Letter of credit, in a broad perspective, is one of the payment methods in international trade.
Bill of lading is a transport document covering the carriage of goods by sea.
Notify party means a person that should be notified by the carrier along with the consignee when the shipment arrives at port of discharge.
Letter of credit is a conditional payment method.
The beneficiary of a letter of credit will receive the payment as long as he presents documents in comply with the terms and conditions of the letter of credit.
Some letters of credit especially the ones issued in Bangladesh request bills of lading that contain not one but multiple notify parties.
On my previous post I have explained that multiple notify parties on a single bill of lading is possible.
Let me explain the situation with an example.
Multiple Notify Party Example:
A textile fabric paint exporter in Italy signs a trade deal with an importer in Bangladesh.
According to the national law of Bangladesh all imports must be paid by letters of credit. As a result an issuing bank in Bangladesh issues a letter of credit against the proforma invoice of the Italian exporter.
The letter of credit contains a condition as below:
Full set original clean on board ocean bills of lading, plus three non-negotiable copies issued by the carrier or its agent drawn or endorsed to the order of Bangladesh Islamic Bank showing ”Freight Prepaid” marked notify applicant and the issuing bank.
The bill of lading must show two notify parties:
- Notify 1: Applicant (importer company)
- Notify 2: Issuing bank
- Notify Party of a Bill of Lading
- Consignee of a Bill of Lading
- How to Complete a Bill of Lading under a Letter of Credit Payment?
- Parties on a Bill of Lading: Shipper, Consignee, Notify Party and Carrier
- To Order and Blank Endorsed Bill of Lading
- What are the Differences Between a Bill of Lading and a Charter Party Bill of Lading?
- Freight Forwarder’s Bill of Lading Not Acceptable