS ONE NON-NEGOTIABLE COPY ISSUED OR ENDORSED TO THE ORDER OF EXPO ARAB BANK PLC, NOTIFY APPLICANT SHOWING FREIGHT PREPAID AND SHOWING FULL NAME AND ADDRESS OF THE SHIPPING COMPANY AGENT OR HIS REPRESENTATIVE IN BAHRAIN.
+BILL(S) OF LADING SHOWING CHARGES ADDITIONAL TO THE (FREIGHT) MENTIONED IN ARTICLE 26 (C) OF THE UCP, 2007 REVISION, PUBLICATION NO. 600 ARE NOT ACCEPTABLE EXCEPT WHERE SUCH ADDITIONAL CHARGES ARE DEMURRAGE FEES FOR CONTAINERS
+SHORT FORM OR BLANK BACK BILL(S) OF LADING ARE NOT ACCEPTABLE.

Bill of Lading: Beneficiary of the letter of credit presented a bill of lading that contains a clause stating that "CARRIAGE TERM:FREE IN & LINER OUT"



 























Discrepancy: Documents refused by the issuing by due to the discrepancy indicated on the advice of refusal.
--------------------------------------------------------------Message Header-------------------------------------------------
Swift OUTPUT FIN 734 Advice of Refusal
Sender: EXPOBHBMMAN
EXPO ARAB BANK PLC
MANAMA BH

Receiver: IHRKTRISXXX
TURKIYE IHRACAT BANKASI T.A.S
ISTANBUL TR
--------------------------------------------------------------Message Text------------------------------------------------------
20: Sender’s TRN
2002rML2AI2A3369

21: Presenting Bank's Reference
18208L23r109

32A: Date and Amount of Utilisation
Date: 28 December 2012
Currency: USD (US DOLLAR)
Amount: #285.600,00#

33A: Total Amount Claimed
Date: 07 January 2013
Currency: USD (US DOLLAR)
Amount: #285. 600,00#

72 :Sender to Receiver Information

DOCUMENTS REFUSED BY US DUE TO DISCREPANCIES STATED BELOW. WE NOTIFTED THE APPLICANT, WE SHALL REVERT UPON HEARING FROM THEM.

77J: Discrepancies

1. B/L SHOWS ADDITIONAL CHARGES TO THE FREIGHT NOT AUTHORIZED UNDER L/C.

77B: Disposal of Documents
/ HOLD /
-----------------------------------------------------------Message Trailer------------------------------------------------------

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Costs additional to freight discrepancy example 
Today I would like to give you a real life example of costs additional to freight discrepancy on this article as follows:
  • Letter of credit that requires a bill of lading not showing any charges additional to freight.
  • Bill of Lading that states a carriage term FILO.
  • Discrepancy due to B/L shows charges additional to freight contrary to lc terms.



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Costs additional to freight bill of lading