3 Haziran 2007 Pazar
23 Nisan 2007 Pazartesi
Teminat Mektupları nedir, mahiyeti ve tarafları nelerdir?
1. Teminat Mektuplarının Tanımı, Mahiyeti ve Tarafları
Teminat mektubu, borçlunun muhataba karşı yüklendiği bir edimin yerine getirilmesini garanti için banka tarafından lehtara verilen mektuptur.
Kural olarak teminat mektubu, muhatabın uğrayacağı bir zararın tazmini (giderimi) için verilir. Banka, teminat mektubu vermek suretiyle taahhütte bulunduğu muhatabın varsa zararını ödemeyi üstlenir. Kendisine garanti verilen kişiye “Muhatap”, lehine teminat mektubu verilen kredili müşteriye ise “Lehtar”, denir.
Teminat mektubu kredili müşteriyle mevcut kredi ilişkisi dolayısıyla alınan bir ücret (komisyon) karşılığında muhataba hitaben düzenlenir. Böylece kredili müşteri, bankanın isim ve prestijinden faydalanarak nakit teminat vermekten kurtulmaktadır. Banka ise, vermiş olduğu teminat mektubu karşılığında, kredili müşteriden bir komisyon almaya hak kazanmakta, buna karşılık bir tazmin halinde teminat mektubu meblağını ödeme riskini üstlenmektedir.
2. Teminat Mektuplarının Türleri
Teminat Mektuplarını Konularına göre, Geçerli olduğu sürelere göre, Bankanın ödemekle yükümlü olduğu meblağa göre olmak üzere üç kümede toplamak mümkündür.
a) Konularına Göre Teminat Mektupları
(1) Geçici Teminat Mektupları
Geçici teminat mektupları, bir ihaleye katılmak için ihaleyi yapan makama hitaben verilir. Geçici teminat mektubu ile genellikle mektup lehtarının ihalenin üzerinde kalması durumunda ilgili sözleşmeyi imzalayacağı ve kesin teminat mektubu vereceği garanti edilir.
(2) Kesin Teminat Mektupları
Bu tür teminat mektuplarının konusu, lehtarın mektupta belirlenen yükümlülüğünü yerine getireceğini garanti etmek oluşturmaktadır. Yükümlülüğün kısmen ya da tamamen yerine getirilmemesi halinde bankanın tazmin borcu doğmaktadır.
(3) Avans Teminat Mektupları
Müteahhidin kazandığı ihalede işe başlaması için aldığı avans borcunun bir banka tarafından garanti edilmesidir. Avans, müteahhit sözleşme hükümlerine uygun olarak taahhütlerini yerine getirdikçe, hak edişlerinden mahsup edilmek (düşülmek) suretiyle geri alınır.
(4) Mahkeme ve İcra Dairelerine Hitaben Verilen Teminat Mektupları
Bu tür mektupların konusu çok çeşitli olabilir: İhtiyati haciz, ihtiyati tedbir, yürütmenin durdurulması (tehiri icra), icralardaki ihaleye katılmak, yurt dışındaki bir kişinin Türkiye’de dava açması, ... gibi.
(5) Vergi Dairelerine Hitaben Verilen Teminat Mektupları
Tarhedilen (salınan) vergi ve cezalarına itiraz edilmesi veya verginin takside bağlanmasını sağlamak amacı ile verilir.
(6) Gümrüklere Hitaben Verilen Teminat Mektupları
Bunlar vergi ve resimlerin ve bunların cezalarının banka tarafından garanti edilmesi şeklindedir.
(7) Serbest Konulu Teminat Mektupları
Teminat mektupları, yukarıda anlatılanlardan başka her konuda resmi dairelere, özel kişilere hitaben de verilebilir. Kiralanan bir taşınmazın depozitosu, acentelik, bayilik, borcun teminatı gibi çok çeşitli konular için teminat mektubu düzenlenebilir.
b) Geçerli Olduğu Sürelere Göre Teminat Mektupları
(1) Vadeli Teminat Mektupları
Bu tip mektuplar bir süre ile sınırlıdır. Bu süre zarfında eğer mektubun tazmini yazılı olarak bankadan istenilirse mektupta yazılı olan meblağ muhataba ödenir.
(2) Süresiz Teminat Mektupları
Üzerinde belirli bir geçerlilik süresi olmayan ve süresiz olarak yürürlükte kalan mektuplardır.
c) Bankanın Ödemekle Yükümlü Olduğu Meblağa Göre Teminat Mektupları
(1) Limitli Teminat Mektupları
Bu tip mektuplarda bankanın hangi riski üstlendiği kesin olarak bellidir. Başka bir ifadeyle, teminat mektubunun tazmin olması halinde bankanın en çok ne kadar para ödeyeceği mektup metninde kesin bir şekilde yer alır.
(2) Limitsiz (Üstü Açık) Teminat Mektupları
Bu tip mektuplarda bankanın ödemeyi garanti ettiği bir meblağ yer almakla birlikte “mektubun verildiği tarihten itibaren hesaplanacak kanuni faiz ve gecikme zammı ile birlikte ödeneceği” şeklinde bir ibare de bulunmaktadır.
Genellikle Gümrüklere hiteben verilen teminat mektupları bu tip mektuplardır. Burada bir meblağ yer almakla beraber, bu meblağa ek olarak faizlerin ve gecikme zamlarının da ödeneceği garanti edildiğinden bazen yazılı meblağın bir kaç katı tazmin riskiyle karşılaşmak mümkündür. Bu itibarla, böyle mektupların verilmesi söz konusu olduğu zaman risk-kredi teminatı dengesinin iyi ayarlanmış olmasına dikkat edilmelidir.
3. Teminat Mektuplarının Haczi
Teminat mektubunun verildiği muhatabın borcundan dolayı teminat mektubunun kendisinin haczi mümkün değildir. Çünkü, teminat mektubu, hisse senedi, tahvil ya da kambiyo senetleri gibi kıymetli evrak niteliğini haiz değildir.
4. Teminat Mektuplarının Temliki
Bu konuyu iki başlık altında özetlemek gerekir;
a) Muhatabın Teminat Mektubundan Doğan veya Doğacak Alacağının Temliki
Teminat mektubunun nakde dönüştürülmesi ancak muhatabın yazılı olarak tazmin talebinde bulunması ile mümkündür. Bu durumda, muhatabın teminat mektubundan doğan alacağının veya doğacak alacak hakkının temlikinde, muhatap yazılı olarak tazmin talebinde bulunmadıkça bankanın ödeme yükümlülüğü ortaya çıkmayacaktır. Ancak, muhatabın tazmin talebi geldiğinde temlik gereğince temellük edene bankaca ödeme yapılabilir. Bu nedenle, teminat mektuplarının temliki uygulamada tercih edilen bir teminat şekli değildir.
b) Teminat Mektubundan Muhatabın Değişmesi
Özellikle yabancı ülkelerden talep edilen teminat mektuplarında, bu mektupların devredilebilir (transferable) olması talep edilmektedir.
Muhatap tek başına bankanın muvafakatı olmaksızın böyle bir devir yetkisine sahip değildir. Bu ancak, başlangıçta teminat mektubu metninde devredilebilir kaydının bulunmasına ya da tarafların daha sonra bu yönde muvafakat vermesine bağlıdır.
5. Teminat Mektuplarına İhtiyati Tedbir Konulması
Bankaların ilk yazılı talepte muhatabın beyanını yeterli görerek ödeme taahhüdünde bulunmaları, bazen teminat mektuplarının haksız surette tazmin edilmelerine neden olmaktadır.
Bankanın teminat mektubu bedelini muhataba ödemesini durduracak tek yasal yol, mahkeme kararıyla mektup üzerine ihtiyati tedbir koydurulmasıdır. Tedbir kararının bankaya tebliği üzerine, teminat mektubunun tazmin talebi yerine getirilmez. Öyle ki, teminat mektubunun metninde “İhtiyati Tedbir Kararına Rağmen Ödeme Taahhüdü” bulunsa dahi, bu şart yazılmamış sayılır. Teminat mektubunun yurt dışındaki bir muhataba verilmiş olması halinde dahi aynı durum geçerlidir.
İhtiyati tedbir kararının varlığına rağmen ödeme yapılırsa, bu durum yetkililer hakkında bir aydan altı aya kadar hapis cezasını gerektiren suç oluşturur.
6. Kredi Sözleşmelerindeki Teminat Mektuplarıyla İlgili Hükümler
Banka müşterilerine imzalattığı genel kredi sözleşmelerindeki hükümler, herhangi tazmin talebi gelme riski anında, mahkemeye müracaat ederek teminat mektubu bedellerinin depo ettirilmesi imkanını vermektedir.
7. Bankalar Kanunundaki Teminat Mektuplarıyla İlgili Hükümler
Bankalar Kanununda gayrı nakdi kredi olarak tanımlanan teminat mektuplarına özellikle kredi limitleri açısından değinilmiştir. Bir bankanın düzenleyebileceği teminat mektupları sonsuz meblağda olamaz. Bununla ilgili limitler Bankalar Kanunu 38.maddesinde düzenlenmiş bulunmaktadır. Uygulamada zaman zaman karşılaşılan bir sorun da, bir kişinin gayrı nakdi kredisinden bir başka kişinin faydalandırılmak istenilmesidir. Bankanın kredili müşterisi yazılı talimat vererek; örneğin şirket ortakları ya da şirket çalışanları lehine teminat mektubu verilmesini istemektedir. Kendisine teminat mektubu kredisi açılmış ve genel kredi sözleşmesini imzalamış olandan başkası lehine teminat mektubu verilmesi Bankalar Kanununa göre yasaklanmıştır. Örneğin şirketin Yönetim Kurulu Başkanı, ya da imza yetkilileri dahi kendi lehlerine teminat mektubu düzenlenmesini isteme hakkına sahip değildirler. Yine aynı şekilde, genel kredi sözleşmesinde kefil olarak yer alanlar da kredili müşterinin kredisinden faydalanmak suretiyle kendi lehlerine teminat mektubu düzenlenmesini isteyemezler. Bunların aksine davranış, Bankalar Kanununa göre suç olup, cezayı gerektirmektedir.
Teminat mektubu, borçlunun muhataba karşı yüklendiği bir edimin yerine getirilmesini garanti için banka tarafından lehtara verilen mektuptur.
Kural olarak teminat mektubu, muhatabın uğrayacağı bir zararın tazmini (giderimi) için verilir. Banka, teminat mektubu vermek suretiyle taahhütte bulunduğu muhatabın varsa zararını ödemeyi üstlenir. Kendisine garanti verilen kişiye “Muhatap”, lehine teminat mektubu verilen kredili müşteriye ise “Lehtar”, denir.
Teminat mektubu kredili müşteriyle mevcut kredi ilişkisi dolayısıyla alınan bir ücret (komisyon) karşılığında muhataba hitaben düzenlenir. Böylece kredili müşteri, bankanın isim ve prestijinden faydalanarak nakit teminat vermekten kurtulmaktadır. Banka ise, vermiş olduğu teminat mektubu karşılığında, kredili müşteriden bir komisyon almaya hak kazanmakta, buna karşılık bir tazmin halinde teminat mektubu meblağını ödeme riskini üstlenmektedir.
2. Teminat Mektuplarının Türleri
Teminat Mektuplarını Konularına göre, Geçerli olduğu sürelere göre, Bankanın ödemekle yükümlü olduğu meblağa göre olmak üzere üç kümede toplamak mümkündür.
a) Konularına Göre Teminat Mektupları
(1) Geçici Teminat Mektupları
Geçici teminat mektupları, bir ihaleye katılmak için ihaleyi yapan makama hitaben verilir. Geçici teminat mektubu ile genellikle mektup lehtarının ihalenin üzerinde kalması durumunda ilgili sözleşmeyi imzalayacağı ve kesin teminat mektubu vereceği garanti edilir.
(2) Kesin Teminat Mektupları
Bu tür teminat mektuplarının konusu, lehtarın mektupta belirlenen yükümlülüğünü yerine getireceğini garanti etmek oluşturmaktadır. Yükümlülüğün kısmen ya da tamamen yerine getirilmemesi halinde bankanın tazmin borcu doğmaktadır.
(3) Avans Teminat Mektupları
Müteahhidin kazandığı ihalede işe başlaması için aldığı avans borcunun bir banka tarafından garanti edilmesidir. Avans, müteahhit sözleşme hükümlerine uygun olarak taahhütlerini yerine getirdikçe, hak edişlerinden mahsup edilmek (düşülmek) suretiyle geri alınır.
(4) Mahkeme ve İcra Dairelerine Hitaben Verilen Teminat Mektupları
Bu tür mektupların konusu çok çeşitli olabilir: İhtiyati haciz, ihtiyati tedbir, yürütmenin durdurulması (tehiri icra), icralardaki ihaleye katılmak, yurt dışındaki bir kişinin Türkiye’de dava açması, ... gibi.
(5) Vergi Dairelerine Hitaben Verilen Teminat Mektupları
Tarhedilen (salınan) vergi ve cezalarına itiraz edilmesi veya verginin takside bağlanmasını sağlamak amacı ile verilir.
(6) Gümrüklere Hitaben Verilen Teminat Mektupları
Bunlar vergi ve resimlerin ve bunların cezalarının banka tarafından garanti edilmesi şeklindedir.
(7) Serbest Konulu Teminat Mektupları
Teminat mektupları, yukarıda anlatılanlardan başka her konuda resmi dairelere, özel kişilere hitaben de verilebilir. Kiralanan bir taşınmazın depozitosu, acentelik, bayilik, borcun teminatı gibi çok çeşitli konular için teminat mektubu düzenlenebilir.
b) Geçerli Olduğu Sürelere Göre Teminat Mektupları
(1) Vadeli Teminat Mektupları
Bu tip mektuplar bir süre ile sınırlıdır. Bu süre zarfında eğer mektubun tazmini yazılı olarak bankadan istenilirse mektupta yazılı olan meblağ muhataba ödenir.
(2) Süresiz Teminat Mektupları
Üzerinde belirli bir geçerlilik süresi olmayan ve süresiz olarak yürürlükte kalan mektuplardır.
c) Bankanın Ödemekle Yükümlü Olduğu Meblağa Göre Teminat Mektupları
(1) Limitli Teminat Mektupları
Bu tip mektuplarda bankanın hangi riski üstlendiği kesin olarak bellidir. Başka bir ifadeyle, teminat mektubunun tazmin olması halinde bankanın en çok ne kadar para ödeyeceği mektup metninde kesin bir şekilde yer alır.
(2) Limitsiz (Üstü Açık) Teminat Mektupları
Bu tip mektuplarda bankanın ödemeyi garanti ettiği bir meblağ yer almakla birlikte “mektubun verildiği tarihten itibaren hesaplanacak kanuni faiz ve gecikme zammı ile birlikte ödeneceği” şeklinde bir ibare de bulunmaktadır.
Genellikle Gümrüklere hiteben verilen teminat mektupları bu tip mektuplardır. Burada bir meblağ yer almakla beraber, bu meblağa ek olarak faizlerin ve gecikme zamlarının da ödeneceği garanti edildiğinden bazen yazılı meblağın bir kaç katı tazmin riskiyle karşılaşmak mümkündür. Bu itibarla, böyle mektupların verilmesi söz konusu olduğu zaman risk-kredi teminatı dengesinin iyi ayarlanmış olmasına dikkat edilmelidir.
3. Teminat Mektuplarının Haczi
Teminat mektubunun verildiği muhatabın borcundan dolayı teminat mektubunun kendisinin haczi mümkün değildir. Çünkü, teminat mektubu, hisse senedi, tahvil ya da kambiyo senetleri gibi kıymetli evrak niteliğini haiz değildir.
4. Teminat Mektuplarının Temliki
Bu konuyu iki başlık altında özetlemek gerekir;
a) Muhatabın Teminat Mektubundan Doğan veya Doğacak Alacağının Temliki
Teminat mektubunun nakde dönüştürülmesi ancak muhatabın yazılı olarak tazmin talebinde bulunması ile mümkündür. Bu durumda, muhatabın teminat mektubundan doğan alacağının veya doğacak alacak hakkının temlikinde, muhatap yazılı olarak tazmin talebinde bulunmadıkça bankanın ödeme yükümlülüğü ortaya çıkmayacaktır. Ancak, muhatabın tazmin talebi geldiğinde temlik gereğince temellük edene bankaca ödeme yapılabilir. Bu nedenle, teminat mektuplarının temliki uygulamada tercih edilen bir teminat şekli değildir.
b) Teminat Mektubundan Muhatabın Değişmesi
Özellikle yabancı ülkelerden talep edilen teminat mektuplarında, bu mektupların devredilebilir (transferable) olması talep edilmektedir.
Muhatap tek başına bankanın muvafakatı olmaksızın böyle bir devir yetkisine sahip değildir. Bu ancak, başlangıçta teminat mektubu metninde devredilebilir kaydının bulunmasına ya da tarafların daha sonra bu yönde muvafakat vermesine bağlıdır.
5. Teminat Mektuplarına İhtiyati Tedbir Konulması
Bankaların ilk yazılı talepte muhatabın beyanını yeterli görerek ödeme taahhüdünde bulunmaları, bazen teminat mektuplarının haksız surette tazmin edilmelerine neden olmaktadır.
Bankanın teminat mektubu bedelini muhataba ödemesini durduracak tek yasal yol, mahkeme kararıyla mektup üzerine ihtiyati tedbir koydurulmasıdır. Tedbir kararının bankaya tebliği üzerine, teminat mektubunun tazmin talebi yerine getirilmez. Öyle ki, teminat mektubunun metninde “İhtiyati Tedbir Kararına Rağmen Ödeme Taahhüdü” bulunsa dahi, bu şart yazılmamış sayılır. Teminat mektubunun yurt dışındaki bir muhataba verilmiş olması halinde dahi aynı durum geçerlidir.
İhtiyati tedbir kararının varlığına rağmen ödeme yapılırsa, bu durum yetkililer hakkında bir aydan altı aya kadar hapis cezasını gerektiren suç oluşturur.
6. Kredi Sözleşmelerindeki Teminat Mektuplarıyla İlgili Hükümler
Banka müşterilerine imzalattığı genel kredi sözleşmelerindeki hükümler, herhangi tazmin talebi gelme riski anında, mahkemeye müracaat ederek teminat mektubu bedellerinin depo ettirilmesi imkanını vermektedir.
7. Bankalar Kanunundaki Teminat Mektuplarıyla İlgili Hükümler
Bankalar Kanununda gayrı nakdi kredi olarak tanımlanan teminat mektuplarına özellikle kredi limitleri açısından değinilmiştir. Bir bankanın düzenleyebileceği teminat mektupları sonsuz meblağda olamaz. Bununla ilgili limitler Bankalar Kanunu 38.maddesinde düzenlenmiş bulunmaktadır. Uygulamada zaman zaman karşılaşılan bir sorun da, bir kişinin gayrı nakdi kredisinden bir başka kişinin faydalandırılmak istenilmesidir. Bankanın kredili müşterisi yazılı talimat vererek; örneğin şirket ortakları ya da şirket çalışanları lehine teminat mektubu verilmesini istemektedir. Kendisine teminat mektubu kredisi açılmış ve genel kredi sözleşmesini imzalamış olandan başkası lehine teminat mektubu verilmesi Bankalar Kanununa göre yasaklanmıştır. Örneğin şirketin Yönetim Kurulu Başkanı, ya da imza yetkilileri dahi kendi lehlerine teminat mektubu düzenlenmesini isteme hakkına sahip değildirler. Yine aynı şekilde, genel kredi sözleşmesinde kefil olarak yer alanlar da kredili müşterinin kredisinden faydalanmak suretiyle kendi lehlerine teminat mektubu düzenlenmesini isteyemezler. Bunların aksine davranış, Bankalar Kanununa göre suç olup, cezayı gerektirmektedir.
Teminat Mektupları Uygulaması ve Karşılaşılan Sorunlar
Türkiye Bankalar Birliği tarafından Prof. Dr. Seza Reisoğlu'nun konuşmacı olarak katılımıyla 22 Ekim 2002 tarihinde düzenlenen "Teminat Mektupları Uygulaması ve Karşılaşılan Sorunlar" konulu konferansa ait konuşma metni
Teminat mektupları ile ilgili olarak önce genel nitelikte açıklamalar yapılacak, daha sonra özellik arzeden bazı konular üzerinde durulacaktır.
Teminat mektupları uygulamasının ilk yasal dayanağını Bakanlar Kurulu’nun 1928 yılında kabul ettiği ve Devlet İhalelerinde kullanılan teminat mektupları metinleri oluşturmuştur. Bu mektuplarda yer alan ve bankanın muhatabın ilk yazılı talebinde “protesto keşide etmesine; hüküm istihsaline ve borçlunun rızasını almaya gerek olmaksızın” derhal ödeme taahhüdü, bugüne kadar tüm teminat mektuplarında yer almış ve bu ibareler teminat mektuplarının niteliğini belirlemiştir. Resmi teminat mektupları metinleri, daha sonra çoğunlukla aynı şekilde özel kişilere hitaben verilen teminat mektuplarında da kullanılmaya başlamıştır.
Yukarıdaki ibareleri içermeyen teminat mektubu uygulamasına rastlanmadığından, Türkiye’deki tüm teminat mektuplarının ilk talepte ödeme garantisini -first demand guarantie- içerdiğini söylemek mümkündür.
Teminat mektuplarındaki bu ibareler nedeniyle 1967 ve 1969 yılında verilen iki İçtihadı Birleştirme Kararında banka teminat mektuplarının başkasının fiilini taahhüt niteliği taşıdığı, garanti sözleşmesi oluşturduğu ve kefalet sayılmayacağı sonucuna varılmıştır. Bu tür bir taahhüdün, kefaleti aşan bir yükümlülük içerdiği; asıl borca bağlı fer’i nitelik taşıyamayacağı ve bağımsız olduğu kabul edilmiştir.
Mahkemeler de 1969 yılından itibaren ilk talepte tazmin garantisi taşıyan teminat mektuplarını garanti sözleşmesi, BK. 110. maddedeki başkasının fiilini taahhüt saymışlardır.
Garanti sözleşmesi, kefaletten farklı olarak, yasalarda düzenlenmemiş; unsurları, nitelikleri ve hukuki sonuçları Öğreti ve Yargıtay Kararları ile belirlenmiştir.
Teminat mektuplarında kullanılan farklı terimler de zaman içinde istikrar kazanmıştır. Türk uygulamasında, garantiyi veren banka dışında; kendisine hitaben teminat mektubu verilen kişiye muhatap; bankanın lehine gayri nakdi kredi açtığı, teminat mektubu verdiği borçluya da lehtar denilmiştir.
Teminat mektubu genelde bankalar tarafından düzenlendiği halde; banka dışındaki kişilerin de geçerli olarak teminat mektubu verebileceklerini Yargıtay çeşitli kararlarında kabul etmiştir. Bu garantilerde de “protesto keşidesine hüküm istihsaline, borçlunun rızasını almaya gerek olmaksızın” ödeme taahhüdü yer aldığından bunların kefalet sayılması mümkün olmamasına rağmen Yargıtay Hukuk Genel Kurulu bir kararında (HGK 04.07.2001 19-534/583 Ankara Baro Der. 2001/3 Sh.240), garanti beyanının kredi kartı sözleşmesinin hemen altına alınmış olması; kredi sözleşmesine atıf yapılması, garanti veren kişinin bir menfaatinin olmaması, dostane ilişkilerle garantinin imzalanması gibi gerekçelerle burada bir kefaletin bulunduğunu kabul etmiştir. Belirtmek gerekir ki, bu kıstasların hiçbiri garanti sözleşmesini kefaletten ayırmaya imkân vermemektedir. Kaldı ki, Hukuk Genel Kurul Kararı, İçtihadı Birleştirme Kararına aykırı olduğu gibi; kişilerin isteseler de kefalet dışında başkasının fiilini taahhütlerinin geçersiz olacağı gibi Anayasanın himayesi altındaki sözleşme serbestisini de zedelemektedir.
Bir garanti sözleşmesi olan teminat mektuplarındaki temel unsur belli bir riskin garanti edilmesidir. Belirli olmayan riskler -lehtarı tüm ticari ilişkilerinden doğan risklerin garantisi gibi- garanti edilemeyeceği gibi; risk kavramı dışında olan ve riskin doğumunu engellemeyen borçluya (lehtara) ait def’iler de -borcun geçersizliği, imkânsızlık, mücbir sebep, sözleşmenin yapılmamış olması, ehliyetsizlik- garanti veren banka tarafından ileri sürülemeyecektir. Lehtarın def’ilerine örnek vermek gerekirse, teminat mektubu ile;
- Kefilin borcunu ödeyeceği garanti edilmiştir. Ancak kefalet geçersizdir.
- Haricen taşınmaz satışı yapılmış; alıcının satış bedelini ödeyeceği garanti edilmiştir. Ancak Tapu’da yapılmayan satış geçersizdir.
- Kiracının taşınmazı tahliye edeceği garanti edilmiştir. Ancak 6570 sayılı Yasaya göre tahliye istemek mümkün değildir.
Tüm bu örneklerde fiili garanti edilen kefil borcunu yerine getirmez ise; alıcı taşınmazın bedelini ödemezse; kiracı evi tahliye etmez ise garanti edilen risk doğmuş olacak; ancak lehtarın, muhataba karşı borcu ödememe şeklinde bir def’i ortaya çıkacaktır. Borçluya ait bu def’ileri bağımsız bir yükümlülük altına giren banka ileri süremeyecek; tazmin talebini yerine getirecek ve aralarındaki kontrgarantiye dayanarak lehtara rücu edecektir.
Buna karşılık; teminat mektubu banka ile muhatap arasında bir garanti sözleşmesi oluşturduğundan, Borçlar Hukukunun tüm diğer sözleşmeleri gibi, sözleşme tarafı banka, kendisine ait def’ileri -mektubun sahteliği, bankayı borç altına sokan kişilerin yetkili olmadığı, riskin sona erdiği veya gerçekleşmediği, teminat mektubunun ahlaka, adaba, kamu düzenine aykırılığı- ileri sürebilecektir.
Keza garanti veren banka risk doğmuş olsa dahi, Medeni Kanunun 2. maddesinde düzenlenen “Hakkın kötüye kullanılmasını Kanun himaye etmez” kuralına da dayanabilecektir.
Örnek vermek gerekir ise,
- Avans teminat mektubu verilmiş, ancak muhatap avansı lehtara ödememiştir.
- Lehtarın kredi borcunu iade edeceği garanti edilmiş, ancak kredi verilmemiştir.
- Müteahhidin yükümlülüğü garanti edilmiş, ancak iş sahibi kendi yükümlülüğü olan arsayı tahsis edememiş veya inşaat ruhsatını almamıştır.
- İhracatçının malı göndereceği garanti edilmiş, ancak ithalatçı FOB satışı nedeniyle kendi yükümlülüğünde olan gemiyi sağlayamamıştır.
Tüm bu örneklerde lehtarın garanti edilen edimini yerine getirememesi halinde -avans miktarının veya kredinin iade edilmemesi, inşaatın yapılmaması, malların gönderilmemesi- garanti edilen risk doğduğundan lehtarın bu örneklerdeki def’ilerine banka dayanamayacaktır. Buna karşılık; muhatabın riskin doğduğunu ileri sürerek tazmin talebinde bulunması halinde banka bir hakkın kötüye kullanıldığını -avansın verilmemesine veya kredinin kullandırılmamasına rağmen iade edilmediğine, arsanın temin edilmemesine rağmen inşaatın yapılmadığına, geminin sağlanmamasına rağmen malların gönderilmediğine dayanan tazmin talepleri- ileri sürebilir.
Ancak belirtmek gerekir ki, teminat mektuplarının niteliği gereği bankalar, usulüne uygun bir yazılı tazmin talebinin gelmesi halinde, Yargıtay’ın yerleşmiş kararlarında belirtildiği gibi, derhal ve hiç bir araştırma yapmadan ödemeye ve lehtara rücu etmeye yetkilidir. Bankanın itibarı da, usulüne uygun bir teminat mektubunun derhal tazminini gerektirir.
Bir banka ancak likit, kesin bir delil varsa muhataba ödeme yapamaz, öderse zarara kendisi katlanır. Likit, kesin deliller riskin sona emesi -örneğin garanti edilen borcun ödenmiş olduğunun veya garanti edilen verginin yatırıldığının belgelenmesi- veya risk doğsa da tazmin talebinin hakkın kötüye kullanılması ile ilgili olabilir.
Bir bankanın, tazmin talebi halinde ödeme yetkisi bulunmasına karşı mutlaka ödeme yükümlülüğü yoktur. Diğer bir deyişle, bankanın ilk talepte ödeme garantisinin sonucu; önce öde, sonra dava et şeklinde yorumlanamaz. Böyle bir sonuç belli bir riskin garantisini gerektiren teminat mektubunun niteliğine ve dava ekonomisine aykırı olur. Buna karşılık, ilk talepte ödeme garantisinin sonucu; ispat külfeti yer değiştirir. Bankayı dava eden muhatap değil, fakat mektubu veren davalı banka riskin doğmadığını, sona erdiğini, risk doğmuş olsa bile hakkın kötüye kullanıldığını ispat zorunda kalır.
Mektubu tazmin talebini reddeden banka için önemli diğer bir risk muhatabın dava açma yerine, bankaya ödeme emri göndermesidir. Banka ödeme emrine ancak borcun olmadığını ileri sürerek itiraz edebilir. Ancak lehtar ile muhatap arasındaki hukuki ilişkinin tamamen dışında olan bankanın riskin doğmadığını, sona erdiğini veya hakkın kötüye kullanıldığını ispat etmesi çok zor olup; bu konuda lehtarın gerekli tüm belgeleri sağlaması gerekir. Bankanın itirazı halinde, itirazın iptali davası açılırsa ve banka davayı kaybederse, ayrıca %40 olan icra inkar tazminatını ödeyip ödemeyeceği tartışmalıdır. Yargıtay’ın bu konuda çelişkili kararları vardır. Yargıtay yerleşik içtihatlarında icra inkar tazminatına karar verilmesi için mutlaka likit, kesin bir borcun varlığını haklı olarak aramaktadır. Ancak mektuptaki meblağ, bankanın azami sorumluluğunu belirlemekte; ihtilaf halinde riskin doğup doğmadığı ve ne miktar için doğduğu mahkeme kararı ile saptanmakta; Yargıtay kararlarında ise teminat mektubunun bir kıymetli evrak olmadığı, borç ikrarı oluşturmadığı kabul edilmekte olduğundan burada likit, kesin bir borçtan söz edilmeyecek ve banka davayı kaybetse dahi %40 icra inkar tazminatına hükmetme kanuna aykırılık oluşturacaktır.
Teminat mektuplarının garanti sözleşmesi sayılması sonucu; banka asli ve bağımsız bir yükümlülük altına girmekte, kefaletten farklı olarak ödediği meblağları kanuni halefiyet nedeniyle borçluya rücu edememektedir. Bu durumda bankanın lehtara -borçluya- rücu edebilmesi için uygulamada konrtgaranti denilen bir sözleşme banka ile lehtar arasında imzalanmakta veya kredi sözleşmesine rücu imkânı veren hükümlere yer verilmektedir.
Banka teminat mektupları vadeli veya vadesiz olabilmekte, vadeli teminat mektuplarında bankaların sorumluluğu ya vade sonunda sona ermekte veya muhatabın riskin vade içinde doğduğunu ispat etmesi koşulu ile on yıl devam etmektedir. Banka, yükümlülüğünün vade sonunda sona ermesini sağlamak için mutlaka BK. 110 uncu maddeye eklenen fıkra ve Yargıtay kararları uyarınca teminat mektubunda “Bu teminat mektubu vade sonuna kadar yazılı tazmin talebinde bulunulmadığı takdirde hükümsüz olacaktır” şeklinde veya benzeri bir ibareye yer vermelidir. “Bu teminat mektubu ......... tarihine kadar vadelidir” ibaresi ile yetinilmesi halinde ise muhatap, riskin vade içinde doğduğunu ispat koşulu ile on yıl içinde bankadan mektubun tazminini isteme hakkına sahip olmaktadır.
Uygulamada teminat mektuplarının ne zaman zamanaşımına uğradığı da sorun yaratmaktadır. Vadesiz teminat mektuplarında, on yıllık zamanaşımının başlangıç tarihi, mektubun tazmin edildiği tarih değildir. Borçlar Kanununa göre bir borç muaccel olduğu tarihten itibaren zamanaşımı işlemeye başladığından; teminat mektuplarında da on yıllık zamanaşımı, garanti edilen riskin muaccel olduğu tarihten itibaren başlayacaktır. Oysa taraflar arasındaki ilişkinin dışında olan bankanın muacceliyeti belirlemesi çok zordur. Böylece 15-20 sene evvel verilmiş olan bir teminat mektubunun dahi zamanaşımına uğrayıp uğramadığını tespit sorun yaratabilmektedir.
BK. 110/2 maddede öngörülen şartı içeren vadeli bir teminat mektubunun tazmini vade içinde istenmez ise, vade sonunda bankanın yükümlülüğü son bulacağından zamanaşımı söz konusu olmayacaktır. Sadece vade tarihini belirleyen teminat mektubu ise en geç düzenleme tarihinden itibaren on yıl sonunda zamanaşımına uğrayacaktır.
Teminat mektupları ile banka asli ve bağımsız bir yükümlülük altına girdiğinden, fer’i nitelikteki kefaletten farklı olarak muhatabın, lehtardan olan alacağının temliki ile birlikte teminat mektubu da yeni alacaklıya geçmemektedir. Teminat mektubu muhatabının değişmesi ancak bankanın sözleşme tarafı değişikliğine -muhatabın değişikliğine- muvafakat etmesi ile mümkün bulunmaktadır. Teminat mektubu metninde “transferable” “devredilebilir” gibi ibarelerin yer alması halinde, banka devre başlangıçta muvafakat ettiğinden, bankanın yeni bir iznine gerek olmaksızın muhatap değişikliği mümkündür. Buna karşılık, teminat mektubu nedeniyle doğmuş veya doğacak bir alacak, diğer alacaklar gibi temlik edilebilecek, ancak bankanın yeni alacaklıya ödeme yükümlülüğü, alacağını temlik etmiş bulunan muhatabın usulüne uygun tazmin talebine bağlı olacaktır.
Teminat mektupları kıymetli evrak olmadığından; mektubun haczi mümkün olmayacak; ancak teminat mektubundan doğan alacak haczedilebilecektir.
Teminat mektuplarının tazmin talebi yazılı şekilde olmalıdır. Teminat mektubu bir garanti sözleşmesi olduğundan, diğer bir deyişle belli bir risk garanti edildiğinden sadece “tazmin ediniz” şeklindeki bir tazmin talebi usulüne uygun olmayacak, mutlaka lehtarın “taahüdünü yerine getirmediği” bildirilecektir. Aksi takdirde, lehtara rücu sorun yaratabilecektir.
Bu genel nitelikli açıklamalardan sonra aşağıda uygulamada öncelik arzeden bazı konulara değinilecektir.
Gümrüklere verilen teminat mektupları
Yeniden düzenlenen Gümrük Yönetmeliği (RG 31.05.2002)’ne kadar gümrüklere verilen teminat mektupları bankalar için büyük risk oluşturuyordu. Mektuplarda yer alan “mektubun düzenleme tarihi ile tazmin talebi arasındaki süre için kanuni faiz” “ertelenen vergiye tahakkuk tarihinden itibaren tecilli faizin %50 fazlası” gibi ibareler, mektup metinlerindeki meblağlara bağlı olmaksızın bankaları sınırsız risk altına sokmakta; Gümrük İdarelerinin tazmin talepleri ise genelde zamanaşımı süresinin bitimine yakın zamanda yapıldığından örneğin 1 milyar meblağlı bir teminat mektubu için banka 6-7 milyar ödeme zorunda kalmaktaydı.
Yeni Gümrük Yönetmeliğinde (RG 31.05.2002) Gümrük Mevzuatı uyarınca, Gümrük İdarelerinin gümrük vergilerinin ödenmesini sağlamak üzere teminat (Md.65) alacağı belirtildikten sonra değişik Ek 59’da (RG 14.08.2002) teminat mektubu metni verilmektedir. Yeni düzenlemeye göre bankanın tazmin yükümlülüğü, mektup metnindeki azami meblağ ile sınırlı olmakta, ayıca bankaya tazmin talebinden itibaren mektup meblağını 7 gün içinde ödeme imkânı sağlamaktadır. Böylece bankanın temerrüdü 7. günü takiben -8. günde- ortaya çıkmaktadır. Yeni teminat mektupları eskilerinden farklı olarak vadeli verilmektedir. Ancak BK. 110/2’de ve Yargıtay kararlarında öngörüldüğü şekilde bir ibare mektup metininde yer almadığından, bankanın sorumluluğu on yıllık zamanaşımı süresi sonuna kadar devam etmektedir.
Kamu İhale Kanununa göre verilen teminat mektupları
4734 sayılı Kamu İhale Kanunu ve 4735 sayılı Kamu İhale Sözleşmeleri Kanunu 01.01.2003 tarihinde yürürlüğe girmektedir. Ancak bu Kanunlar 2886 sayılı Devlet İhale Kanununu yürürlükten kaldırmamaktadır. Sadece Kamu İhale Kanunu kapsamına giren işlerde Devlet İhale Kanunu uygulanmayacaktır. Kamu İhale Kanununun gerekçesinde devletin harcamalarını gerektiren ihalelerle, devlete gelir getiren ihalelerin farklı nitelikte olduğuna değinilmekte ve bu iki tür ihalenin ayrı Kanunlarda düzenlenmesi gerektiği vurgulanmaktadır.
Kamu harcamalarını gerektiren mal ve hizmet alımı ve yapım işleri Kamu İhale Kanunu kapsamı içindedir. Buna karşılık; gelir getirecek mal ve hizmet satımı, ayni hak verilmesi ile ilgili ihalelere Devlet İhale Kanunu uygulanacaktır.
Kamu İhale Kanununa tabi kuruluşlar da çok genişletilmiş, Devlet İhale Kanununda sayılan kuruluşlara ilave olarak tüm Kamu İktisadi Teşebbüsleri, Sosyal Güvenlik Kuruluşları, bu Kanuna tabi kuruluşların birlikte veya ayrı ayrı %50’den fazla sermayesine sahip oldukları kuruluşlar tarafından yapılacak ihaleler de Kamu İhale Kanunu kapsamına alınmıştır.
Bundan böyle bankaların teminat mektuplarını çok büyük ölçüde Kamu İhale Kanununa tabi olarak verecekleri; Devlet İhale Kanununun önemini yitirdiği söylenebilir.
Kamu İhale Kanununa göre, teminat mektuplarını Türkiye’de kurulu bankalar ile yabancı bankaların Türkiye’deki şubeleri verebilirler. Yabancı bankalar ise, Türk bankalarına konrtgaranti vererek teminat mektubu düzenlenmesini isteyebileceklerdir.
Kamu İhale Kanunu Tasarısının 35. maddesinde, teminat mektubu verecek bankaların Resmi Gazetede ilanı, bankalara limit belirleme, limit içi teminat mektubu verme, idarenin tazmin talebini her ne sebeple olursa olsun yerine getirmeyen bankaların mektuplarının bir yıl süre ile kabul edilmemesi gibi hususlar yer almakta iken bu madde bu şekilde yasalaşmamıştır.
Kamu İhale Yasasına göre, tüm bankalar teminat mektubu verebileceklerdir; Devlet İhale Kanunundan farklı olarak herhangi bir limit veya limit içi teminat mektubu söz konusu olmayacak, mektubu tazmin etmeyen bankaların belli bir süre mektuplarının kabul edilmemesi şeklinde bir yaptırım uygulanamayacaktır.
Herhangi bir değişikliğe uğramamış olan Devlet İhale Kanunundan farklı olarak Kamu İhale Kanununa tabi gerek geçici teminat mektupları, gerekse kesin teminat mektupları süreli olacaktır.
Buna karşılık, Devlet İhale Kanunundaki gibi Kamu İhale Kanununa göre de teminat mektupları haczedilemeyecek veya üzerlerine ihtiyati tedbir konulamayacak; bankaların -sosyal sigorta primlerinden ve ücretlerden vergi stopajından- yasal sorumlulukları bulunacaktır.
Euroya dönüşen ulusal paralar üzerinden verilmiş teminat mektupları
12 Avrupa Birliği üyesi devlet, ulusal paralarını 31 Aralık 1998 tarihinde çapraz sabit kur üzerinden Euroye eşitlemiştir -örneğin 1 EU=1.955583 DM-. Ulusal paraların tümü de en geç 30.06.2002’de yürürlükten kaldırılmıştır.
4538 sayılı Euronun Hukuki Araçlara Etkisi Hakkında Kanun (RG 07.02.2000), ulusal para üzerinden düzenlenen sözleşmelerin hukuki sonuçlarını düzenlemiştir. Örneğin;
- Alman Markı üzerinden düzenlenmiş teminat mektubunda/kontrgarantide bankanın yükümlülüğü, teminat mektubundaki Alman Markının 31 Aralık 1998 tarihinde belirlenmiş çapraz serbest kur üzerinden hesaplanacak Euro’dur. Ulusal paranın yerini Euro’nun alması sözleşme taraflarına sözleşmeyi sona erdirme hakkı tanımamaktadır.
- Talep üzerine ödeme yapılmazsa; gecikme faizinin hesaplanmasında Euro faizi gözönünde tutulacaktır.
- Daha önce ulusal paralar üzerinden açılmış davalardaki müddeabih kendiliğinden Euro’ya dönüşecektir.
- Teminat mektubunu yeniden Euro olarak düzenlemeye gerek yoksa da; mektup değiştirilmek istenirse bu değişiklik damga vergisine tabi değildir.
Türk Bankalarının Türk muhataplara yabancı dilde teminat mektubu vermeleri
Bugün de geçerliliğini koruyan 1926 tarihli ve 805 sayılı “İktisadi Müesseselerde Mecburi Türkçe Kullanılması Hakkında Kanun”un 1 inci maddesine göre “Türk tabiiyetindeki her nevi şirket ve müesseseler, Türkiye dahilindeki muamele, mukavele, muhabere, hesap ve defterlerini Türkçe tutmaya mecburdurlar”. Türk tabiiyetindeki şirket tanımına Türkiye’de kurulu bankalar girmekte, şubelerin ayrı tüzel kişilikleri bulunmadığından, yabancı bankaların Türkiye’deki şubeleri 805 sayılı Kanunun kapsamı dışında kalmaktadır.
4. maddeye göre ise birinci fıkraya aykırı olarak düzenlenmiş evrak ve vesaik; bunları düzenleyen şirket ve müesseseler lehine nazarı itibare alınmaz.
Yargıtay 1979 yılında verdiği bir kararda teminat mektubunda İngilizce yer alan “teminat mektubu 15.3.1978 gününü geçmemek üzere yükleme tarihinden bir ay sonuna kadar geçerlidir” ibaresini, 805 sayılı Kanuna göre geçersiz saymış, ancak beynelmilal terim ve tabirlerin işin niteliği ve özelliği gereği ise yabancı dilde yazılabileceğini kabul etmiştir. Böylece banka süresiz bir teminat mektubu verir duruma gelmiştir.
Yüksek Mahkeme 1980 yılında verdiği diğer bir kararda ise, Fransızca belgelendirme ile ilgili kayıtlardan, 805 sayılı Yasanın 4. maddesi gereği davalının yararlanamayacağını kararlaştırmıştır.
Teminat mektupları sözleşme niteliğinde olmalarına rağmen bankalar tarafından düzenlendiğinden ve sadece bankalar yükümlülük altına girdiğinden, özel şartlar dışında tümüyle muhataplar lehine hükümler ihtiva ettiklerinden özellikle 4. madde ve ilgili Yargıtay kararları gözönünde tutulduğunda yabancı dildeki teminat mektuplarının Türk tabiiyetindeki muhatap açısından geçerli olacağı; buna karşılık Türk bankasının yükümlülüğünü sınırlayan vade gibi; teminat mektubunun geçerliliği için akreditif açılması; mektupta sayılan belgelerin ibrazı gibi özel şartların yabancı dilde yazılması halinde mektubu düzenleyen bankanın bu şartlardan yararlanamayacağı, diğer bir deyişle bunları ileri süremeyeceği sonucuna varılabilecektir.
Bu durumda özellikle Türk tabiiyetindeki muhatapların yabancı dilde teminat mektubu verilmesinde ısrar etmeleri halinde, teminat mektubu düzenleyen Türk bankasının, mektubu yabancı dilde düzenlemeye yetkili olduğu, yabancı dildeki mektubun veya mektuptaki şartların geçersiz sayılması halinde dahi; mektubun tazmini halinde rücu hakkının bulunduğu şeklindeki hususların kontrgarantide yer alması uygun olacaktır.
Prof.Dr. Seza Reisoğlu
Teminat mektupları ile ilgili olarak önce genel nitelikte açıklamalar yapılacak, daha sonra özellik arzeden bazı konular üzerinde durulacaktır.
Teminat mektupları uygulamasının ilk yasal dayanağını Bakanlar Kurulu’nun 1928 yılında kabul ettiği ve Devlet İhalelerinde kullanılan teminat mektupları metinleri oluşturmuştur. Bu mektuplarda yer alan ve bankanın muhatabın ilk yazılı talebinde “protesto keşide etmesine; hüküm istihsaline ve borçlunun rızasını almaya gerek olmaksızın” derhal ödeme taahhüdü, bugüne kadar tüm teminat mektuplarında yer almış ve bu ibareler teminat mektuplarının niteliğini belirlemiştir. Resmi teminat mektupları metinleri, daha sonra çoğunlukla aynı şekilde özel kişilere hitaben verilen teminat mektuplarında da kullanılmaya başlamıştır.
Yukarıdaki ibareleri içermeyen teminat mektubu uygulamasına rastlanmadığından, Türkiye’deki tüm teminat mektuplarının ilk talepte ödeme garantisini -first demand guarantie- içerdiğini söylemek mümkündür.
Teminat mektuplarındaki bu ibareler nedeniyle 1967 ve 1969 yılında verilen iki İçtihadı Birleştirme Kararında banka teminat mektuplarının başkasının fiilini taahhüt niteliği taşıdığı, garanti sözleşmesi oluşturduğu ve kefalet sayılmayacağı sonucuna varılmıştır. Bu tür bir taahhüdün, kefaleti aşan bir yükümlülük içerdiği; asıl borca bağlı fer’i nitelik taşıyamayacağı ve bağımsız olduğu kabul edilmiştir.
Mahkemeler de 1969 yılından itibaren ilk talepte tazmin garantisi taşıyan teminat mektuplarını garanti sözleşmesi, BK. 110. maddedeki başkasının fiilini taahhüt saymışlardır.
Garanti sözleşmesi, kefaletten farklı olarak, yasalarda düzenlenmemiş; unsurları, nitelikleri ve hukuki sonuçları Öğreti ve Yargıtay Kararları ile belirlenmiştir.
Teminat mektuplarında kullanılan farklı terimler de zaman içinde istikrar kazanmıştır. Türk uygulamasında, garantiyi veren banka dışında; kendisine hitaben teminat mektubu verilen kişiye muhatap; bankanın lehine gayri nakdi kredi açtığı, teminat mektubu verdiği borçluya da lehtar denilmiştir.
Teminat mektubu genelde bankalar tarafından düzenlendiği halde; banka dışındaki kişilerin de geçerli olarak teminat mektubu verebileceklerini Yargıtay çeşitli kararlarında kabul etmiştir. Bu garantilerde de “protesto keşidesine hüküm istihsaline, borçlunun rızasını almaya gerek olmaksızın” ödeme taahhüdü yer aldığından bunların kefalet sayılması mümkün olmamasına rağmen Yargıtay Hukuk Genel Kurulu bir kararında (HGK 04.07.2001 19-534/583 Ankara Baro Der. 2001/3 Sh.240), garanti beyanının kredi kartı sözleşmesinin hemen altına alınmış olması; kredi sözleşmesine atıf yapılması, garanti veren kişinin bir menfaatinin olmaması, dostane ilişkilerle garantinin imzalanması gibi gerekçelerle burada bir kefaletin bulunduğunu kabul etmiştir. Belirtmek gerekir ki, bu kıstasların hiçbiri garanti sözleşmesini kefaletten ayırmaya imkân vermemektedir. Kaldı ki, Hukuk Genel Kurul Kararı, İçtihadı Birleştirme Kararına aykırı olduğu gibi; kişilerin isteseler de kefalet dışında başkasının fiilini taahhütlerinin geçersiz olacağı gibi Anayasanın himayesi altındaki sözleşme serbestisini de zedelemektedir.
Bir garanti sözleşmesi olan teminat mektuplarındaki temel unsur belli bir riskin garanti edilmesidir. Belirli olmayan riskler -lehtarı tüm ticari ilişkilerinden doğan risklerin garantisi gibi- garanti edilemeyeceği gibi; risk kavramı dışında olan ve riskin doğumunu engellemeyen borçluya (lehtara) ait def’iler de -borcun geçersizliği, imkânsızlık, mücbir sebep, sözleşmenin yapılmamış olması, ehliyetsizlik- garanti veren banka tarafından ileri sürülemeyecektir. Lehtarın def’ilerine örnek vermek gerekirse, teminat mektubu ile;
- Kefilin borcunu ödeyeceği garanti edilmiştir. Ancak kefalet geçersizdir.
- Haricen taşınmaz satışı yapılmış; alıcının satış bedelini ödeyeceği garanti edilmiştir. Ancak Tapu’da yapılmayan satış geçersizdir.
- Kiracının taşınmazı tahliye edeceği garanti edilmiştir. Ancak 6570 sayılı Yasaya göre tahliye istemek mümkün değildir.
Tüm bu örneklerde fiili garanti edilen kefil borcunu yerine getirmez ise; alıcı taşınmazın bedelini ödemezse; kiracı evi tahliye etmez ise garanti edilen risk doğmuş olacak; ancak lehtarın, muhataba karşı borcu ödememe şeklinde bir def’i ortaya çıkacaktır. Borçluya ait bu def’ileri bağımsız bir yükümlülük altına giren banka ileri süremeyecek; tazmin talebini yerine getirecek ve aralarındaki kontrgarantiye dayanarak lehtara rücu edecektir.
Buna karşılık; teminat mektubu banka ile muhatap arasında bir garanti sözleşmesi oluşturduğundan, Borçlar Hukukunun tüm diğer sözleşmeleri gibi, sözleşme tarafı banka, kendisine ait def’ileri -mektubun sahteliği, bankayı borç altına sokan kişilerin yetkili olmadığı, riskin sona erdiği veya gerçekleşmediği, teminat mektubunun ahlaka, adaba, kamu düzenine aykırılığı- ileri sürebilecektir.
Keza garanti veren banka risk doğmuş olsa dahi, Medeni Kanunun 2. maddesinde düzenlenen “Hakkın kötüye kullanılmasını Kanun himaye etmez” kuralına da dayanabilecektir.
Örnek vermek gerekir ise,
- Avans teminat mektubu verilmiş, ancak muhatap avansı lehtara ödememiştir.
- Lehtarın kredi borcunu iade edeceği garanti edilmiş, ancak kredi verilmemiştir.
- Müteahhidin yükümlülüğü garanti edilmiş, ancak iş sahibi kendi yükümlülüğü olan arsayı tahsis edememiş veya inşaat ruhsatını almamıştır.
- İhracatçının malı göndereceği garanti edilmiş, ancak ithalatçı FOB satışı nedeniyle kendi yükümlülüğünde olan gemiyi sağlayamamıştır.
Tüm bu örneklerde lehtarın garanti edilen edimini yerine getirememesi halinde -avans miktarının veya kredinin iade edilmemesi, inşaatın yapılmaması, malların gönderilmemesi- garanti edilen risk doğduğundan lehtarın bu örneklerdeki def’ilerine banka dayanamayacaktır. Buna karşılık; muhatabın riskin doğduğunu ileri sürerek tazmin talebinde bulunması halinde banka bir hakkın kötüye kullanıldığını -avansın verilmemesine veya kredinin kullandırılmamasına rağmen iade edilmediğine, arsanın temin edilmemesine rağmen inşaatın yapılmadığına, geminin sağlanmamasına rağmen malların gönderilmediğine dayanan tazmin talepleri- ileri sürebilir.
Ancak belirtmek gerekir ki, teminat mektuplarının niteliği gereği bankalar, usulüne uygun bir yazılı tazmin talebinin gelmesi halinde, Yargıtay’ın yerleşmiş kararlarında belirtildiği gibi, derhal ve hiç bir araştırma yapmadan ödemeye ve lehtara rücu etmeye yetkilidir. Bankanın itibarı da, usulüne uygun bir teminat mektubunun derhal tazminini gerektirir.
Bir banka ancak likit, kesin bir delil varsa muhataba ödeme yapamaz, öderse zarara kendisi katlanır. Likit, kesin deliller riskin sona emesi -örneğin garanti edilen borcun ödenmiş olduğunun veya garanti edilen verginin yatırıldığının belgelenmesi- veya risk doğsa da tazmin talebinin hakkın kötüye kullanılması ile ilgili olabilir.
Bir bankanın, tazmin talebi halinde ödeme yetkisi bulunmasına karşı mutlaka ödeme yükümlülüğü yoktur. Diğer bir deyişle, bankanın ilk talepte ödeme garantisinin sonucu; önce öde, sonra dava et şeklinde yorumlanamaz. Böyle bir sonuç belli bir riskin garantisini gerektiren teminat mektubunun niteliğine ve dava ekonomisine aykırı olur. Buna karşılık, ilk talepte ödeme garantisinin sonucu; ispat külfeti yer değiştirir. Bankayı dava eden muhatap değil, fakat mektubu veren davalı banka riskin doğmadığını, sona erdiğini, risk doğmuş olsa bile hakkın kötüye kullanıldığını ispat zorunda kalır.
Mektubu tazmin talebini reddeden banka için önemli diğer bir risk muhatabın dava açma yerine, bankaya ödeme emri göndermesidir. Banka ödeme emrine ancak borcun olmadığını ileri sürerek itiraz edebilir. Ancak lehtar ile muhatap arasındaki hukuki ilişkinin tamamen dışında olan bankanın riskin doğmadığını, sona erdiğini veya hakkın kötüye kullanıldığını ispat etmesi çok zor olup; bu konuda lehtarın gerekli tüm belgeleri sağlaması gerekir. Bankanın itirazı halinde, itirazın iptali davası açılırsa ve banka davayı kaybederse, ayrıca %40 olan icra inkar tazminatını ödeyip ödemeyeceği tartışmalıdır. Yargıtay’ın bu konuda çelişkili kararları vardır. Yargıtay yerleşik içtihatlarında icra inkar tazminatına karar verilmesi için mutlaka likit, kesin bir borcun varlığını haklı olarak aramaktadır. Ancak mektuptaki meblağ, bankanın azami sorumluluğunu belirlemekte; ihtilaf halinde riskin doğup doğmadığı ve ne miktar için doğduğu mahkeme kararı ile saptanmakta; Yargıtay kararlarında ise teminat mektubunun bir kıymetli evrak olmadığı, borç ikrarı oluşturmadığı kabul edilmekte olduğundan burada likit, kesin bir borçtan söz edilmeyecek ve banka davayı kaybetse dahi %40 icra inkar tazminatına hükmetme kanuna aykırılık oluşturacaktır.
Teminat mektuplarının garanti sözleşmesi sayılması sonucu; banka asli ve bağımsız bir yükümlülük altına girmekte, kefaletten farklı olarak ödediği meblağları kanuni halefiyet nedeniyle borçluya rücu edememektedir. Bu durumda bankanın lehtara -borçluya- rücu edebilmesi için uygulamada konrtgaranti denilen bir sözleşme banka ile lehtar arasında imzalanmakta veya kredi sözleşmesine rücu imkânı veren hükümlere yer verilmektedir.
Banka teminat mektupları vadeli veya vadesiz olabilmekte, vadeli teminat mektuplarında bankaların sorumluluğu ya vade sonunda sona ermekte veya muhatabın riskin vade içinde doğduğunu ispat etmesi koşulu ile on yıl devam etmektedir. Banka, yükümlülüğünün vade sonunda sona ermesini sağlamak için mutlaka BK. 110 uncu maddeye eklenen fıkra ve Yargıtay kararları uyarınca teminat mektubunda “Bu teminat mektubu vade sonuna kadar yazılı tazmin talebinde bulunulmadığı takdirde hükümsüz olacaktır” şeklinde veya benzeri bir ibareye yer vermelidir. “Bu teminat mektubu ......... tarihine kadar vadelidir” ibaresi ile yetinilmesi halinde ise muhatap, riskin vade içinde doğduğunu ispat koşulu ile on yıl içinde bankadan mektubun tazminini isteme hakkına sahip olmaktadır.
Uygulamada teminat mektuplarının ne zaman zamanaşımına uğradığı da sorun yaratmaktadır. Vadesiz teminat mektuplarında, on yıllık zamanaşımının başlangıç tarihi, mektubun tazmin edildiği tarih değildir. Borçlar Kanununa göre bir borç muaccel olduğu tarihten itibaren zamanaşımı işlemeye başladığından; teminat mektuplarında da on yıllık zamanaşımı, garanti edilen riskin muaccel olduğu tarihten itibaren başlayacaktır. Oysa taraflar arasındaki ilişkinin dışında olan bankanın muacceliyeti belirlemesi çok zordur. Böylece 15-20 sene evvel verilmiş olan bir teminat mektubunun dahi zamanaşımına uğrayıp uğramadığını tespit sorun yaratabilmektedir.
BK. 110/2 maddede öngörülen şartı içeren vadeli bir teminat mektubunun tazmini vade içinde istenmez ise, vade sonunda bankanın yükümlülüğü son bulacağından zamanaşımı söz konusu olmayacaktır. Sadece vade tarihini belirleyen teminat mektubu ise en geç düzenleme tarihinden itibaren on yıl sonunda zamanaşımına uğrayacaktır.
Teminat mektupları ile banka asli ve bağımsız bir yükümlülük altına girdiğinden, fer’i nitelikteki kefaletten farklı olarak muhatabın, lehtardan olan alacağının temliki ile birlikte teminat mektubu da yeni alacaklıya geçmemektedir. Teminat mektubu muhatabının değişmesi ancak bankanın sözleşme tarafı değişikliğine -muhatabın değişikliğine- muvafakat etmesi ile mümkün bulunmaktadır. Teminat mektubu metninde “transferable” “devredilebilir” gibi ibarelerin yer alması halinde, banka devre başlangıçta muvafakat ettiğinden, bankanın yeni bir iznine gerek olmaksızın muhatap değişikliği mümkündür. Buna karşılık, teminat mektubu nedeniyle doğmuş veya doğacak bir alacak, diğer alacaklar gibi temlik edilebilecek, ancak bankanın yeni alacaklıya ödeme yükümlülüğü, alacağını temlik etmiş bulunan muhatabın usulüne uygun tazmin talebine bağlı olacaktır.
Teminat mektupları kıymetli evrak olmadığından; mektubun haczi mümkün olmayacak; ancak teminat mektubundan doğan alacak haczedilebilecektir.
Teminat mektuplarının tazmin talebi yazılı şekilde olmalıdır. Teminat mektubu bir garanti sözleşmesi olduğundan, diğer bir deyişle belli bir risk garanti edildiğinden sadece “tazmin ediniz” şeklindeki bir tazmin talebi usulüne uygun olmayacak, mutlaka lehtarın “taahüdünü yerine getirmediği” bildirilecektir. Aksi takdirde, lehtara rücu sorun yaratabilecektir.
Bu genel nitelikli açıklamalardan sonra aşağıda uygulamada öncelik arzeden bazı konulara değinilecektir.
Gümrüklere verilen teminat mektupları
Yeniden düzenlenen Gümrük Yönetmeliği (RG 31.05.2002)’ne kadar gümrüklere verilen teminat mektupları bankalar için büyük risk oluşturuyordu. Mektuplarda yer alan “mektubun düzenleme tarihi ile tazmin talebi arasındaki süre için kanuni faiz” “ertelenen vergiye tahakkuk tarihinden itibaren tecilli faizin %50 fazlası” gibi ibareler, mektup metinlerindeki meblağlara bağlı olmaksızın bankaları sınırsız risk altına sokmakta; Gümrük İdarelerinin tazmin talepleri ise genelde zamanaşımı süresinin bitimine yakın zamanda yapıldığından örneğin 1 milyar meblağlı bir teminat mektubu için banka 6-7 milyar ödeme zorunda kalmaktaydı.
Yeni Gümrük Yönetmeliğinde (RG 31.05.2002) Gümrük Mevzuatı uyarınca, Gümrük İdarelerinin gümrük vergilerinin ödenmesini sağlamak üzere teminat (Md.65) alacağı belirtildikten sonra değişik Ek 59’da (RG 14.08.2002) teminat mektubu metni verilmektedir. Yeni düzenlemeye göre bankanın tazmin yükümlülüğü, mektup metnindeki azami meblağ ile sınırlı olmakta, ayıca bankaya tazmin talebinden itibaren mektup meblağını 7 gün içinde ödeme imkânı sağlamaktadır. Böylece bankanın temerrüdü 7. günü takiben -8. günde- ortaya çıkmaktadır. Yeni teminat mektupları eskilerinden farklı olarak vadeli verilmektedir. Ancak BK. 110/2’de ve Yargıtay kararlarında öngörüldüğü şekilde bir ibare mektup metininde yer almadığından, bankanın sorumluluğu on yıllık zamanaşımı süresi sonuna kadar devam etmektedir.
Kamu İhale Kanununa göre verilen teminat mektupları
4734 sayılı Kamu İhale Kanunu ve 4735 sayılı Kamu İhale Sözleşmeleri Kanunu 01.01.2003 tarihinde yürürlüğe girmektedir. Ancak bu Kanunlar 2886 sayılı Devlet İhale Kanununu yürürlükten kaldırmamaktadır. Sadece Kamu İhale Kanunu kapsamına giren işlerde Devlet İhale Kanunu uygulanmayacaktır. Kamu İhale Kanununun gerekçesinde devletin harcamalarını gerektiren ihalelerle, devlete gelir getiren ihalelerin farklı nitelikte olduğuna değinilmekte ve bu iki tür ihalenin ayrı Kanunlarda düzenlenmesi gerektiği vurgulanmaktadır.
Kamu harcamalarını gerektiren mal ve hizmet alımı ve yapım işleri Kamu İhale Kanunu kapsamı içindedir. Buna karşılık; gelir getirecek mal ve hizmet satımı, ayni hak verilmesi ile ilgili ihalelere Devlet İhale Kanunu uygulanacaktır.
Kamu İhale Kanununa tabi kuruluşlar da çok genişletilmiş, Devlet İhale Kanununda sayılan kuruluşlara ilave olarak tüm Kamu İktisadi Teşebbüsleri, Sosyal Güvenlik Kuruluşları, bu Kanuna tabi kuruluşların birlikte veya ayrı ayrı %50’den fazla sermayesine sahip oldukları kuruluşlar tarafından yapılacak ihaleler de Kamu İhale Kanunu kapsamına alınmıştır.
Bundan böyle bankaların teminat mektuplarını çok büyük ölçüde Kamu İhale Kanununa tabi olarak verecekleri; Devlet İhale Kanununun önemini yitirdiği söylenebilir.
Kamu İhale Kanununa göre, teminat mektuplarını Türkiye’de kurulu bankalar ile yabancı bankaların Türkiye’deki şubeleri verebilirler. Yabancı bankalar ise, Türk bankalarına konrtgaranti vererek teminat mektubu düzenlenmesini isteyebileceklerdir.
Kamu İhale Kanunu Tasarısının 35. maddesinde, teminat mektubu verecek bankaların Resmi Gazetede ilanı, bankalara limit belirleme, limit içi teminat mektubu verme, idarenin tazmin talebini her ne sebeple olursa olsun yerine getirmeyen bankaların mektuplarının bir yıl süre ile kabul edilmemesi gibi hususlar yer almakta iken bu madde bu şekilde yasalaşmamıştır.
Kamu İhale Yasasına göre, tüm bankalar teminat mektubu verebileceklerdir; Devlet İhale Kanunundan farklı olarak herhangi bir limit veya limit içi teminat mektubu söz konusu olmayacak, mektubu tazmin etmeyen bankaların belli bir süre mektuplarının kabul edilmemesi şeklinde bir yaptırım uygulanamayacaktır.
Herhangi bir değişikliğe uğramamış olan Devlet İhale Kanunundan farklı olarak Kamu İhale Kanununa tabi gerek geçici teminat mektupları, gerekse kesin teminat mektupları süreli olacaktır.
Buna karşılık, Devlet İhale Kanunundaki gibi Kamu İhale Kanununa göre de teminat mektupları haczedilemeyecek veya üzerlerine ihtiyati tedbir konulamayacak; bankaların -sosyal sigorta primlerinden ve ücretlerden vergi stopajından- yasal sorumlulukları bulunacaktır.
Euroya dönüşen ulusal paralar üzerinden verilmiş teminat mektupları
12 Avrupa Birliği üyesi devlet, ulusal paralarını 31 Aralık 1998 tarihinde çapraz sabit kur üzerinden Euroye eşitlemiştir -örneğin 1 EU=1.955583 DM-. Ulusal paraların tümü de en geç 30.06.2002’de yürürlükten kaldırılmıştır.
4538 sayılı Euronun Hukuki Araçlara Etkisi Hakkında Kanun (RG 07.02.2000), ulusal para üzerinden düzenlenen sözleşmelerin hukuki sonuçlarını düzenlemiştir. Örneğin;
- Alman Markı üzerinden düzenlenmiş teminat mektubunda/kontrgarantide bankanın yükümlülüğü, teminat mektubundaki Alman Markının 31 Aralık 1998 tarihinde belirlenmiş çapraz serbest kur üzerinden hesaplanacak Euro’dur. Ulusal paranın yerini Euro’nun alması sözleşme taraflarına sözleşmeyi sona erdirme hakkı tanımamaktadır.
- Talep üzerine ödeme yapılmazsa; gecikme faizinin hesaplanmasında Euro faizi gözönünde tutulacaktır.
- Daha önce ulusal paralar üzerinden açılmış davalardaki müddeabih kendiliğinden Euro’ya dönüşecektir.
- Teminat mektubunu yeniden Euro olarak düzenlemeye gerek yoksa da; mektup değiştirilmek istenirse bu değişiklik damga vergisine tabi değildir.
Türk Bankalarının Türk muhataplara yabancı dilde teminat mektubu vermeleri
Bugün de geçerliliğini koruyan 1926 tarihli ve 805 sayılı “İktisadi Müesseselerde Mecburi Türkçe Kullanılması Hakkında Kanun”un 1 inci maddesine göre “Türk tabiiyetindeki her nevi şirket ve müesseseler, Türkiye dahilindeki muamele, mukavele, muhabere, hesap ve defterlerini Türkçe tutmaya mecburdurlar”. Türk tabiiyetindeki şirket tanımına Türkiye’de kurulu bankalar girmekte, şubelerin ayrı tüzel kişilikleri bulunmadığından, yabancı bankaların Türkiye’deki şubeleri 805 sayılı Kanunun kapsamı dışında kalmaktadır.
4. maddeye göre ise birinci fıkraya aykırı olarak düzenlenmiş evrak ve vesaik; bunları düzenleyen şirket ve müesseseler lehine nazarı itibare alınmaz.
Yargıtay 1979 yılında verdiği bir kararda teminat mektubunda İngilizce yer alan “teminat mektubu 15.3.1978 gününü geçmemek üzere yükleme tarihinden bir ay sonuna kadar geçerlidir” ibaresini, 805 sayılı Kanuna göre geçersiz saymış, ancak beynelmilal terim ve tabirlerin işin niteliği ve özelliği gereği ise yabancı dilde yazılabileceğini kabul etmiştir. Böylece banka süresiz bir teminat mektubu verir duruma gelmiştir.
Yüksek Mahkeme 1980 yılında verdiği diğer bir kararda ise, Fransızca belgelendirme ile ilgili kayıtlardan, 805 sayılı Yasanın 4. maddesi gereği davalının yararlanamayacağını kararlaştırmıştır.
Teminat mektupları sözleşme niteliğinde olmalarına rağmen bankalar tarafından düzenlendiğinden ve sadece bankalar yükümlülük altına girdiğinden, özel şartlar dışında tümüyle muhataplar lehine hükümler ihtiva ettiklerinden özellikle 4. madde ve ilgili Yargıtay kararları gözönünde tutulduğunda yabancı dildeki teminat mektuplarının Türk tabiiyetindeki muhatap açısından geçerli olacağı; buna karşılık Türk bankasının yükümlülüğünü sınırlayan vade gibi; teminat mektubunun geçerliliği için akreditif açılması; mektupta sayılan belgelerin ibrazı gibi özel şartların yabancı dilde yazılması halinde mektubu düzenleyen bankanın bu şartlardan yararlanamayacağı, diğer bir deyişle bunları ileri süremeyeceği sonucuna varılabilecektir.
Bu durumda özellikle Türk tabiiyetindeki muhatapların yabancı dilde teminat mektubu verilmesinde ısrar etmeleri halinde, teminat mektubu düzenleyen Türk bankasının, mektubu yabancı dilde düzenlemeye yetkili olduğu, yabancı dildeki mektubun veya mektuptaki şartların geçersiz sayılması halinde dahi; mektubun tazmini halinde rücu hakkının bulunduğu şeklindeki hususların kontrgarantide yer alması uygun olacaktır.
Prof.Dr. Seza Reisoğlu
Trade Finance Glossary
Trade Finance Glossary
AcceptanceThe act of giving a written undertaking on the face of a usance bill of exchangeto pay a stated sum on the maturity date indicated by the drawee of the bill,(usually in exchange for documents of title to goods shipped on D/A terms).Acceptance CreditA documentary credit which requires the beneficiary to draw a usance bill forsubsequent acceptance by the issuing bank or the advising bank or any otherbank as the credit stipulates.Accepting bankThe bank which accepts a bill of exchange drawn on it under a documentarycredit.Accommodation BillIn the context of fraud, a bill drawn without a genuine underlying commercialtransaction.AccounteeAnother name for the applicant/opener of a documentary credit i.e. the importer= the person for whose account the transaction is made.Advice of FateThe Collecting Bank informs the Remitting Bank of non- payment/nonacceptanceor (for D/A bills) of acceptance and the bill maturity date.Advising bankThe bank by which the terms and conditions of the documentary credit areconveyed to the beneficiary. It is usually a bank in the beneficiary’s country.AmendmentAn alteration to the terms and conditions of the documentary credit. Followingthe applicant’s request, the amendment originates from the issuing bank and isadvised to the beneficiary by the advising bank. Irrevocable credits (almost allcredits are irrevocable) cannot be amended unless the beneficiary agrees.ApplicantThe party, usually the importer, who applies to his bank to issue a documentarycredit. Also sometimes referred to as the opener or accountee.AvaliseThe act by a bank in guaranteeing payment of a bill of exchange or promissorynote by endorsing the reverse with the words "good per aval" and signed by thebank, or by the issuance of a separate guarantee.Back-to-Back CreditA credit issued against the security back of another credit (master credit) on theunderstanding that reimbursement will stem from documents eventuallypresented under the first credit (master credit) issued. It follows therefore thateach side of a B/B transaction covers the shipment of the same goods.BeneficiaryThe party to whom a documentary credit is addressed and who will receivepayment under it if he complies with its terms.Bill for CollectionDocument(s) or cheque submitted through a bank for collection of payment fromthe drawee.Bill of ExchangeAn unconditional order in writing, addressed by one person to another, signedby the person giving it, requiring the person to whom it is addressed to pay ondemand or at fixed or determinable future time a sum certain in money to or tothe order of a specified person, or to bearer.It is usually referred to in documentary credits as a draft.Bill of LadingA document demonstrating, among other things, ownership of goods.Bill ReceivableBills which are financed by the receiving branch, whether drawn under a DC ornot, are treated as BRs by both the remitting branch and the receiving branch.Blank EndorsedWhen a bill of lading is made out to order or shipper order and the shipper hassigned on the back of it, it is said to be blank endorsed. The bill of lading thenbecomes a bearer instrument and the holder can present it to the shippingcompany to take delivery of the goods.CarrierPerson or company undertaking, for hire, the conveyance of goods e.g. shippingcompany.Case of NeedAgent nominated by a principal, to whom the collecting bank may refer inspecified circumstances concerning collections.CleanUsed to describe a draft/cheque with no shipping documents (Collectionstransactions), or to describe a bill of lading without clauses that expresslydeclare a defective condition of the goods or the packing.Clean Bill PurchasedA collection bill purchased with no shipping documents.Clean Bill ReceivableBR (Bill Receivable) with no shipping documents. The term is more often usedfor non-trade bills such as travellers cheques.Clean CollectionA draft with no documents attached.Clean Import LoanA loan granted to an importer for payment of import bills, without the Bankhaving any claim to the goods.Collecting BankThe bank, normally in the territory of the drawee/importer, which acts as theagent of the remitting bank in collecting proceeds of a clean or documentary bill.Collected proceeds are remitted back to the remitting bank, for payment to theircustomer.Collection/Collection BasisA general term used in the TS FIM to describe a non-financed non-DC bill.Collection OrderForm submitted, with documents, to the Remitting/Negotiating Bank by anexporter with their instructions.Confirming bankA bank that undertakes on its own responsibility to pay, undertake a deferredpayment obligation, accept or negotiate under a documentary credit issued byanother bank. The confirming bank is usually the advising bank.ConsigneePerson, company or bank to whom goods are addressed.ConsignorAlso known as the shipper, the person or company sending goods.Contingent LiabilityA liability that arises only under specified conditions, e.g. when a bank opens aDC it incurs an obligation to make a future payment on condition that the termsare fully met.DC BillsBills drawn under documentary credits.Deferred Payment CreditA DC which allows the nomination of a bank, or the issuing bank to effectpayment against stipulated documents at a maturity date as specified ordeterminable from the wording of the credit.DemurrageA charge made by a shipping company or a port authority for failure to load orremove goods within the time allowed.DiscountingAct of purchasing an accepted usance bill of exchange at an amount less thanthe face value.DiscrepancyAny deviation from the terms and conditions of a DC, or the documentspresented thereunder, or any inconsistency between the documents themselves.DishonourNon-payment or non-acceptance.Documentary CreditA conditional undertaking by a bank to make payment, often abbreviated tocredit. More precisely, it is a written undertaking by a bank (issuing bank) givento the seller (beneficiary) at the request of the buyer (applicant) to pay a sum ofmoney against presentation of documents complying with the terms of the creditwithin a set time limit.DocumentsThe characteristics and importance of the various documents associated withImport/Export operations are explained and illustrated in Deciding onDocuments.Documents Against AcceptanceInstruction for commercial documents to be released to the drawee onacceptance of the Bill of Exchange.Documents Against PaymentInstruction for documents to be released to the drawee only on payment.Documents of TitleDocuments that give their owner the right to the goods, i.e. Bill of Lading.DraftBill of exchange issued by an exporter and submitted to his bank for collection,or under a DC - usually submitted with attached shipping documents - not to beconfused with a bankers draft which is sometimes used as a vehicle forreimbursement.DraweeParty on whom a bill is drawn and the one to whom presentation is to be madeaccording to the collection order - the importer (NB: for DC bills, the drawee isusually the DC issuing bank).DrawerThe exporter, who draws the Bill of Exchange/draft which in itself is a claim forpayment.Due DateMaturity date for payment.EndorsementSigning (a bill of exchange or bill of lading) on the reverse to transfer title toanother party.Expiry DateLatest date, usually in the country of the beneficiary, on whichnegotiation/payment of a DC can take place.Financed BillsBills sent on collection in which the remitting bank has a financial interest.Foreign Bill PurchasedA bill remitted to a correspondent bank in which the remitting branch isfinancing the exporter.Forward Exchange ContractContract between the Bank and its customer to buy/sell a fixed amount offoreign currency at a future date at a specified rate. This could be for acustomer to make payment under a DC or to sell the proceeds received from anexport negotiation.FreightGoods OR the cost of transporting goods.General AverageLoss which is the result of a sacrifice voluntarily made or an expense incurred;for the sole purpose of saving a ship and its cargo in face of a common danger(e.g. jettison of cargo to lighten a ship in distress). The loss is borneproportionately by ship and cargo owners according to their respective interestsin the voyage.Gross WeightThe weight of the merchandise in its shipping form, i.e. including all itspackaging.HonourTo pay or accept a bill of exchange.Import LicenceA permit issued by the importing country’s authorities in respect of goodssubject to import licensing restrictions.IndemnityAlso known as Letter of Guarantee (L/G), it is an undertaking given in respect ofdiscrepancies in documents presented under a credit. The beneficiary who issuesthe indemnity is primarily liable to repay funds received from the negotiatingbank in settlement under the credit, if the negotiating bank cannot obtainreimbursement from the issuing bank as a result of documents being rejected bythe applicant.Inherent ViceThe propensity of a commodity to self-destruction which gives rise to a highinsurance risk, therefore cover is given only after payment of an additionalpremium (e.g. fruit rots, coal-dust spontaneously ignites).Irrevocable DCConstitutes a definite undertaking of the issuing bank and the confirming bank, ifany, to honour the credit provided the terms of the credit are observed. It maybe advised to the beneficiary without engagement by the advising bank, andcannot be amended or cancelled unless the issuing bank, the confirming bankand the beneficiary agree.Issuing BankThe bank that issues the documentary credit and acts for the applicant (usuallythe importer).Letter of CreditAmerican term for documentary credit. In the United States, the letters DC canoften be confused for documentary collection.Letter of HypothecationA promise to hold goods as security taken from customers who are grantedloans against goods imported on a collection basis.Master CreditIn back-to-back operations, the original export credit against which the secondcredit is issued.MaturityThe date on which a usance bill of exchange becomes due for payment.Negotiable/Non-NegotiableUsually used with regard to Bills of Lading: a negotiable BL is a valid documentof title, while a non-negotiable BL is not - the beneficiary of a DC (the exporter)may send the importer a non-negotiable BL for information.NegotiationThe purchase of a bill of exchange or documents which under the credit termsthe issuing bank has undertaken to pay. Unlike payment, Negotiation is withrecourse to the Drawer/Beneficiary. Unless otherwise indicated the term is usedin its generic sense in this manual to describe any method of settlement, orgiving value under documentary credits.Negotiating BankThe bank which negotiates under a documentary credit. It may be a banknominated by the issuing bank or any other authorised under the credit.Net WeightThe weight of the merchandise before any packaging.Non-DC BillA set of documents with or without a bill of exchange relating to a tradetransaction, not drawn under a DC, financed by a Group Office.Non-Financed BillsBills sent on collection in which the remitting branch has no financial interest.Notify PartyMost contracts involving transport overseas specify a party who is to be advisedof the arrival of the goods. This may be the consignee himself or an agent andhis name and address must appear on the transport document.NotingThe first stage in protest of a dishonoured bill: if instructed to protest for nonpayment/non- acceptance, the collecting bank must send the bill to a notarypublic who will represent it to the drawee on the same day it was refused, or thenext business day. If the drawee still refuses the bill the notary public notes onthe bill: the amount of his charges, the date and his initials. The reason forrefusal is shown on a note attached to the bill. The bill is then protested.OpenerSee Applicant.Opening BankSee Issuing Bank.Order (To)The phrase To Order is sometimes shown on Bills of Lading against consignee:this means that the Bill of Lading must be endorsed in blank by the shipper (i.e.not to any particular named party which makes it bearer document and itbecomes transferable by delivery).Packing CreditA loan given to the beneficiary by the bank to enable him to purchase rawmaterials. The beneficiary is usually requested to deposit the DC with the bankas security.Past DueBill or loan that has not been paid on the maturity date/due date.Paying BankThe bank which is to pay the proceeds under a payment DC. It can be theissuing bank itself or a bank nominated by it, usually the advising/confirmingbank.Perils of the SeasThey are accidents or casualties of the sea. The ordinary actions of the windsand waves are not included. Heavy or tempestuous weather on a voyage is ofsufficient violence to constitute a peril of the sea.Power of AttorneyAuthority given to one party to act for another.PresentationAct of requesting the importer’s payment/acceptance of an import bill.Presenting BankThe bank that requests payment of a collection bill - may be the Collecting Bankor its nominated branch or local correspondent, which is better placed to contactthe importer.PrincipalThe exporter in collection transactions, being the initiator of the transaction,whose instructions are followed at all stages (may be used to refer to anycustomer who initiates a transaction e.g. the issuer of a DC).Promissory NoteA signed statement containing a written promise to pay a stated sum tospecified person at a specified date or on demand.ProtestThe formal representation of a dishonoured bill of exchange: the bill is presentedby a notary public to the drawee - if refused again, it is noted” - see noting. Thenotary public then issues a formal protest, an official certificate that the bill hasbeen refused: the drawer can use this certificate to sue the drawee in court.PurchaseUnless otherwise indicated the term is used in its generic sense to describe theprocess where an export department advances the proceeds of a non-DC bill toa customer.RecourseThe right to claim back a payment made.Red Clause CreditA credit with a clause which authorises the advising bank to make an advancepayment to the beneficiary.Reimbursing BankThe bank nominated by the DC issuing bank that will pay the value of the DC tothe negotiating/paying bank.Remitting BankThe bank that acts on behalf of the drawer/exporter in handling documentsunder DC or non-DC bills. It sends documents to a receiving or collecting bankfor payment by the importer.RetirementThe act of paying or settling an outstanding bill or import loan; i.e. payment bythe importer to the Bank.Revocable DCA documentary credit which may be amended or cancelled at any time withoutprior notice to the beneficiary.Revolving CreditA credit automatically reinstated after each drawing or upon receipt ofauthorisation from the DC issuing bank, with limits as to the duration of thefacility and as to the (cumulative or non-cumulative) amount involved for eachdrawing.ScheduleThe Remitting/Negotiating Bank's letter covering a bill sent to theCollecting/Issuing Bank, which lists the documents attached and gives collectionand/or payment instructions.Self-LiquidatingA transaction is said to be self-liquidating when there is a known source of fundsavailable for its settlement on due date.SettlementPayment, acceptance or negotiation under a documentary credit. Seenegotiation.Shipment DateThe date inserted on the bills of lading evidencing goods received on board isregarded for documentary credit purposes as being the date of shipment.ShipperSee ConsignorShipping GuaranteeGuarantees of this nature are required to enable customers to obtain goodsbefore the arrival of the documents of title, and are issued to the shippingcompanies by the Bank against an undertaking to forward the bills of ladingwhen they are received. The Bank normally take 100% cash margin against thevalue of the goods if the customer does not have T/R facility.SightUnder a sight documentary credit a Group Office should effect settlementimmediately if it is satisfied with the documents presented (unless the terms ofthe sight credit are in some way modified by its contents). Banks are allowed areasonable time to check documents.SnagsIrregular bills; import and export.Status ReportProduced by a bank's TCI department or a credit information bureau, givingdetails of the creditworthiness and business background of traders andmanufacturers.SubstitutionThe act whereby the prime beneficiary substitutes his own documents i.e.invoices and drafts, in back-to-back and transferable credit operations prior tonegotiation of the master credits.TenorThe period of time that must pass before a bill of exchange or promissory notebecomes due for payment. The date must be determinable from the face of thebill or note.TermsStipulates the conditions of the documentary credit, the method for the dispatchof the goods, the basis on which the payment amount is fixed (e.g. FOB, CIF),and the documents required under the credit.Trade and Credit InformationA bank department that prepares and distributes status reports on its owncustomers, and maintains records of traders and manufacturers with whom itscustomers deal.Transferable CreditPermits the beneficiary to transfer all or some of the rights and obligations underthe credit to a second beneficiary or beneficiaries.TransfereeA party (2nd beneficiary) to whom a transferable credit is transferred in whole orin part.TransferorA party (1st beneficiary) at whose request a transferable credit is transferred toa second beneficiary in whole or in part.Transport DocumentsFormerly and still usually referred to as shipping documents, the documentswhich demonstrate that goods have been dispatched from one place to another.UsanceIn contrast to a sight credit, a usance credit is one where the bill (or draft) isintended to be payable at a date later than that of the presentation ofdocuments (See Tenor).WaiveTo relinquish a right: used in collections, with BC charges and/or interest to becollected from the drawee. These can be waived in certain circumstances as setout in URC 522.
AcceptanceThe act of giving a written undertaking on the face of a usance bill of exchangeto pay a stated sum on the maturity date indicated by the drawee of the bill,(usually in exchange for documents of title to goods shipped on D/A terms).Acceptance CreditA documentary credit which requires the beneficiary to draw a usance bill forsubsequent acceptance by the issuing bank or the advising bank or any otherbank as the credit stipulates.Accepting bankThe bank which accepts a bill of exchange drawn on it under a documentarycredit.Accommodation BillIn the context of fraud, a bill drawn without a genuine underlying commercialtransaction.AccounteeAnother name for the applicant/opener of a documentary credit i.e. the importer= the person for whose account the transaction is made.Advice of FateThe Collecting Bank informs the Remitting Bank of non- payment/nonacceptanceor (for D/A bills) of acceptance and the bill maturity date.Advising bankThe bank by which the terms and conditions of the documentary credit areconveyed to the beneficiary. It is usually a bank in the beneficiary’s country.AmendmentAn alteration to the terms and conditions of the documentary credit. Followingthe applicant’s request, the amendment originates from the issuing bank and isadvised to the beneficiary by the advising bank. Irrevocable credits (almost allcredits are irrevocable) cannot be amended unless the beneficiary agrees.ApplicantThe party, usually the importer, who applies to his bank to issue a documentarycredit. Also sometimes referred to as the opener or accountee.AvaliseThe act by a bank in guaranteeing payment of a bill of exchange or promissorynote by endorsing the reverse with the words "good per aval" and signed by thebank, or by the issuance of a separate guarantee.Back-to-Back CreditA credit issued against the security back of another credit (master credit) on theunderstanding that reimbursement will stem from documents eventuallypresented under the first credit (master credit) issued. It follows therefore thateach side of a B/B transaction covers the shipment of the same goods.BeneficiaryThe party to whom a documentary credit is addressed and who will receivepayment under it if he complies with its terms.Bill for CollectionDocument(s) or cheque submitted through a bank for collection of payment fromthe drawee.Bill of ExchangeAn unconditional order in writing, addressed by one person to another, signedby the person giving it, requiring the person to whom it is addressed to pay ondemand or at fixed or determinable future time a sum certain in money to or tothe order of a specified person, or to bearer.It is usually referred to in documentary credits as a draft.Bill of LadingA document demonstrating, among other things, ownership of goods.Bill ReceivableBills which are financed by the receiving branch, whether drawn under a DC ornot, are treated as BRs by both the remitting branch and the receiving branch.Blank EndorsedWhen a bill of lading is made out to order or shipper order and the shipper hassigned on the back of it, it is said to be blank endorsed. The bill of lading thenbecomes a bearer instrument and the holder can present it to the shippingcompany to take delivery of the goods.CarrierPerson or company undertaking, for hire, the conveyance of goods e.g. shippingcompany.Case of NeedAgent nominated by a principal, to whom the collecting bank may refer inspecified circumstances concerning collections.CleanUsed to describe a draft/cheque with no shipping documents (Collectionstransactions), or to describe a bill of lading without clauses that expresslydeclare a defective condition of the goods or the packing.Clean Bill PurchasedA collection bill purchased with no shipping documents.Clean Bill ReceivableBR (Bill Receivable) with no shipping documents. The term is more often usedfor non-trade bills such as travellers cheques.Clean CollectionA draft with no documents attached.Clean Import LoanA loan granted to an importer for payment of import bills, without the Bankhaving any claim to the goods.Collecting BankThe bank, normally in the territory of the drawee/importer, which acts as theagent of the remitting bank in collecting proceeds of a clean or documentary bill.Collected proceeds are remitted back to the remitting bank, for payment to theircustomer.Collection/Collection BasisA general term used in the TS FIM to describe a non-financed non-DC bill.Collection OrderForm submitted, with documents, to the Remitting/Negotiating Bank by anexporter with their instructions.Confirming bankA bank that undertakes on its own responsibility to pay, undertake a deferredpayment obligation, accept or negotiate under a documentary credit issued byanother bank. The confirming bank is usually the advising bank.ConsigneePerson, company or bank to whom goods are addressed.ConsignorAlso known as the shipper, the person or company sending goods.Contingent LiabilityA liability that arises only under specified conditions, e.g. when a bank opens aDC it incurs an obligation to make a future payment on condition that the termsare fully met.DC BillsBills drawn under documentary credits.Deferred Payment CreditA DC which allows the nomination of a bank, or the issuing bank to effectpayment against stipulated documents at a maturity date as specified ordeterminable from the wording of the credit.DemurrageA charge made by a shipping company or a port authority for failure to load orremove goods within the time allowed.DiscountingAct of purchasing an accepted usance bill of exchange at an amount less thanthe face value.DiscrepancyAny deviation from the terms and conditions of a DC, or the documentspresented thereunder, or any inconsistency between the documents themselves.DishonourNon-payment or non-acceptance.Documentary CreditA conditional undertaking by a bank to make payment, often abbreviated tocredit. More precisely, it is a written undertaking by a bank (issuing bank) givento the seller (beneficiary) at the request of the buyer (applicant) to pay a sum ofmoney against presentation of documents complying with the terms of the creditwithin a set time limit.DocumentsThe characteristics and importance of the various documents associated withImport/Export operations are explained and illustrated in Deciding onDocuments.Documents Against AcceptanceInstruction for commercial documents to be released to the drawee onacceptance of the Bill of Exchange.Documents Against PaymentInstruction for documents to be released to the drawee only on payment.Documents of TitleDocuments that give their owner the right to the goods, i.e. Bill of Lading.DraftBill of exchange issued by an exporter and submitted to his bank for collection,or under a DC - usually submitted with attached shipping documents - not to beconfused with a bankers draft which is sometimes used as a vehicle forreimbursement.DraweeParty on whom a bill is drawn and the one to whom presentation is to be madeaccording to the collection order - the importer (NB: for DC bills, the drawee isusually the DC issuing bank).DrawerThe exporter, who draws the Bill of Exchange/draft which in itself is a claim forpayment.Due DateMaturity date for payment.EndorsementSigning (a bill of exchange or bill of lading) on the reverse to transfer title toanother party.Expiry DateLatest date, usually in the country of the beneficiary, on whichnegotiation/payment of a DC can take place.Financed BillsBills sent on collection in which the remitting bank has a financial interest.Foreign Bill PurchasedA bill remitted to a correspondent bank in which the remitting branch isfinancing the exporter.Forward Exchange ContractContract between the Bank and its customer to buy/sell a fixed amount offoreign currency at a future date at a specified rate. This could be for acustomer to make payment under a DC or to sell the proceeds received from anexport negotiation.FreightGoods OR the cost of transporting goods.General AverageLoss which is the result of a sacrifice voluntarily made or an expense incurred;for the sole purpose of saving a ship and its cargo in face of a common danger(e.g. jettison of cargo to lighten a ship in distress). The loss is borneproportionately by ship and cargo owners according to their respective interestsin the voyage.Gross WeightThe weight of the merchandise in its shipping form, i.e. including all itspackaging.HonourTo pay or accept a bill of exchange.Import LicenceA permit issued by the importing country’s authorities in respect of goodssubject to import licensing restrictions.IndemnityAlso known as Letter of Guarantee (L/G), it is an undertaking given in respect ofdiscrepancies in documents presented under a credit. The beneficiary who issuesthe indemnity is primarily liable to repay funds received from the negotiatingbank in settlement under the credit, if the negotiating bank cannot obtainreimbursement from the issuing bank as a result of documents being rejected bythe applicant.Inherent ViceThe propensity of a commodity to self-destruction which gives rise to a highinsurance risk, therefore cover is given only after payment of an additionalpremium (e.g. fruit rots, coal-dust spontaneously ignites).Irrevocable DCConstitutes a definite undertaking of the issuing bank and the confirming bank, ifany, to honour the credit provided the terms of the credit are observed. It maybe advised to the beneficiary without engagement by the advising bank, andcannot be amended or cancelled unless the issuing bank, the confirming bankand the beneficiary agree.Issuing BankThe bank that issues the documentary credit and acts for the applicant (usuallythe importer).Letter of CreditAmerican term for documentary credit. In the United States, the letters DC canoften be confused for documentary collection.Letter of HypothecationA promise to hold goods as security taken from customers who are grantedloans against goods imported on a collection basis.Master CreditIn back-to-back operations, the original export credit against which the secondcredit is issued.MaturityThe date on which a usance bill of exchange becomes due for payment.Negotiable/Non-NegotiableUsually used with regard to Bills of Lading: a negotiable BL is a valid documentof title, while a non-negotiable BL is not - the beneficiary of a DC (the exporter)may send the importer a non-negotiable BL for information.NegotiationThe purchase of a bill of exchange or documents which under the credit termsthe issuing bank has undertaken to pay. Unlike payment, Negotiation is withrecourse to the Drawer/Beneficiary. Unless otherwise indicated the term is usedin its generic sense in this manual to describe any method of settlement, orgiving value under documentary credits.Negotiating BankThe bank which negotiates under a documentary credit. It may be a banknominated by the issuing bank or any other authorised under the credit.Net WeightThe weight of the merchandise before any packaging.Non-DC BillA set of documents with or without a bill of exchange relating to a tradetransaction, not drawn under a DC, financed by a Group Office.Non-Financed BillsBills sent on collection in which the remitting branch has no financial interest.Notify PartyMost contracts involving transport overseas specify a party who is to be advisedof the arrival of the goods. This may be the consignee himself or an agent andhis name and address must appear on the transport document.NotingThe first stage in protest of a dishonoured bill: if instructed to protest for nonpayment/non- acceptance, the collecting bank must send the bill to a notarypublic who will represent it to the drawee on the same day it was refused, or thenext business day. If the drawee still refuses the bill the notary public notes onthe bill: the amount of his charges, the date and his initials. The reason forrefusal is shown on a note attached to the bill. The bill is then protested.OpenerSee Applicant.Opening BankSee Issuing Bank.Order (To)The phrase To Order is sometimes shown on Bills of Lading against consignee:this means that the Bill of Lading must be endorsed in blank by the shipper (i.e.not to any particular named party which makes it bearer document and itbecomes transferable by delivery).Packing CreditA loan given to the beneficiary by the bank to enable him to purchase rawmaterials. The beneficiary is usually requested to deposit the DC with the bankas security.Past DueBill or loan that has not been paid on the maturity date/due date.Paying BankThe bank which is to pay the proceeds under a payment DC. It can be theissuing bank itself or a bank nominated by it, usually the advising/confirmingbank.Perils of the SeasThey are accidents or casualties of the sea. The ordinary actions of the windsand waves are not included. Heavy or tempestuous weather on a voyage is ofsufficient violence to constitute a peril of the sea.Power of AttorneyAuthority given to one party to act for another.PresentationAct of requesting the importer’s payment/acceptance of an import bill.Presenting BankThe bank that requests payment of a collection bill - may be the Collecting Bankor its nominated branch or local correspondent, which is better placed to contactthe importer.PrincipalThe exporter in collection transactions, being the initiator of the transaction,whose instructions are followed at all stages (may be used to refer to anycustomer who initiates a transaction e.g. the issuer of a DC).Promissory NoteA signed statement containing a written promise to pay a stated sum tospecified person at a specified date or on demand.ProtestThe formal representation of a dishonoured bill of exchange: the bill is presentedby a notary public to the drawee - if refused again, it is noted” - see noting. Thenotary public then issues a formal protest, an official certificate that the bill hasbeen refused: the drawer can use this certificate to sue the drawee in court.PurchaseUnless otherwise indicated the term is used in its generic sense to describe theprocess where an export department advances the proceeds of a non-DC bill toa customer.RecourseThe right to claim back a payment made.Red Clause CreditA credit with a clause which authorises the advising bank to make an advancepayment to the beneficiary.Reimbursing BankThe bank nominated by the DC issuing bank that will pay the value of the DC tothe negotiating/paying bank.Remitting BankThe bank that acts on behalf of the drawer/exporter in handling documentsunder DC or non-DC bills. It sends documents to a receiving or collecting bankfor payment by the importer.RetirementThe act of paying or settling an outstanding bill or import loan; i.e. payment bythe importer to the Bank.Revocable DCA documentary credit which may be amended or cancelled at any time withoutprior notice to the beneficiary.Revolving CreditA credit automatically reinstated after each drawing or upon receipt ofauthorisation from the DC issuing bank, with limits as to the duration of thefacility and as to the (cumulative or non-cumulative) amount involved for eachdrawing.ScheduleThe Remitting/Negotiating Bank's letter covering a bill sent to theCollecting/Issuing Bank, which lists the documents attached and gives collectionand/or payment instructions.Self-LiquidatingA transaction is said to be self-liquidating when there is a known source of fundsavailable for its settlement on due date.SettlementPayment, acceptance or negotiation under a documentary credit. Seenegotiation.Shipment DateThe date inserted on the bills of lading evidencing goods received on board isregarded for documentary credit purposes as being the date of shipment.ShipperSee ConsignorShipping GuaranteeGuarantees of this nature are required to enable customers to obtain goodsbefore the arrival of the documents of title, and are issued to the shippingcompanies by the Bank against an undertaking to forward the bills of ladingwhen they are received. The Bank normally take 100% cash margin against thevalue of the goods if the customer does not have T/R facility.SightUnder a sight documentary credit a Group Office should effect settlementimmediately if it is satisfied with the documents presented (unless the terms ofthe sight credit are in some way modified by its contents). Banks are allowed areasonable time to check documents.SnagsIrregular bills; import and export.Status ReportProduced by a bank's TCI department or a credit information bureau, givingdetails of the creditworthiness and business background of traders andmanufacturers.SubstitutionThe act whereby the prime beneficiary substitutes his own documents i.e.invoices and drafts, in back-to-back and transferable credit operations prior tonegotiation of the master credits.TenorThe period of time that must pass before a bill of exchange or promissory notebecomes due for payment. The date must be determinable from the face of thebill or note.TermsStipulates the conditions of the documentary credit, the method for the dispatchof the goods, the basis on which the payment amount is fixed (e.g. FOB, CIF),and the documents required under the credit.Trade and Credit InformationA bank department that prepares and distributes status reports on its owncustomers, and maintains records of traders and manufacturers with whom itscustomers deal.Transferable CreditPermits the beneficiary to transfer all or some of the rights and obligations underthe credit to a second beneficiary or beneficiaries.TransfereeA party (2nd beneficiary) to whom a transferable credit is transferred in whole orin part.TransferorA party (1st beneficiary) at whose request a transferable credit is transferred toa second beneficiary in whole or in part.Transport DocumentsFormerly and still usually referred to as shipping documents, the documentswhich demonstrate that goods have been dispatched from one place to another.UsanceIn contrast to a sight credit, a usance credit is one where the bill (or draft) isintended to be payable at a date later than that of the presentation ofdocuments (See Tenor).WaiveTo relinquish a right: used in collections, with BC charges and/or interest to becollected from the drawee. These can be waived in certain circumstances as setout in URC 522.
19 Nisan 2007 Perşembe
Incoterms 2000
http://www.iccwbo.org/incoterms/faq.asp
http://www.sy-nett.no/html/inco2000.htm
Why Incoterms?
Incoterms are international rules that are accepted by governments, legal authorities and practitioners worldwide for the interpretation of the most commonly used terms in international trade. They either reduce or remove altogether uncertainties arising from differing interpretations of such terms in different countries.
What do they cover?
The scope of Incoterms is limited to matters relating to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold, but excluding "intangibles" like computer software.
Incoterm series
Incoterm 2000 are divided into four series, E, F, C and D, denoted by the first letter in the three-letter abbreviation.
Under the "E"-term (EXW), the seller only makes the goods available to the buyer at the seller's own premises. It is the only one of that category.
Under the "F"-terms (FCA, FAS and FOB), the seller is called upon to deliver the goods to a carrier appointed by the buyer.
Under the "C"-terms (CFR, CIF, CPT and CIP), the seller has to contract for carriage, but without assuming the risk of loss or damage to the goods or additional costs due to events occurring after shipment or dispatch.
Under the "D"-terms (DAF, DES, DEQ, DDU and DDP), the seller has to bear all costs and risks needed to bring the goods to the place of destination.
What are the 13 Incoterms?
Each Incoterm is referred to by a three-letter abbreviation. Here is a complete list: EXW, FCA, FAS, FOB, CFR, CPT, CFR, CIF, DAF, DES, DEQ, DDU, DDP.
EXW
(Ex Works) (… named place) - represents the minimum involvement of the seller and the maximum involvement of the buyer in the movement of the goods from the point of 'works'. Risk and responsibility pass from the seller to the buyer when the cargo is made available on the ground at the 'works', at or on the agreed future date or future time, uncleared through customs.
FCA
(Free Carrier) (… named place) requires the seller to take responsibility for risks and costs up to the handover to the carrier, including export customs clearance.
FAS
(Free Alongside Ship) (… named port of shipment) is Monomodal in that it may only be used for transaction where the main carriage is by seafreight. Under this term, risk and responsibility pass from the seller to the buyer when the goods are placed alongside a named ship (or a ship operated by a named service) at a named area within a named port. FAS requires the seller to arrange export customs clearing.
FOB
(Free On Board) (… named port of shipment) is one of the commoner trade terms in use. In defining FOB as an INCOTERM, it is expressed as being Monomodal and it can only be used for transactions where seafreight is the main carriage. Under INCOTERMS 2000, risk and responsibility pass from the seller to the buyer when the goods pass over the (named or unnamed) ship's rail at the (named) port of loading, cleared for export by the seller.
CFR/CIF
(Cost and Freight, Cost, Insurance and Freight) (… named port of destination)
Terms beginning 'C' are 'Contracts of Dispatch'. They differ from other INCOTERMS as they segregate the point at which risk and responsibility passes from the point at which costs pass. Under all other terms, the point of transferring risk and the point at which responsibility for cost is also transferred are simultaneous. With the 'C' terms this is NOT the case.
CFR (Cost and Freight) – risk passes from the seller to the buyer when the cargo crosses the ship's rail at the origin port. However, the responsibilities for the costs of transit only pass from the seller to the buyer at the destination port. CFR and CIF are Monomodal expressions used when the main carriage is by sea and both are suited to the use of Bills of Lading.
CIF (Cost, Insurance and Freight) represents the condition of CFR with the addition of Insurance. This is the first of only two terms that place a compulsory responsibility for insurance on the seller. Under all other terms, the buyer considers insurance as an optional responsibility. (Refer CIP)
CPT/CIP
(Carriage Paid To, Carriage and Insurance Paid To) (… named place of destination)
CPT (Carriage Paid To) is the multimodal equivalent of CFR. The named place where the seller's costs end can be a point other than a seaport (as well as being a seaport), in the buyer's country.
CPT may be used for airfreight, roadfreight and railfreight as well as for seafreight when the ship's rail serves no purpose. E.g. if the destination is an inland point or a modern port with conditions as discussed under FOB.
Under CPT, risk and responsibility passes when the cargo is handed to the first carrier.
However, responsibility for costs only transfer when the goods arrive at the stated place where carriage is 'paid to'. CIP (Carriage & Insurance Paid to) represents CPT with the inclusion of Insurance.
DES/DEQ
(Delivered Ex Ship, Delivered Ex Quay) (… named port of destination)
Terms prefixed 'D' are 'Contracts of Arrival' involving the passing of risk and responsibility at the point where costs also terminate. DES (Delivered Ex Ship) is Monomodal. Although not triggered by the use of the ship's rail, the point of handover (ship's side, arrived) will be inappropriate in a modern port. From the seller's perspective, DES reverses the risk advantages of CFR, placing all risks with the seller until the cargo arrives at the named port.
DEQ (Delivered Ex Quay) extends the shipper's responsibility beyond the arrival of the vessel to the point where the goods are discharged.
DDU
(Delivered Duty Unpaid) (… named place of destination) excludes the payment of domestic duties and the clearance charges associated with the import process at destination.
DDP
(Delivered Duty Paid) (… named place of destination) is a Multimodal term that must be qualified by naming the place to which the seller is taking responsibility for transport costs and the risks of transit. These risks and costs include the payment of domestic duties in the buyer's country and any charges associated with the import clearing process at destination.
DAF
(Delivered At Frontier) (… named place) is a monomodal (land) expression which should be further qualified by naming the frontier (border post) up to which the seller is prepared to take responsibility for transport costs and the corresponding risks of transit. The seller must clear the cargo through customs on the export side of the border of handover, whereas the buyer must clear the goods through customs on the import side.
What does it take to use Incoterms correctly?
ICC recommends that "Incoterms 2000" be referred to specifically whenever the terms are used, together with a location. For example, the term "Delivered at Frontier (DAF)" should always be accompanied by a reference to an exact place and the frontier to which delivery is to be made. To prevent misunderstandings, variations of the three-letter Incoterms should be strictly avoided.
Here are three examples of correct use of Incoterms:FCA Kuala Lumpur Incoterms 2000FOB Liverpool Incoterms 2000DDU Frankfurt Schmidt GmbH Warehouse 4 Incoterms 2000
INCOTERMS CHART
The following chart summarizes the responsibilities of both the buyer and seller for each of the current 13 INCOTERMS (http://www.i-b-t.net/incoterms.html).
EXW
FCA
FAS
FOB
CFR
CIF
CPT
CIP
DAF
DES
DEQ
DDU
DDP
SERVICES
Ex Works
Free Carrier
Free Alongside Ship
Free Onboard Vessel
Cost & Freight
Cost Insurance & Freight
Carriage Paid To
Carriage Insurance Paid To
Delivered At Frontier
Delivered Ex Ship
Delivered Ex Quay Duty Unpaid
Delivered Duty Unpaid
Delivered Duty Paid
Warehouse Storage
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Warehouse Labor
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Export Packing
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Loading Charges
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Inland Freight
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Terminal Charges
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Forwarder's Fees
Buyer
Buyer
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Loading On Vessel
Buyer
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Ocean/Air Freight
Buyer
Buyer
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Charges On Arrival At Destination
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Seller
Seller
Buyer
Buyer
Seller
Seller
Seller
Duty, Taxes & Customs Clearance
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Seller
Delivery To Destination
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Seller
Seller
INCOTERMS QUIZ
(http://www.exportimportlaw.com/quizzes/incotermsquiz.html)
1. Incoterms 2000
a) are internationally recognized commercial shipping terms
b) are ocean navigational vectors derived from the Inca Empire of the Andes
c) are federally-mandated insurance premiums and conditions on export transaction
d) dictate the type of ink and formatting used in international shipping contracts
2. Incoterms 2000 were written
a) under the United Nations Convention for the International Sale of Goods (Vienna Convention)
b) by the International Chamber of Commerce
c) under the Kyoto Protocols as adopted in 2000
d) under “fast track” authority granted by the U.S. Congress
3. Incoterms 2000 apply
a) to all international shipments of goods
b) to International shipments beyond a certain tonnage
c) to international shipments under the Uniform Commercial Code
d) only if clearly incorporated into the contract of sale
4. To apply to the transaction, Incoterms 2000 must be incorporated into
a) contract of carriage
b) negotiable bill of lading
c) sales contract
d) the Shippers Export Declaration or AES form
5. Incoterms 2000 address
a) Ownership rights
b) Breaches of contract
c) The risks of loss between the parties
d) Type of ship used
6. Incoterms 2000
a) Can only be used for international purchases
b) Can only be used for purchases within the same country
c) Can only be used for purchases across the ocean
d) Can be used for both domestic and international purchases
7. How many terms are in Incoterms 2000?
a) 5
b) 13
c) 2,000
d) the number is limited only by the parties’ cargo needs
8. If the Seller wants to minimize its costs/risks, what series of Incoterms 2000 will the Seller use?
a) “E” series
b) “F” series
c) “C” series
d) “D” series
9. Under which series of Incoterms 2000 is the Seller’s cost/risk the greatest?
a) “E” series
b) “F” series
c) “C” series
d) “D” series
10. Which terms are limited to shipments via maritime or inland waterway?
a) EXW, FAS, and FOB
b) FCA, CPT, and CIP
c) DAF, DDU, and DDP
d) FAS, FOB, and CIF
11. The following Incoterms 2000 are allowed regardless of the mode of transportation
a) EXW, FCA, and FAS
b) FCA, CPT, and CIP
c) EXW, FAS, and FOB
d) EXW, FCA, and DES
12. When goods are shipped "CIF", which party is responsible for the freight charges?
a) Buyer
b) Seller
c) Both
d) Neither
13. "FOB" is only appropriate when goods are shipped via
a) Truck
b) Rail
c) Ship
d) Air
14. Which Incoterms can be used to transfer title to goods at the port of export
a) EXW
b) FCA
c) FOB
d) None of the above
15. When goods are shipped "DDP”, who is responsible for Customs clearance?
a) Buyer
b) Seller
c) Both
d) Neither
16. "FOB" stands for
a) First On Board
b) Free On Boat
c) Free On Board
d) First Off Barge
17. In "DEQ," or "Delivered Ex Quay," what is a quay?
a) Dock
b) Vessel
c) Crane
d) Inter-modal transport
18. Which modes of transport are proper for goods shipped "DDP"?
a) Truck/Rail
b) Ship
c) Air
d) All of the above
INCOTERMS 2000 – REVISION
1. What are the Incoterms 2000?
2. In how many series are they classified? Which?
3. Under which term does the seller have to cover only warehouse storage, warehouse labour and export packing?
4. Under which term is the seller free of all obligations after he has given the goods to the carrier named by the buyer?
5. Under which term is the seller required to bear all costs and risks to bring the goods to the country of destination?
6. As a result, which group represents the most and which obligations for the seller/buyer?
7. Which Incoterms can only be used for sea and inland waterway transport?
8. In the sentence “Our prices are CIF Koper”, what does Koper refer to?
9. In the sentence, “Our prices are EXW Koper”, what does Koper refer to?
INCOTERMS QUIZ - keys
(http://www.exportimportlaw.com/quizzes/incotermsquiz.html)
1. Incoterms 2000 (a) are internationally recognized commercial shipping terms
2. Incoterms 2000 were written (b) by the International Chamber of Commerce
3. Incoterms apply (d) only if clearly incorporated into the contract of sale
4. To apply to the transaction, Incoterms 2000 must be incorporated into (c) the sales contract
5. Incoterms 2000 address (c) the risks of loss between the parties
6. Incoterms 2000 (d) can be used for both domestic and international purchases.
7. How many terms are in Incoterms 2000? (b) 13
8. (a) "E" Series
9. (d) "D" Series
10. (d) FAS, FOB, and CIF
11. (b) FCA, CPT, and CIP (also EXW, DAF, DDU, and DDP)
12. (b) the seller
14. "FOB" is only appropriate when goods are shipped via (c) ship
15. (b) the Seller agrees to clear goods for import and pay any duty
16. "FOB" stands for (c) “Free on Board”
17. (a) Dock
18. (d) All of the above (You can use EXW, FCA, CPT, CIP, DAF, DDU, or DDP for any mode of transport).
http://www.iccwbo.org/incoterms/faq.asp
http://www.sy-nett.no/html/inco2000.htm
Why Incoterms?
Incoterms are international rules that are accepted by governments, legal authorities and practitioners worldwide for the interpretation of the most commonly used terms in international trade. They either reduce or remove altogether uncertainties arising from differing interpretations of such terms in different countries.
What do they cover?
The scope of Incoterms is limited to matters relating to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold, but excluding "intangibles" like computer software.
Incoterm series
Incoterm 2000 are divided into four series, E, F, C and D, denoted by the first letter in the three-letter abbreviation.
Under the "E"-term (EXW), the seller only makes the goods available to the buyer at the seller's own premises. It is the only one of that category.
Under the "F"-terms (FCA, FAS and FOB), the seller is called upon to deliver the goods to a carrier appointed by the buyer.
Under the "C"-terms (CFR, CIF, CPT and CIP), the seller has to contract for carriage, but without assuming the risk of loss or damage to the goods or additional costs due to events occurring after shipment or dispatch.
Under the "D"-terms (DAF, DES, DEQ, DDU and DDP), the seller has to bear all costs and risks needed to bring the goods to the place of destination.
What are the 13 Incoterms?
Each Incoterm is referred to by a three-letter abbreviation. Here is a complete list: EXW, FCA, FAS, FOB, CFR, CPT, CFR, CIF, DAF, DES, DEQ, DDU, DDP.
EXW
(Ex Works) (… named place) - represents the minimum involvement of the seller and the maximum involvement of the buyer in the movement of the goods from the point of 'works'. Risk and responsibility pass from the seller to the buyer when the cargo is made available on the ground at the 'works', at or on the agreed future date or future time, uncleared through customs.
FCA
(Free Carrier) (… named place) requires the seller to take responsibility for risks and costs up to the handover to the carrier, including export customs clearance.
FAS
(Free Alongside Ship) (… named port of shipment) is Monomodal in that it may only be used for transaction where the main carriage is by seafreight. Under this term, risk and responsibility pass from the seller to the buyer when the goods are placed alongside a named ship (or a ship operated by a named service) at a named area within a named port. FAS requires the seller to arrange export customs clearing.
FOB
(Free On Board) (… named port of shipment) is one of the commoner trade terms in use. In defining FOB as an INCOTERM, it is expressed as being Monomodal and it can only be used for transactions where seafreight is the main carriage. Under INCOTERMS 2000, risk and responsibility pass from the seller to the buyer when the goods pass over the (named or unnamed) ship's rail at the (named) port of loading, cleared for export by the seller.
CFR/CIF
(Cost and Freight, Cost, Insurance and Freight) (… named port of destination)
Terms beginning 'C' are 'Contracts of Dispatch'. They differ from other INCOTERMS as they segregate the point at which risk and responsibility passes from the point at which costs pass. Under all other terms, the point of transferring risk and the point at which responsibility for cost is also transferred are simultaneous. With the 'C' terms this is NOT the case.
CFR (Cost and Freight) – risk passes from the seller to the buyer when the cargo crosses the ship's rail at the origin port. However, the responsibilities for the costs of transit only pass from the seller to the buyer at the destination port. CFR and CIF are Monomodal expressions used when the main carriage is by sea and both are suited to the use of Bills of Lading.
CIF (Cost, Insurance and Freight) represents the condition of CFR with the addition of Insurance. This is the first of only two terms that place a compulsory responsibility for insurance on the seller. Under all other terms, the buyer considers insurance as an optional responsibility. (Refer CIP)
CPT/CIP
(Carriage Paid To, Carriage and Insurance Paid To) (… named place of destination)
CPT (Carriage Paid To) is the multimodal equivalent of CFR. The named place where the seller's costs end can be a point other than a seaport (as well as being a seaport), in the buyer's country.
CPT may be used for airfreight, roadfreight and railfreight as well as for seafreight when the ship's rail serves no purpose. E.g. if the destination is an inland point or a modern port with conditions as discussed under FOB.
Under CPT, risk and responsibility passes when the cargo is handed to the first carrier.
However, responsibility for costs only transfer when the goods arrive at the stated place where carriage is 'paid to'. CIP (Carriage & Insurance Paid to) represents CPT with the inclusion of Insurance.
DES/DEQ
(Delivered Ex Ship, Delivered Ex Quay) (… named port of destination)
Terms prefixed 'D' are 'Contracts of Arrival' involving the passing of risk and responsibility at the point where costs also terminate. DES (Delivered Ex Ship) is Monomodal. Although not triggered by the use of the ship's rail, the point of handover (ship's side, arrived) will be inappropriate in a modern port. From the seller's perspective, DES reverses the risk advantages of CFR, placing all risks with the seller until the cargo arrives at the named port.
DEQ (Delivered Ex Quay) extends the shipper's responsibility beyond the arrival of the vessel to the point where the goods are discharged.
DDU
(Delivered Duty Unpaid) (… named place of destination) excludes the payment of domestic duties and the clearance charges associated with the import process at destination.
DDP
(Delivered Duty Paid) (… named place of destination) is a Multimodal term that must be qualified by naming the place to which the seller is taking responsibility for transport costs and the risks of transit. These risks and costs include the payment of domestic duties in the buyer's country and any charges associated with the import clearing process at destination.
DAF
(Delivered At Frontier) (… named place) is a monomodal (land) expression which should be further qualified by naming the frontier (border post) up to which the seller is prepared to take responsibility for transport costs and the corresponding risks of transit. The seller must clear the cargo through customs on the export side of the border of handover, whereas the buyer must clear the goods through customs on the import side.
What does it take to use Incoterms correctly?
ICC recommends that "Incoterms 2000" be referred to specifically whenever the terms are used, together with a location. For example, the term "Delivered at Frontier (DAF)" should always be accompanied by a reference to an exact place and the frontier to which delivery is to be made. To prevent misunderstandings, variations of the three-letter Incoterms should be strictly avoided.
Here are three examples of correct use of Incoterms:FCA Kuala Lumpur Incoterms 2000FOB Liverpool Incoterms 2000DDU Frankfurt Schmidt GmbH Warehouse 4 Incoterms 2000
INCOTERMS CHART
The following chart summarizes the responsibilities of both the buyer and seller for each of the current 13 INCOTERMS (http://www.i-b-t.net/incoterms.html).
EXW
FCA
FAS
FOB
CFR
CIF
CPT
CIP
DAF
DES
DEQ
DDU
DDP
SERVICES
Ex Works
Free Carrier
Free Alongside Ship
Free Onboard Vessel
Cost & Freight
Cost Insurance & Freight
Carriage Paid To
Carriage Insurance Paid To
Delivered At Frontier
Delivered Ex Ship
Delivered Ex Quay Duty Unpaid
Delivered Duty Unpaid
Delivered Duty Paid
Warehouse Storage
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Warehouse Labor
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Export Packing
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Loading Charges
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Inland Freight
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Terminal Charges
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Forwarder's Fees
Buyer
Buyer
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Loading On Vessel
Buyer
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Ocean/Air Freight
Buyer
Buyer
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Charges On Arrival At Destination
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Seller
Seller
Buyer
Buyer
Seller
Seller
Seller
Duty, Taxes & Customs Clearance
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Seller
Delivery To Destination
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Seller
Seller
INCOTERMS QUIZ
(http://www.exportimportlaw.com/quizzes/incotermsquiz.html)
1. Incoterms 2000
a) are internationally recognized commercial shipping terms
b) are ocean navigational vectors derived from the Inca Empire of the Andes
c) are federally-mandated insurance premiums and conditions on export transaction
d) dictate the type of ink and formatting used in international shipping contracts
2. Incoterms 2000 were written
a) under the United Nations Convention for the International Sale of Goods (Vienna Convention)
b) by the International Chamber of Commerce
c) under the Kyoto Protocols as adopted in 2000
d) under “fast track” authority granted by the U.S. Congress
3. Incoterms 2000 apply
a) to all international shipments of goods
b) to International shipments beyond a certain tonnage
c) to international shipments under the Uniform Commercial Code
d) only if clearly incorporated into the contract of sale
4. To apply to the transaction, Incoterms 2000 must be incorporated into
a) contract of carriage
b) negotiable bill of lading
c) sales contract
d) the Shippers Export Declaration or AES form
5. Incoterms 2000 address
a) Ownership rights
b) Breaches of contract
c) The risks of loss between the parties
d) Type of ship used
6. Incoterms 2000
a) Can only be used for international purchases
b) Can only be used for purchases within the same country
c) Can only be used for purchases across the ocean
d) Can be used for both domestic and international purchases
7. How many terms are in Incoterms 2000?
a) 5
b) 13
c) 2,000
d) the number is limited only by the parties’ cargo needs
8. If the Seller wants to minimize its costs/risks, what series of Incoterms 2000 will the Seller use?
a) “E” series
b) “F” series
c) “C” series
d) “D” series
9. Under which series of Incoterms 2000 is the Seller’s cost/risk the greatest?
a) “E” series
b) “F” series
c) “C” series
d) “D” series
10. Which terms are limited to shipments via maritime or inland waterway?
a) EXW, FAS, and FOB
b) FCA, CPT, and CIP
c) DAF, DDU, and DDP
d) FAS, FOB, and CIF
11. The following Incoterms 2000 are allowed regardless of the mode of transportation
a) EXW, FCA, and FAS
b) FCA, CPT, and CIP
c) EXW, FAS, and FOB
d) EXW, FCA, and DES
12. When goods are shipped "CIF", which party is responsible for the freight charges?
a) Buyer
b) Seller
c) Both
d) Neither
13. "FOB" is only appropriate when goods are shipped via
a) Truck
b) Rail
c) Ship
d) Air
14. Which Incoterms can be used to transfer title to goods at the port of export
a) EXW
b) FCA
c) FOB
d) None of the above
15. When goods are shipped "DDP”, who is responsible for Customs clearance?
a) Buyer
b) Seller
c) Both
d) Neither
16. "FOB" stands for
a) First On Board
b) Free On Boat
c) Free On Board
d) First Off Barge
17. In "DEQ," or "Delivered Ex Quay," what is a quay?
a) Dock
b) Vessel
c) Crane
d) Inter-modal transport
18. Which modes of transport are proper for goods shipped "DDP"?
a) Truck/Rail
b) Ship
c) Air
d) All of the above
INCOTERMS 2000 – REVISION
1. What are the Incoterms 2000?
2. In how many series are they classified? Which?
3. Under which term does the seller have to cover only warehouse storage, warehouse labour and export packing?
4. Under which term is the seller free of all obligations after he has given the goods to the carrier named by the buyer?
5. Under which term is the seller required to bear all costs and risks to bring the goods to the country of destination?
6. As a result, which group represents the most and which obligations for the seller/buyer?
7. Which Incoterms can only be used for sea and inland waterway transport?
8. In the sentence “Our prices are CIF Koper”, what does Koper refer to?
9. In the sentence, “Our prices are EXW Koper”, what does Koper refer to?
INCOTERMS QUIZ - keys
(http://www.exportimportlaw.com/quizzes/incotermsquiz.html)
1. Incoterms 2000 (a) are internationally recognized commercial shipping terms
2. Incoterms 2000 were written (b) by the International Chamber of Commerce
3. Incoterms apply (d) only if clearly incorporated into the contract of sale
4. To apply to the transaction, Incoterms 2000 must be incorporated into (c) the sales contract
5. Incoterms 2000 address (c) the risks of loss between the parties
6. Incoterms 2000 (d) can be used for both domestic and international purchases.
7. How many terms are in Incoterms 2000? (b) 13
8. (a) "E" Series
9. (d) "D" Series
10. (d) FAS, FOB, and CIF
11. (b) FCA, CPT, and CIP (also EXW, DAF, DDU, and DDP)
12. (b) the seller
14. "FOB" is only appropriate when goods are shipped via (c) ship
15. (b) the Seller agrees to clear goods for import and pay any duty
16. "FOB" stands for (c) “Free on Board”
17. (a) Dock
18. (d) All of the above (You can use EXW, FCA, CPT, CIP, DAF, DDU, or DDP for any mode of transport).
PURPOSE OF INCOTERMS
1. The purpose of "Incoterms", is to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree.
2. Frequently parties to a contract are unaware of the different trading practices in their respective countries. This can give rise to misunderstandings, disputes and litigation with all the waste of time and money that this entails. In order to remedy these problems the International Chamber of Commerce first published in 1936 a set of international rules for the interpretation of trade terms. These rules were known as "Incoterms 1936". Amendments and, additions were later made in 1953, 1967, 1976, 1980 and presently 1990 in order to bring the rules in line with current international trade practices.
WHY NEW INCOTERMS?
3. The main reason for the 1990 revision of lncoterms was the desire to adapt terms to the increasing use of electronic data interchange (EDI). In the present 1990 version of lncoterms this is possible when the parties have to provide various documents (such as commercial invoices, documents needed for customs clearance or documents in proof of delivery of the goods as well as transport documents). Particular problems arise when the seller has to present a negotiable transport document and notably the bill of lading which is frequently used for the purposes of selling the goods while they are being carried. In these cases it is of vital importance, when using EDI messages, to ensure that the buyer has the same legal position as he would have obtained if he had received a bill of lading from the seller.
NEW TRANSPORTATION TECHNIQUES
4. A further reason for the revision stems from changed transportation techniques, particularly the unitisation of cargo in containers, multimodal transport and roll on-roll off traffic with road vehicles and railway wagons in "short-sea" maritime transport. In lncoterms 1990 the term "Free carrier ... named place" (FCA) has now been adapted to suit all types of transport irrespective of the mode and combination of different modes. As a consequence, the terms which appear in the previous version of lncoterms dealing with some particular modes of transport (FOR/FOT and FOB Airport) have been removed.
NEW METHOD OF PRESENTING INCOTERMS
5. In connection With the revision work within the ICC Working Pady, suggestions were made to present the trade terms in another manner for the purpose of easier reading and understanding. The terms have been grouped in four basically different categories; namely starting with the only term whereby the seller makes the goods available to the buyer at the seller's own premises (the "E"-term Ex works); followed by the second group whereby the seller is called upon to deliver the goods to a carrier appointed by the buyer (the "F"-Terms FCA, FAS and FOB); continuing with the "C"-Terms where the seller has to contract for carriage, but without assuming the risk of loss of or damage to the goods or additional costs due to events occurring after shipment and dispatch (CFR, CIF, CPT and CIP); and, finally, the "D"-terms whereby the seller has to bear all costs and risks needed to bring the goods to the country of destination (DAF, DES, DEQ, DDU and DDP). A chart setting out this new classification is given hereafter.
INCOTERMS 1990
Group E
Departure
Exw
Ex Works
Group F Main Carriage unpiad
FCA
FAS
FOB
Free carrier
Free Alongside Ship
Free On Board
Group C Main Carriage paid
CFR
CIF
CPT
Cost and Freight
Cost, lnsurance and Freight
Carriage Paid To
Group D Arrival
CIP
DAF
DES
DEO
DDU
DDP
Carriage and lnsurance Paid To
Delivered At Frontier
Delivered Ex Ship
Delivered Ex Quay
Delivered Duty Unpaid Delivered
Duty Paid
Further, under all terms, the respective obligations of the parties have been grouped under 10 headings where each heading on the seller's side "mirrors" the position of the buyer with respect to the same subject matter. Thus, if for instance according to A.3. the seller has to arrange and pay for the contract of carriage we find the words "No obligation" under the heading "Contract of carriage" in B.3. setting forth the buyer's position. Needless to say, this does not mean that the buyer would not in his own interest make such contracts as may be needed to bring the goods to the desired destination, but he has "no obligation" to the seller to do so. However, with respect to the division between the parties of duties, taxes and other official charges, as well as the costs of carring out customs formalities, the terms explain for the sake of clarity how such costs are divided between the parties although, of course, the seller might not have any interest at all in the buyer's further disposal of the goods after they have been delivered to him. Conversely, under some terms such as the "D"-Terms, the buyer is not interested in costs which the seller might incur in order to bring the goods all the way to the agreed destination point.
CUSTOMS OF THE PORT OR OF A PARTICULAR TRADE
6. Since the trade terms must necessarily be possible to use in different trades and regions it is impossible to set forth the obligations of the parties with precision. To some extent it is therefore necessary to refer to the custom of the particular trade place or to the practices which the parties themselves may have established in their previous dealinas (cf. Article 9 of the 1980 United Nations Convention on Contracts for the International Sale of Goods). It is of course desirable that sellers and buyers keep themselves duly informed of such customs of the trade when they negotiate their contract and that, whenever uncertainty arises, clarify their legal position by appropriate clauses in their contract of sale. Such special provisions in the individual contract would supersede or vary anything which is set forth as a rule of interpretation in the various lncoterms.
THE BUYER'S 0PTIONS
7. In some situations, it may not be possible at the time when the contract of sale is entered into to decide precisely on the exact point or even the place where the goods should be delivered by the seller for carriage or at the final destination. For instance reference might have been made at this stage merely to a "range" or to a rather large place, e.g. seaport, and it is then usualy stipulated that the buyer can have the right or duty to name later on the more precise point within the range or the place. If the buyer has a duty to name the precise point as aforesaid his failure to do so might result in liability to bear the risks and additional costs resulting from such failure. In addition, the buyer's failure to use his right to indicate the point may give the seller the right to select the point which best suits his purpose.
CUSTOMS CLEARANCE
8. It is normally desirable that customs clearance is arranged by the party domiciled in the country where such clearance should take place or at least by somebody acting there on his behalf. Thus, the exporter should normally clear the goods for export, while the importer should clear the goods for import. However, under some trade terms, the buyer might undertake to clear the goods for export in the seller's country (EXW, FAS) and, in other terms, the seller might undertake to clear the goods for import into the buyer's country (DEO and DDP). Needless to say in these cases the buyer and the seller respectively must assume any risk of export and import prohibition. Also they must ascertain that a customs clearance performed by, or on behalf of, a party not domiciled in the respective country is accepted by the authorities. Particular problems arise when the seller undertakes to deliver the goods into the buyer's country in places which cannot be reached until the goods have been cleared for import but where his ability to reach that place is adversely affected by the buyer's failure to fulfil his obligation to clear the goods for import (see further the comment to DDU below). It may well be that a buyer would wish to collect the goods at the seller's premises under the term EXW or to receive the goods alongside a ship under the trade term FAS, but would like the seller to clear the goods for export. If so, the words "cleared for export" could be added after the respective trade term. Conversely, it may be that the seller is prepared to deliver the goods under the trade term DEQ or DDP, but without assuming wholly or partly the obligation to pay the duty or other taxes or official charges levied upon importation of the goods. If so, the words "duty unpaid" might be added after DEQ; or the particular taxes or charges which the seller does not wish to pay may be specifically excluded, e.g. DEQ or DDP "VAT unpaid". It has also been observed that in many countries it is difficult for a foreign company to obtain not only the import licence, but also duty reliefs (VAT deduction, etc.). "Delivered, Duty Unpaid", can solve these problems by removing from the seller the obligation to clear the goods for import. In some cases, however, the seller whose obligation of carriage extends to the buyer's premises in the country of import, wants to carry out customs formalities without paying the duties. If so, the DDU term should be added with words to that effect such as DDU, cleared.. Corresponding additions may be used with other "D"-Terms, e.g. "DDP, VAT unpaid", "DEQ, duty unpaid"
PACKAGING
9. In most cases, the parties would know beforehand which packaging is required for the safe carriage of the goods to the destination. However, since the seller's obligation to pack the goods may well vary according to the type and duration of the transport envisaged, it has been felt necessary to stipulate that the seller is obliged to pack the goods in such a manner as is required for the transport, but only to the extent that the circumstances relating to the transport are made known to him before the contract of sale is concluded (cf. Articles 35.1. and 35.2.b. of the 1980 United Nations Convention on Contracts for the International Sale of Goods where the goods, including packaging, must be "fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where the circumstances show that the buyer did not rely, or that it was unreasonable for him to rely, on the seller's skill and judgement")
INSPECTION OF GOODS
10. In many cases, the buyer may be well advised to arrange for inspection of the goods before or at the time they are handed over by the seller for carriage (so-called pre-shipment inspection or PSI). Unless the contract stipulates otherwise, the buyer would himself have to pay the cost for such inspection which is arranged in his own interest. However, if the inspection has been made in order to enable the seller to comply with any mandatory rules applicable to the export of the goods in his own country he would have to pay for that inspection.
FREE CARRIER... NAMED PLACE (FCA)
11. As has been said, the FCA-Term could be used whenever the seller should fulfil his obligation by handing over the goods to a carrier named by the buyer. It is expected that this term Will also be used for maritime transport in all cases where the cargo is not handed to the ship in the traditional method over the ship's rail. Needless to say, the traditional FOB-term is inappropriate where the seller is called upon to hand over the goods to a cargo terminal before the ship arrives, since he would then have to bear the risks and costs after the time when he has no possibility to control the goods or to give instructions with respect to their custody. It should be stressed that under the "F"-Terms, the seller should hand over the goods for carriage as instructed by the buyer, since the buyer would make the contract of carriage and name the carrier. Thus, it is not necessary to spell out in the trade term precisely how the goods should be handed over by the seller to the carrier. Nevertheless, in order to make it possible for traders to use FCA as an - "overriding", "F"-term, explanations are given with respect to the customary modalities of delivery for the different modes of transport. In the same manner, it may well be superfluous to introduce a definition of "carrier" since it is for the buyer to, instruct the seller to whom the goods should be delivered for carriage. However, since the carrier and the document of transport are of great importance to traders, the preamble to the FCA-term contains a definition of "carrier". In this context, it should be noted that the term "carrier" not only refers to an enterprise actuary performing the carriage but it also includes an enterprise merely having undertaken to perform or to procure the performance of the carriage as long as such enterprise assumes liability as a carrier for the carriage. In other words, the term "carrier" comprises performing as well as contracting carriers. Since the position in this respect of the freight forwarder varies from country to country and according to practices in the freight forwarding industry, the preamble contains a reminder that the seller must, of course, follow the buyer's instructions to deliver the goods to a freight forwarder even if the freight forwarder would have refused to accept carrier liability and thus fall outside the definition of "carrier".
THE "C"-TERMS (CFR, CIF, CPT AND CIP)
12. Under the "C"-Terms, the seller must contract for carriage on usual terms at his own expense. Therefore, a point up to which he would have to pay transportation costs must necessarily be indicated after the respective "C"-Term. Under the CIF and CIP terms the seller also has to take out insurance and bear the insurance cost. Since the point for the division of costs refers to the country of destination, the "C"-Terms are frequently mistakenly believed to be arrival contracts, whereby the seller is not relieved from any risks or costs until the goods have actually arrived at the agreed point. However, it must be stressed over and over again that the "C"-Terms are of the same nature as the "F"-Terms in that the seller fulfils the contract in the country of shipment or dispatch. Thus, the contracts of sale under the "C"-Terms, like the contracts under the "F"-Terms, fall under the category of shipment contracts. While the seller would have to pay the normal transportation cost for the carriage of the goods by a usual route and in a customary manner to the agreed place of destination, the risk for loss of or damage to the goods, as well as additional costs resulting from events occurring after the goods having been handed over for carriage, fall upon the buyer. Hence, the "C"-Terms as distinguished from all other terms contain two "critical" points, one for the division of costs and another one for the division of risks. For this reason, the greatest caution must be observed when adding obligations of the seller to the "C"-Terms referring to a time after the aforementioned "critical" point for the division of risk. It is the very essence of the "C"-Terms to relieve the seller from any further risk and cost after he has duly fulfilled his contract by contracting for carriage and handing over the goods to the carrier and by providing for insurance under the CIF- and CIP-terms. It should also be possible for the seller to agree with the buyer to collect payment under a documentary credit by presenting the agreed shipping documents to the bank. It would be quite contrary to this common method of payment in international trade if the seller were to have to bear further risks and costs after the moment when payment had been made under documentary credits or otherwse upon shipment and dispatch of the goods. Needless to say, however, the seller would have to pay every cost which is due to the carrier irrespective of whether freight should be pre-paid upon shipment or is payabe at destination (freight collect), except such additional costs which may result from events occurring subsequent to shipment and dispatch. If it is customary to procure several contracts of carriage involving transhipment of the goods at intermediate places in order to reach the agreed destination, the seller would have to pay all these costs, including any costs when the goods are transhipped from one means of conveyance to the other. If, however, the carrier exercised his rights under a transhipment - or similar clause - in order to avoid unexpected hindrances (such as ice, congestion, labour disturbances, government orders, war or warlike operations) then any additional cost resulting therefrom would be for the account of the buyer.
13. It happens quite often that the parties wish to clarify to which extent the seller should procure a contract of carriage including the costs of discharge. Since such costs are normally covered by the freight when the goods are carried by regular shipping lines, the contract of sale would frequently stipulate that the goods would have to be so carried or at least that they should be carried under "liner terms". In other cases, the word "landed" is added after CFR or CIF. Nevertheless, it is advisable not to use abbreviations added to the "C"-Terms unless, in the relevant trade, the meaning of the abbreviations is clearly understood and accepted by, the contracting parties or under any applicable law or custom of the trade. In any event, the seller should not - and indeed could not - without changing the very nature of the "C"terms undertake any obligation with respect to the arrival of the goods at destination, since the risk for any delay during the carriage is borne by the buyer. Thus, any obligation with respect to time must necessarily refer to the place of shipment or dispatch, e.g. "shipment (dispatch) not later than...". An agreement e.g. "CFR Hamburg not later than..." is really a misnomer and thus open to different possible interpretations. The parties could be taken to have meant either that the goods must actually arrive at Hamburg at the specified date, in which case the contract is not a shipment contract but an arrival contract or, alternatively, that the seller must ship the goods at such a time that they would normally arrive at Hamburg before the specified date unless the carriage would have been delayed because of unforeseen events.
14. It happens in commodity trades that goods are bought while they are carried at sea and that, in such cases, the word "afloat" is added after the trade term. Since the risk for loss of or damage to the goods would then, under the CFR- and CIF-terms, have passed from the seller to the buyer, difficulties of interpretation might arise. One possibility would be to maintain the ordinary meaning of the CFR- and CIF-terms with respect to the division of risk between seller and buyer which would mean that the buyer might have to assume risks which have already occurred at the time when the contract of sale has entered into force. The other possibility would be to let the passing of the risk coincide with the time when the contract of sale is concluded, The former possibility might well be practical, since it is usually impossible to ascertain the condition of the goods while they are being carried. For this reason the 1980 UN Convention on Contracts for the International Sale of Goods Article 68 stipulates that "if the circumstances so indicate, the risk is assumed by the buyer from the time the goods were handed over to the carrier who issued the documents embodying the contract of carriage". There is, however, an exception to this rule when "the seller knew or ought to have known that the goods had been lost or damaged and did not disclose this to the buyer". Thus, the interpretation of a CFR- or CIF-Term with the addition of the word "afloat" will depend upon the law applicable to the contract of sale. The parties are advised to ascertain the applicade law and any solution which might follow therefrom. In case of doubt, the parties are advised to clarify the matter in their contract.
"INCOTERMS" AND THE CONTRACT OF CARRIAGE
15. It should be stressed that lncoterms only relate to trade terms used in the contract of sale and thus do not deal with terms - sometimes of the same or similar wording - which may be used in contracts of carriage, particularly as terms of various charterparties. Charterparty terms are usually more specific with respect to costs of loading and discharge and the time available for these operations (so-called "demurrage"-provisions). Parties to contracts of sale are advised to consider this problem by specific stipulations in their contracts of sale so that it is made clear as exactly as possible how much time would be available for the seller to load the goods on a ship or other means of conveyance provided by the buyer and for the buyer to receive the goods from the carrier at destination and, further, to specify to which extent the seller would have to bear the risk and cost of loading operations under the "F"-terms and discharging operations under the "C"-terms. The mere fact that the seller might have procured a contract of carriage, e.g. under the charterparty term "free out" whereby the carrier in the contract of carriage would be relieved from the discharging operations, does not necessarily mean that the risk and cost for such operations would fall upon the buyer under the contract of sale, since it might follow from the stipulations of the latter contract, or the custom of the port, that the contract of carriage procured by the seller should have included the discharging operations.
THE "ON BOARD REQUIREMENT" UNDER FOB, CFR AND CIF
16. The contract of carriage would determine the obligations of the shipper or the sender with respect to handing over the goods for carriage to the carrier. It should be noted that FOB, CFR and CIF all retain the traditional practice to deliver the goods on board the vessel. While, traditionally, the point for delivery of the goods according to the contract of sale coincided with the point for handing over the goods for carriage, contemporary transportation techniques create a considerable problem of "synchronisation" between the contract of carriage and the contract of sale. Nowadays goods are usually delivered by the seller to the carrier before the goods are taken on board or sometimes even before the ship has arrived in the seaport. In such cases, merchants are advised to use such "F"- or "C"-Terms which do not attach the handing over of the goods for carriage to shipment on board, namely FCA, CPT or CIP instead of FOB, CFR and CIF.
THE "D" TERMS (DAF, DES, DEQ, DDU AND DDP)
17. As has been said, the "D"-Terms are different in nature from the "C"-Terms, since the seller according to the "D"-Terms is responsible for the arrival of the goods at the agreed place or point of destination. The seller must bear all risks and costs in bringing the goods thereto. Hence, the "D"-Terms signify arrival contracts, while the "C"-Terms evidence shipment contracts. The "D"-Terms fall into two separate categories. Under DAF, DES and DDU the seller does not have to deliver the goods cleared for import, while under DEQ and DDP he would have to do so. Since DAF is frequently used in railway traffic, where it is practical to obtain a through document from the railway covering the entire transport to the final destination and to arrange insurance for the same period, DAF contains a stipulation in this respect in A.8.. It should be stressed, however, that the seller's duty to assist the buyer in obtainng such a through document of transport is done at the buyer's risk and expense. Similarly, any costs of insurance relating to the time subsequent to the seller's delivery of the goods at the frontier would be for the account of the buyer. The term DDU has been added in the present 1990 version of lncoterms. The term fulfils an important function whenever the seller is prepared to deliver the goods in the country of destination without clearing the goods for import and paying the duty. Whenever clearance for import does not present any problem such as within the European Common Market - the term may be quite desirable and appropriate. However, in countries where import clearance may be difficult and time consuming, it may be risky for the seller to undertake an obligation to deliver the goods beyond the customs clearance point. Although, according to DDU B.5. and B.6., the buyer would have to bear the additional risks and costs which might follow from his failure to fulfil his obligations to clear the goods for import, the seller is advised not to use the term DDU in countries where difficulties might be expected in clearing the goods for import.
THE BILL OF LADING AND EDI PROCEDURES
18. Traditionally, the on board bill of lading has been the only acceptable document to be presented by the seller under the terms CFR and CIF. The bill of lading fulfils three important functions, namely proof of delivery of the goods on board the vessel evidence of the contract of carriage a means of transferring rights to the goods in transit by the transfer of the paper document to another party. Transport documents other than the bill of lading would fulfil the two first mentioned functions, but would not control the delivery of the goods at destination or enable a buyer to sell the goods in transit by surrendering the paper document to his buyer. Instead, other transport documents would name the party entitled to receive the goods at destination. The fact that the possession of the bill of lading is required in order to obtain the goods from the carrier at destination makes it particularly difficult to replace by EDI-procedures. Further, it is customary to issue bills of lading ih several originals but it is, of course, of vital importance for a buyer or a bank acting upon his instructions in paying the seller to ensure that all originals are surrendered by the seller (so-called "full set"). This is also a requirement under the ICC Rules for Documentary Credits (the so-called Uniform Customs and Practice, "UCP"; ICC Publication 400). The transport document must evidence not only delivery of the goods to the carrier but also that the goods, as far as could be ascertained by the carrier, were received in good order and condition. Any notation on the transport document which would indicate that the goods had not been in such condition would make the document "unclean" and thus make it unacceptable under UCP (Art. 18; see also ICC Publication 473). In spite of the particular legal nature of the bill of lading it is expected that it will be replaced by EDI-procedures in the near future. The 1990 version of lncoterms has taken this expected development into proper account.
NON-NEGOTIABLE TRANSPORT DOCUMENTS INSTEAD OF BILLS OF LADING
19. In recent years, a considerable simplification of documentary practices has been achieved. Bills of lading are frequently replaced by non-negotiable documents similar to those which are used for other modes of transport than carriage by sea. These documents are called "sea waybills", "liner waybills", "freight receipts", or variants of such expressions. These non-negotiable documents are quite satisfactory to use except where the buyer wishes to sell the goods in transit by surrendering a paper document to the new buyer. In order to make this possible, the obligation of the seller to provide a bill of lading under CFR and CIF must necessarily be retained. However, when the contracting parties know that the buyer does not contemplate selling the goods in transit, they may specifically agree to relieve the seller from the obligation to provide a bill of lading, or, alternatively, they may use CPT and CIP where there is no requirement to provide a bill of lading.
MODE OF TRANSPORT AND THE APPROPIATE INCOTERM 1990
Any Mode of Transport including Multimodal
EXW
CPT
CIP
DAF
DDU
DDP
Ex Works (... named place) Free Carrier (... named place)
Carriage Paid To (... named place of destination)
Carriage and Insurance Paid To (... named place of destination)
Delivered At Frontier (... named place)
Delivered Duty Unpaid (... named place of destination)
Delivered Duty Paid (... named place of destination)
Air Transport
FCA
Free Carrier (... named place)
Rail Transport
FCA
Free Carrier (... named place)
Sea and Inland Waterway Transport
FAS
FOB
CFR
CIF
DES
DEQ
Free Alongside Ship (... named port of shipment)
Free On Board (... named port of shipment)
Cost and Freight (... named port of destination)
Cost, Insurance and Freight (... named port of destination)
Delivered Ex Ship (... named port of destination)
Delivered Ex Quay (... named port of destination)
MODE OF TRANSPORT AND THE APPROPRIATE INCOTERM 1990 THE RIGHT TO GIVE INSTRUCTIONS TO THE CARRIER
20. A buyer paying for the goods under a "C"-Term should ensure that the seller upon payment is prevented from disposing of the goods by new instructions to the carrier. Some transport documents used for particular modes of transport (air, road or rail) offer the contracting parties a possibility to estop the seller from giving such new instructions to the carrier by providing the buyer with a particular original or duplicate of the waybill. These waybills will have a "no-disposal" clause. However, the documents used instead of bills of lading for maritime carriage do not normally contain such an "estoppel" function. Work is in progress within the Comité Maritime International to remedy this shortcoming of the above-mentioned documents by introducing "Uniform Rules for Sea Waybills". However, until this work has materialised, and been followed through in practice, the buyer should avoid paying against these non-negotiable documents whenever he has any reason to mistrust his seller.
PASSING OF RISKS AND COSTS RELATING TO THE GOODS
21. The risk for loss of or damage to the goods, as well as the obligation to bear the costs relating to the goods, passes from the seller to the buyer when the seller has fulfilled his obligation to deliver the goods. Since the buyer should not be given the possibility to delay the passing of the risks and costs, all terms stipulate that the passing of risks and costs may occur even before delivery, if the buyer does not take delivery as agreed or fails to give such instructions (with respect to time for shipment and/or place for delivery) as the seller may require in order to fulfil his obligation to deliver the goods. It is a requirement for such premature passing of risk and costs that the goods have been identified as intended for the buyer or, as is stipulated in the terms, set aside for him (appropriation). This requirement is particularly important under EXW, since under all other terms the goods would normally have been identified as intended for the buyer when measures have been taken for their shipment or dispatch ("F"and "C"-Terms) or their delivery at destination ("D"-Terms). In exceptional cases, however, the goods may have been sent from the seller in bulk without identification of the quantity for each buyer and, if so, passing of risk and cost does not occur before the goods have been appropriated as aforesaid (cf. also Article 69.3 of the 1980 UN Convention on the International Sale of Goods).
REFERENCE TO INCOTERMS
22. Merchants wishing to use these rules should now specify that their contracts will be governed by "Incoterms 1990".
1. The purpose of "Incoterms", is to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree.
2. Frequently parties to a contract are unaware of the different trading practices in their respective countries. This can give rise to misunderstandings, disputes and litigation with all the waste of time and money that this entails. In order to remedy these problems the International Chamber of Commerce first published in 1936 a set of international rules for the interpretation of trade terms. These rules were known as "Incoterms 1936". Amendments and, additions were later made in 1953, 1967, 1976, 1980 and presently 1990 in order to bring the rules in line with current international trade practices.
WHY NEW INCOTERMS?
3. The main reason for the 1990 revision of lncoterms was the desire to adapt terms to the increasing use of electronic data interchange (EDI). In the present 1990 version of lncoterms this is possible when the parties have to provide various documents (such as commercial invoices, documents needed for customs clearance or documents in proof of delivery of the goods as well as transport documents). Particular problems arise when the seller has to present a negotiable transport document and notably the bill of lading which is frequently used for the purposes of selling the goods while they are being carried. In these cases it is of vital importance, when using EDI messages, to ensure that the buyer has the same legal position as he would have obtained if he had received a bill of lading from the seller.
NEW TRANSPORTATION TECHNIQUES
4. A further reason for the revision stems from changed transportation techniques, particularly the unitisation of cargo in containers, multimodal transport and roll on-roll off traffic with road vehicles and railway wagons in "short-sea" maritime transport. In lncoterms 1990 the term "Free carrier ... named place" (FCA) has now been adapted to suit all types of transport irrespective of the mode and combination of different modes. As a consequence, the terms which appear in the previous version of lncoterms dealing with some particular modes of transport (FOR/FOT and FOB Airport) have been removed.
NEW METHOD OF PRESENTING INCOTERMS
5. In connection With the revision work within the ICC Working Pady, suggestions were made to present the trade terms in another manner for the purpose of easier reading and understanding. The terms have been grouped in four basically different categories; namely starting with the only term whereby the seller makes the goods available to the buyer at the seller's own premises (the "E"-term Ex works); followed by the second group whereby the seller is called upon to deliver the goods to a carrier appointed by the buyer (the "F"-Terms FCA, FAS and FOB); continuing with the "C"-Terms where the seller has to contract for carriage, but without assuming the risk of loss of or damage to the goods or additional costs due to events occurring after shipment and dispatch (CFR, CIF, CPT and CIP); and, finally, the "D"-terms whereby the seller has to bear all costs and risks needed to bring the goods to the country of destination (DAF, DES, DEQ, DDU and DDP). A chart setting out this new classification is given hereafter.
INCOTERMS 1990
Group E
Departure
Exw
Ex Works
Group F Main Carriage unpiad
FCA
FAS
FOB
Free carrier
Free Alongside Ship
Free On Board
Group C Main Carriage paid
CFR
CIF
CPT
Cost and Freight
Cost, lnsurance and Freight
Carriage Paid To
Group D Arrival
CIP
DAF
DES
DEO
DDU
DDP
Carriage and lnsurance Paid To
Delivered At Frontier
Delivered Ex Ship
Delivered Ex Quay
Delivered Duty Unpaid Delivered
Duty Paid
Further, under all terms, the respective obligations of the parties have been grouped under 10 headings where each heading on the seller's side "mirrors" the position of the buyer with respect to the same subject matter. Thus, if for instance according to A.3. the seller has to arrange and pay for the contract of carriage we find the words "No obligation" under the heading "Contract of carriage" in B.3. setting forth the buyer's position. Needless to say, this does not mean that the buyer would not in his own interest make such contracts as may be needed to bring the goods to the desired destination, but he has "no obligation" to the seller to do so. However, with respect to the division between the parties of duties, taxes and other official charges, as well as the costs of carring out customs formalities, the terms explain for the sake of clarity how such costs are divided between the parties although, of course, the seller might not have any interest at all in the buyer's further disposal of the goods after they have been delivered to him. Conversely, under some terms such as the "D"-Terms, the buyer is not interested in costs which the seller might incur in order to bring the goods all the way to the agreed destination point.
CUSTOMS OF THE PORT OR OF A PARTICULAR TRADE
6. Since the trade terms must necessarily be possible to use in different trades and regions it is impossible to set forth the obligations of the parties with precision. To some extent it is therefore necessary to refer to the custom of the particular trade place or to the practices which the parties themselves may have established in their previous dealinas (cf. Article 9 of the 1980 United Nations Convention on Contracts for the International Sale of Goods). It is of course desirable that sellers and buyers keep themselves duly informed of such customs of the trade when they negotiate their contract and that, whenever uncertainty arises, clarify their legal position by appropriate clauses in their contract of sale. Such special provisions in the individual contract would supersede or vary anything which is set forth as a rule of interpretation in the various lncoterms.
THE BUYER'S 0PTIONS
7. In some situations, it may not be possible at the time when the contract of sale is entered into to decide precisely on the exact point or even the place where the goods should be delivered by the seller for carriage or at the final destination. For instance reference might have been made at this stage merely to a "range" or to a rather large place, e.g. seaport, and it is then usualy stipulated that the buyer can have the right or duty to name later on the more precise point within the range or the place. If the buyer has a duty to name the precise point as aforesaid his failure to do so might result in liability to bear the risks and additional costs resulting from such failure. In addition, the buyer's failure to use his right to indicate the point may give the seller the right to select the point which best suits his purpose.
CUSTOMS CLEARANCE
8. It is normally desirable that customs clearance is arranged by the party domiciled in the country where such clearance should take place or at least by somebody acting there on his behalf. Thus, the exporter should normally clear the goods for export, while the importer should clear the goods for import. However, under some trade terms, the buyer might undertake to clear the goods for export in the seller's country (EXW, FAS) and, in other terms, the seller might undertake to clear the goods for import into the buyer's country (DEO and DDP). Needless to say in these cases the buyer and the seller respectively must assume any risk of export and import prohibition. Also they must ascertain that a customs clearance performed by, or on behalf of, a party not domiciled in the respective country is accepted by the authorities. Particular problems arise when the seller undertakes to deliver the goods into the buyer's country in places which cannot be reached until the goods have been cleared for import but where his ability to reach that place is adversely affected by the buyer's failure to fulfil his obligation to clear the goods for import (see further the comment to DDU below). It may well be that a buyer would wish to collect the goods at the seller's premises under the term EXW or to receive the goods alongside a ship under the trade term FAS, but would like the seller to clear the goods for export. If so, the words "cleared for export" could be added after the respective trade term. Conversely, it may be that the seller is prepared to deliver the goods under the trade term DEQ or DDP, but without assuming wholly or partly the obligation to pay the duty or other taxes or official charges levied upon importation of the goods. If so, the words "duty unpaid" might be added after DEQ; or the particular taxes or charges which the seller does not wish to pay may be specifically excluded, e.g. DEQ or DDP "VAT unpaid". It has also been observed that in many countries it is difficult for a foreign company to obtain not only the import licence, but also duty reliefs (VAT deduction, etc.). "Delivered, Duty Unpaid", can solve these problems by removing from the seller the obligation to clear the goods for import. In some cases, however, the seller whose obligation of carriage extends to the buyer's premises in the country of import, wants to carry out customs formalities without paying the duties. If so, the DDU term should be added with words to that effect such as DDU, cleared.. Corresponding additions may be used with other "D"-Terms, e.g. "DDP, VAT unpaid", "DEQ, duty unpaid"
PACKAGING
9. In most cases, the parties would know beforehand which packaging is required for the safe carriage of the goods to the destination. However, since the seller's obligation to pack the goods may well vary according to the type and duration of the transport envisaged, it has been felt necessary to stipulate that the seller is obliged to pack the goods in such a manner as is required for the transport, but only to the extent that the circumstances relating to the transport are made known to him before the contract of sale is concluded (cf. Articles 35.1. and 35.2.b. of the 1980 United Nations Convention on Contracts for the International Sale of Goods where the goods, including packaging, must be "fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where the circumstances show that the buyer did not rely, or that it was unreasonable for him to rely, on the seller's skill and judgement")
INSPECTION OF GOODS
10. In many cases, the buyer may be well advised to arrange for inspection of the goods before or at the time they are handed over by the seller for carriage (so-called pre-shipment inspection or PSI). Unless the contract stipulates otherwise, the buyer would himself have to pay the cost for such inspection which is arranged in his own interest. However, if the inspection has been made in order to enable the seller to comply with any mandatory rules applicable to the export of the goods in his own country he would have to pay for that inspection.
FREE CARRIER... NAMED PLACE (FCA)
11. As has been said, the FCA-Term could be used whenever the seller should fulfil his obligation by handing over the goods to a carrier named by the buyer. It is expected that this term Will also be used for maritime transport in all cases where the cargo is not handed to the ship in the traditional method over the ship's rail. Needless to say, the traditional FOB-term is inappropriate where the seller is called upon to hand over the goods to a cargo terminal before the ship arrives, since he would then have to bear the risks and costs after the time when he has no possibility to control the goods or to give instructions with respect to their custody. It should be stressed that under the "F"-Terms, the seller should hand over the goods for carriage as instructed by the buyer, since the buyer would make the contract of carriage and name the carrier. Thus, it is not necessary to spell out in the trade term precisely how the goods should be handed over by the seller to the carrier. Nevertheless, in order to make it possible for traders to use FCA as an - "overriding", "F"-term, explanations are given with respect to the customary modalities of delivery for the different modes of transport. In the same manner, it may well be superfluous to introduce a definition of "carrier" since it is for the buyer to, instruct the seller to whom the goods should be delivered for carriage. However, since the carrier and the document of transport are of great importance to traders, the preamble to the FCA-term contains a definition of "carrier". In this context, it should be noted that the term "carrier" not only refers to an enterprise actuary performing the carriage but it also includes an enterprise merely having undertaken to perform or to procure the performance of the carriage as long as such enterprise assumes liability as a carrier for the carriage. In other words, the term "carrier" comprises performing as well as contracting carriers. Since the position in this respect of the freight forwarder varies from country to country and according to practices in the freight forwarding industry, the preamble contains a reminder that the seller must, of course, follow the buyer's instructions to deliver the goods to a freight forwarder even if the freight forwarder would have refused to accept carrier liability and thus fall outside the definition of "carrier".
THE "C"-TERMS (CFR, CIF, CPT AND CIP)
12. Under the "C"-Terms, the seller must contract for carriage on usual terms at his own expense. Therefore, a point up to which he would have to pay transportation costs must necessarily be indicated after the respective "C"-Term. Under the CIF and CIP terms the seller also has to take out insurance and bear the insurance cost. Since the point for the division of costs refers to the country of destination, the "C"-Terms are frequently mistakenly believed to be arrival contracts, whereby the seller is not relieved from any risks or costs until the goods have actually arrived at the agreed point. However, it must be stressed over and over again that the "C"-Terms are of the same nature as the "F"-Terms in that the seller fulfils the contract in the country of shipment or dispatch. Thus, the contracts of sale under the "C"-Terms, like the contracts under the "F"-Terms, fall under the category of shipment contracts. While the seller would have to pay the normal transportation cost for the carriage of the goods by a usual route and in a customary manner to the agreed place of destination, the risk for loss of or damage to the goods, as well as additional costs resulting from events occurring after the goods having been handed over for carriage, fall upon the buyer. Hence, the "C"-Terms as distinguished from all other terms contain two "critical" points, one for the division of costs and another one for the division of risks. For this reason, the greatest caution must be observed when adding obligations of the seller to the "C"-Terms referring to a time after the aforementioned "critical" point for the division of risk. It is the very essence of the "C"-Terms to relieve the seller from any further risk and cost after he has duly fulfilled his contract by contracting for carriage and handing over the goods to the carrier and by providing for insurance under the CIF- and CIP-terms. It should also be possible for the seller to agree with the buyer to collect payment under a documentary credit by presenting the agreed shipping documents to the bank. It would be quite contrary to this common method of payment in international trade if the seller were to have to bear further risks and costs after the moment when payment had been made under documentary credits or otherwse upon shipment and dispatch of the goods. Needless to say, however, the seller would have to pay every cost which is due to the carrier irrespective of whether freight should be pre-paid upon shipment or is payabe at destination (freight collect), except such additional costs which may result from events occurring subsequent to shipment and dispatch. If it is customary to procure several contracts of carriage involving transhipment of the goods at intermediate places in order to reach the agreed destination, the seller would have to pay all these costs, including any costs when the goods are transhipped from one means of conveyance to the other. If, however, the carrier exercised his rights under a transhipment - or similar clause - in order to avoid unexpected hindrances (such as ice, congestion, labour disturbances, government orders, war or warlike operations) then any additional cost resulting therefrom would be for the account of the buyer.
13. It happens quite often that the parties wish to clarify to which extent the seller should procure a contract of carriage including the costs of discharge. Since such costs are normally covered by the freight when the goods are carried by regular shipping lines, the contract of sale would frequently stipulate that the goods would have to be so carried or at least that they should be carried under "liner terms". In other cases, the word "landed" is added after CFR or CIF. Nevertheless, it is advisable not to use abbreviations added to the "C"-Terms unless, in the relevant trade, the meaning of the abbreviations is clearly understood and accepted by, the contracting parties or under any applicable law or custom of the trade. In any event, the seller should not - and indeed could not - without changing the very nature of the "C"terms undertake any obligation with respect to the arrival of the goods at destination, since the risk for any delay during the carriage is borne by the buyer. Thus, any obligation with respect to time must necessarily refer to the place of shipment or dispatch, e.g. "shipment (dispatch) not later than...". An agreement e.g. "CFR Hamburg not later than..." is really a misnomer and thus open to different possible interpretations. The parties could be taken to have meant either that the goods must actually arrive at Hamburg at the specified date, in which case the contract is not a shipment contract but an arrival contract or, alternatively, that the seller must ship the goods at such a time that they would normally arrive at Hamburg before the specified date unless the carriage would have been delayed because of unforeseen events.
14. It happens in commodity trades that goods are bought while they are carried at sea and that, in such cases, the word "afloat" is added after the trade term. Since the risk for loss of or damage to the goods would then, under the CFR- and CIF-terms, have passed from the seller to the buyer, difficulties of interpretation might arise. One possibility would be to maintain the ordinary meaning of the CFR- and CIF-terms with respect to the division of risk between seller and buyer which would mean that the buyer might have to assume risks which have already occurred at the time when the contract of sale has entered into force. The other possibility would be to let the passing of the risk coincide with the time when the contract of sale is concluded, The former possibility might well be practical, since it is usually impossible to ascertain the condition of the goods while they are being carried. For this reason the 1980 UN Convention on Contracts for the International Sale of Goods Article 68 stipulates that "if the circumstances so indicate, the risk is assumed by the buyer from the time the goods were handed over to the carrier who issued the documents embodying the contract of carriage". There is, however, an exception to this rule when "the seller knew or ought to have known that the goods had been lost or damaged and did not disclose this to the buyer". Thus, the interpretation of a CFR- or CIF-Term with the addition of the word "afloat" will depend upon the law applicable to the contract of sale. The parties are advised to ascertain the applicade law and any solution which might follow therefrom. In case of doubt, the parties are advised to clarify the matter in their contract.
"INCOTERMS" AND THE CONTRACT OF CARRIAGE
15. It should be stressed that lncoterms only relate to trade terms used in the contract of sale and thus do not deal with terms - sometimes of the same or similar wording - which may be used in contracts of carriage, particularly as terms of various charterparties. Charterparty terms are usually more specific with respect to costs of loading and discharge and the time available for these operations (so-called "demurrage"-provisions). Parties to contracts of sale are advised to consider this problem by specific stipulations in their contracts of sale so that it is made clear as exactly as possible how much time would be available for the seller to load the goods on a ship or other means of conveyance provided by the buyer and for the buyer to receive the goods from the carrier at destination and, further, to specify to which extent the seller would have to bear the risk and cost of loading operations under the "F"-terms and discharging operations under the "C"-terms. The mere fact that the seller might have procured a contract of carriage, e.g. under the charterparty term "free out" whereby the carrier in the contract of carriage would be relieved from the discharging operations, does not necessarily mean that the risk and cost for such operations would fall upon the buyer under the contract of sale, since it might follow from the stipulations of the latter contract, or the custom of the port, that the contract of carriage procured by the seller should have included the discharging operations.
THE "ON BOARD REQUIREMENT" UNDER FOB, CFR AND CIF
16. The contract of carriage would determine the obligations of the shipper or the sender with respect to handing over the goods for carriage to the carrier. It should be noted that FOB, CFR and CIF all retain the traditional practice to deliver the goods on board the vessel. While, traditionally, the point for delivery of the goods according to the contract of sale coincided with the point for handing over the goods for carriage, contemporary transportation techniques create a considerable problem of "synchronisation" between the contract of carriage and the contract of sale. Nowadays goods are usually delivered by the seller to the carrier before the goods are taken on board or sometimes even before the ship has arrived in the seaport. In such cases, merchants are advised to use such "F"- or "C"-Terms which do not attach the handing over of the goods for carriage to shipment on board, namely FCA, CPT or CIP instead of FOB, CFR and CIF.
THE "D" TERMS (DAF, DES, DEQ, DDU AND DDP)
17. As has been said, the "D"-Terms are different in nature from the "C"-Terms, since the seller according to the "D"-Terms is responsible for the arrival of the goods at the agreed place or point of destination. The seller must bear all risks and costs in bringing the goods thereto. Hence, the "D"-Terms signify arrival contracts, while the "C"-Terms evidence shipment contracts. The "D"-Terms fall into two separate categories. Under DAF, DES and DDU the seller does not have to deliver the goods cleared for import, while under DEQ and DDP he would have to do so. Since DAF is frequently used in railway traffic, where it is practical to obtain a through document from the railway covering the entire transport to the final destination and to arrange insurance for the same period, DAF contains a stipulation in this respect in A.8.. It should be stressed, however, that the seller's duty to assist the buyer in obtainng such a through document of transport is done at the buyer's risk and expense. Similarly, any costs of insurance relating to the time subsequent to the seller's delivery of the goods at the frontier would be for the account of the buyer. The term DDU has been added in the present 1990 version of lncoterms. The term fulfils an important function whenever the seller is prepared to deliver the goods in the country of destination without clearing the goods for import and paying the duty. Whenever clearance for import does not present any problem such as within the European Common Market - the term may be quite desirable and appropriate. However, in countries where import clearance may be difficult and time consuming, it may be risky for the seller to undertake an obligation to deliver the goods beyond the customs clearance point. Although, according to DDU B.5. and B.6., the buyer would have to bear the additional risks and costs which might follow from his failure to fulfil his obligations to clear the goods for import, the seller is advised not to use the term DDU in countries where difficulties might be expected in clearing the goods for import.
THE BILL OF LADING AND EDI PROCEDURES
18. Traditionally, the on board bill of lading has been the only acceptable document to be presented by the seller under the terms CFR and CIF. The bill of lading fulfils three important functions, namely proof of delivery of the goods on board the vessel evidence of the contract of carriage a means of transferring rights to the goods in transit by the transfer of the paper document to another party. Transport documents other than the bill of lading would fulfil the two first mentioned functions, but would not control the delivery of the goods at destination or enable a buyer to sell the goods in transit by surrendering the paper document to his buyer. Instead, other transport documents would name the party entitled to receive the goods at destination. The fact that the possession of the bill of lading is required in order to obtain the goods from the carrier at destination makes it particularly difficult to replace by EDI-procedures. Further, it is customary to issue bills of lading ih several originals but it is, of course, of vital importance for a buyer or a bank acting upon his instructions in paying the seller to ensure that all originals are surrendered by the seller (so-called "full set"). This is also a requirement under the ICC Rules for Documentary Credits (the so-called Uniform Customs and Practice, "UCP"; ICC Publication 400). The transport document must evidence not only delivery of the goods to the carrier but also that the goods, as far as could be ascertained by the carrier, were received in good order and condition. Any notation on the transport document which would indicate that the goods had not been in such condition would make the document "unclean" and thus make it unacceptable under UCP (Art. 18; see also ICC Publication 473). In spite of the particular legal nature of the bill of lading it is expected that it will be replaced by EDI-procedures in the near future. The 1990 version of lncoterms has taken this expected development into proper account.
NON-NEGOTIABLE TRANSPORT DOCUMENTS INSTEAD OF BILLS OF LADING
19. In recent years, a considerable simplification of documentary practices has been achieved. Bills of lading are frequently replaced by non-negotiable documents similar to those which are used for other modes of transport than carriage by sea. These documents are called "sea waybills", "liner waybills", "freight receipts", or variants of such expressions. These non-negotiable documents are quite satisfactory to use except where the buyer wishes to sell the goods in transit by surrendering a paper document to the new buyer. In order to make this possible, the obligation of the seller to provide a bill of lading under CFR and CIF must necessarily be retained. However, when the contracting parties know that the buyer does not contemplate selling the goods in transit, they may specifically agree to relieve the seller from the obligation to provide a bill of lading, or, alternatively, they may use CPT and CIP where there is no requirement to provide a bill of lading.
MODE OF TRANSPORT AND THE APPROPIATE INCOTERM 1990
Any Mode of Transport including Multimodal
EXW
CPT
CIP
DAF
DDU
DDP
Ex Works (... named place) Free Carrier (... named place)
Carriage Paid To (... named place of destination)
Carriage and Insurance Paid To (... named place of destination)
Delivered At Frontier (... named place)
Delivered Duty Unpaid (... named place of destination)
Delivered Duty Paid (... named place of destination)
Air Transport
FCA
Free Carrier (... named place)
Rail Transport
FCA
Free Carrier (... named place)
Sea and Inland Waterway Transport
FAS
FOB
CFR
CIF
DES
DEQ
Free Alongside Ship (... named port of shipment)
Free On Board (... named port of shipment)
Cost and Freight (... named port of destination)
Cost, Insurance and Freight (... named port of destination)
Delivered Ex Ship (... named port of destination)
Delivered Ex Quay (... named port of destination)
MODE OF TRANSPORT AND THE APPROPRIATE INCOTERM 1990 THE RIGHT TO GIVE INSTRUCTIONS TO THE CARRIER
20. A buyer paying for the goods under a "C"-Term should ensure that the seller upon payment is prevented from disposing of the goods by new instructions to the carrier. Some transport documents used for particular modes of transport (air, road or rail) offer the contracting parties a possibility to estop the seller from giving such new instructions to the carrier by providing the buyer with a particular original or duplicate of the waybill. These waybills will have a "no-disposal" clause. However, the documents used instead of bills of lading for maritime carriage do not normally contain such an "estoppel" function. Work is in progress within the Comité Maritime International to remedy this shortcoming of the above-mentioned documents by introducing "Uniform Rules for Sea Waybills". However, until this work has materialised, and been followed through in practice, the buyer should avoid paying against these non-negotiable documents whenever he has any reason to mistrust his seller.
PASSING OF RISKS AND COSTS RELATING TO THE GOODS
21. The risk for loss of or damage to the goods, as well as the obligation to bear the costs relating to the goods, passes from the seller to the buyer when the seller has fulfilled his obligation to deliver the goods. Since the buyer should not be given the possibility to delay the passing of the risks and costs, all terms stipulate that the passing of risks and costs may occur even before delivery, if the buyer does not take delivery as agreed or fails to give such instructions (with respect to time for shipment and/or place for delivery) as the seller may require in order to fulfil his obligation to deliver the goods. It is a requirement for such premature passing of risk and costs that the goods have been identified as intended for the buyer or, as is stipulated in the terms, set aside for him (appropriation). This requirement is particularly important under EXW, since under all other terms the goods would normally have been identified as intended for the buyer when measures have been taken for their shipment or dispatch ("F"and "C"-Terms) or their delivery at destination ("D"-Terms). In exceptional cases, however, the goods may have been sent from the seller in bulk without identification of the quantity for each buyer and, if so, passing of risk and cost does not occur before the goods have been appropriated as aforesaid (cf. also Article 69.3 of the 1980 UN Convention on the International Sale of Goods).
REFERENCE TO INCOTERMS
22. Merchants wishing to use these rules should now specify that their contracts will be governed by "Incoterms 1990".
International Payments
Documentary Collections & Documentary Letters of Credit
Overview of Payment Methods
There are four common methods of international payment, each providing the buyer and the seller with varying degrees of protection for getting paid and for guaranteeing shipment of the goods.
Ranked in order of most security for the seller to most security for the buyer, they are:
1. Cash in Advance
2. Documentary Letters of Credit (L/C)
3. Documentary Collections (D/P and D/A)
4. Open Account
Cash in Advance
v Greatest security for seller
v Greatest risk for buyer
In cash in advance terms, the buyer simply prepays the seller prior to shipment of goods. Cash in advance terms are generally used in new relationships where transactions are small and the buyer has no choice but to prepay. These terms give maximum security to the seller but leave the buyer at great risk. Because the buyer has no guarantee that the goods will be shipped, there must be a high degree of trust in the seller's ability and willingness to follow through. The buyer must also consider the economic, political, and social stability of the seller's country, as these conditions may make it impossible for the seller to ship as promised.
Documentary Letters of Credit (L/C)
v Excellent security and equal: risk for both buyer and seller
v Added costs to buyer
v More involved than a Documentary Collection
A letter of credit is a bank's promise to pay a seller on behalf of the buyer so long as the seller meets certain terms and conditions stated in the credit. Documents are the key issue in letter of credit transactions. Banks act as intermediaries and have nothing to do with the goods themselves.
Letters of credit are the most common form of international payment because they provide a high degree of protection for both the buyer and the seller. The buyer specifies the documentation required from the seller before the bank is to make payment, and the seller is given assurance that payment will be received after shipping the goods so long as the documentation is in order.
Letters of Credit: Tips for Sellers
1. Before signing a contract, the seller should make inquiries about the buyer's creditworthiness and business practices. The seller's bank will generally assist in this investigation.
2. The seller should confirm the good standing of the buyer's bank if the credit is unconfirmed.
3. For confirmed credit, it should be determined that the seller's local bank is willing to confirm credits from the buyer and the buyer's bank.
4. The seller should carefully review the L/C to make sure its conditions can be met: specified schedules of shipment, type of goods to be sent, packaging, and documentation. All aspects of the L/C must be in conformance with the terms agreed upon, including the seller's address, the amount to be paid, and the prescribed transport route.
5. The seller must comply with every detail of the L/C specifications; otherwise the security given by the credit is lost.
6. The seller should ensure that the L/C is irrevocable.
7. If conditions of the credit have to be modified, the seller should contact the buyer immediately so that the buyer can instruct the issuing bank to make the necessary amendments.
8. The seller should confirm with the insurance company that it can provide the coverage specified in the credit and that insurance charges in the L/C are correct. Typical insurance coverage is for CIF (cost, insurance, freight) often the value of the goods plus about 10 percent.
9. The seller must ensure that the details of goods being sent comply with the description in the L/C and that the description on the invoice matches that on the L/C.
10. The seller should be familiar with foreign exchange limitations in the buyer's country that could hinder payment procedures.
Letters of Credit: Tips for Buyers
1. Before opening a letter of credit, the buyer should reach agreement with the seller on all particulars of payment procedures, schedules of shipment, type of goods to be sent, and documents to be supplied by the supplier.
2. When choosing the type of L/C to be used, the buyer should take into account standard payment methods in the country of the seller.
3. When opening a letter of credit, the buyer should keep the details of the purchase short and concise.
4. The buyer should be prepared to amend or renegotiate terms of the L/C with the seller. This is a common procedure in international trade. On irrevocable L/Cs, the most common type, amendments may be made only if all parties involved in the L/C agree.
5. The buyer can eliminate exchange risk involved with import credits in foreign currencies by purchasing foreign exchange on the forward markets.
6. The buyer should use a bank experienced in foreign trade as the L/C issuing bank.
7. The validation time stated on the L/C should give the seller ample time to produce the goods or to pull them out of stock.
8. The buyer should be aware that an L/C is not fail-safe. Banks are only responsible for the documents exchanged and not the goods shipped. Documents in conformity with L/C specifications cannot be rejected on grounds that the goods were not delivered as specified in the contract. The goods shipped may not in fact be the goods ordered and paid for.
9. Purchase contracts and other agreements pertaining to the sale between the buyer and seller are not the concern of the issuing bank. Only the terms of the L/C are binding on the bank.
10. Documents specified in the L/C should include those the buyer requires for customs clearance.
Types of Letters of Credit
Basic Letters of Credit
There are two basic forms of letters of credit: the Revocable Credit and the Irrevocable Credit. There are also two types of Irrevocable Credit: the Irrevocable Credit Not Confirmed and the Irrevocable Confirmed Credit. Each type of credit has advantages and disadvantages for the buyer and for the seller. Also note that the more the banks assume risk by guaranteeing payment, the more they will charge for providing the service.
Revocable Credit
Revocable credits may be modified or even canceled by the buyer without notice to the seller. As a result, they are generally unacceptable to the seller.
Irrevocable Credit
Irrevocable credits may not be modified or canceled by the buyer. The buyer's (issuing) bank must follow through with payment to the seller so long as the seller complies with the conditions listed in the credit. Changes in the credit must be approved by both the buyer and the seller. This is the most common form of credit used in international trade. There are two forms of irrevocable credits:
Unconfirmed credit (the irrevocable credit not confirmed by the advising bank)
In an unconfirmed credit the buyer's bank issuing the credit is the only party responsible for payment to the seller. The seller's bank is obliged to pay only after the payment from the buyer's bank is received. The seller's bank merely acts on behalf of the issuing bank and therefore incurs no risk.
Confirmed credit (the irrevocable, confirmed credit)
In a confirmed credit, the advising bank adds its guarantee to pay the seller to that of the buyer's (issuing) bank. If the buyer's bank fails to make payment, the seller's bank will pay. If a seller is unfamiliar with the buyer's bank issuing the letter of credit, an irrevocable, confirmed credit may be insisted upon. These credits may be used when trade is conducted in a high-risk area where there are fears of war or social, political, or financial instability. Confirmed credits may also be used by the seller to enlist the aid of a local bank to extend financing to help an order be filled. A confirmed credit costs more because the bank has added liability.
Special Letters of Credit
The following is a brief description of some special letters of credit.
Back-to-Back Letter of Credit
This is a new credit opened on the basis of an already existing, nontransferable credit. It is used by traders (middlemen) to make payment to the ultimate supplier. A trader receives a letter of credit from the buyer and then opens another letter of credit in favor of the supplier. The first letter of credit is used as collateral for the second credit. The second credit makes price adjustments from which come the trader's profit.
Deferred Payment (Usance) Letter of Credit
In Deferred Payment Letters of Credit, the buyer accepts the documents and agrees to pay the issuing bank after a fixed period of time. This credit gives the buyer a grace period for payment.
Red Clause Letter of Credit
Red Clause Letters of Credit are used to provide the seller with some funds prior to shipment to finance production of the goods. The credit may be advanced in part or in full, and the buyer's bank finances the advance payment. The buyer, in essence, extends financing to the seller and incurs ultimate risk for all advanced credits.
Revolving Letter of Credit
With a Revolving Letter of Credit, the issuing bank commits to restore the credit to the original amount once it has been used or drawn down. The credit also states the number of times it can be used and the period of validity. The credit can be cumulative, meaning sums can be added to the next installment, or non-cumulative, meaning partial amounts expire if not used in the time stated.
Standby Letter of Credit
This credit is basically a payment or performance guarantee used primarily in the United States. They are often called non-performing letters of credit because they are only used as a backup payment if the collection on a primary payment method is past due. Standby letters of credit can be used, for example, to guarantee repayment of loans, fulfillment by subcontractors, and securing the payment for goods delivered by third parties. The beneficiary to a standby letter of credit can draw from it on demand, so the buyer assumes added risk.
Transferable Letter of Credit
This type of credit allows the seller to transfer all or part of the proceeds of the original letter of credit to a second beneficiary, usually the ultimate supplier of the goods. This is a common financing tactic for middlemen and is used extensively in East Asia.
Basic Letters of Credit Procedure
A letter of credit is a document issued by a bank stating its commitment to pay someone (seller/exporter) a stated amount of money on behalf of a buyer (importer) so long as the seller meets very specific terms and conditions. Letters of credit are the most common method of making international payments because the risks of the transaction are shared by both the buyer and the seller.
The letter of credit process has been standardized by a set of rules published by the International Chamber of Commerce (ICC). These rules are called the Uniform Customs and Practice for Documentary Credits (UCP) and are contained in ICC Publication No. 500. The following is the basic set of steps used in a letter of credit transaction. Specific letter of credit transactions follow somewhat different procedures.
1. After the buyer and seller agree on the terms of a sale, the buyer arranges for his bank to open a letter of credit in favor of the seller. Note: The buyer will need to have a line of credit established at the bank or provide cash collateral for the amount of the L/C.
2. The buyer's bank (issuing bank) prepares the letter of credit, including all of the buyer's instructions to the seller concerning shipment and required documentation.
3. The buyer's bank sends the letter of credit to a correspondent bank (advising bank) in the seller's country. The seller may request that a particular bank be the advising bank, or the buyer's bank may select one of its correspondent banks in the seller's country. (Note: For the sake of simplicity in this example we will call this the seller's bank.)
4. The seller's bank forwards the letter of credit to the seller.
5. The seller carefully reviews all conditions the buyer has stipulated in the letter of credit. If the seller cannot comply with one or more of the provisions, the buyer is immediately notified and asked to make an amendment to the letter of credit.
6. After final terms are agreed upon, the seller prepares the goods and arranges for shipment to the appropriate port.
7. The seller ships the goods, and obtains a bill of lading and other documents as required by the buyer in the letter of credit. Some of these documents may need to be obtained prior to shipment.
8. The seller presents the documents to his (seller's) bank, indicating full compliance with the terms of the letter of credit. Required documents usually include a bill of lading, commercial invoice, certificate of origin, and possibly an inspection certificate.
9. The seller's bank reviews the documents. If they are in order, they are forwarded to the buyer's bank. If it is an irrevocable, confirmed letter of credit, the seller is guaranteed payment and may be paid immediately by his or her bank.
10. Once the buyer's bank receives the documents it notifies the buyer who then reviews them. If they are in order the buyer signs off, makes payment to the bank, and receives the documents which enable the holder to take possession of the shipment.
11. The buyer's bank initiates payment to the seller's bank, which pays the seller.
The transfer of funds from the buyer to the bank, from the buyer's bank to the seller's bank, and from the seller's bank to the seller may be handled at the same time as the exchange of documents, or under terms agreed upon in advance.
Issuance of a Letter of Credit
1. Buyer and seller agree on a purchase contract.
2. Buyer applies for and opens a letter of credit with his or her (issuing) bank.
3. Buyer's bank issues the letter of credit, forwarding it to advising (seller's) bank.
4. Seller's bank notifies seller of the letter of credit.
Amendment of a Letter of Credit
1. Seller requests a modification or amendment of any questionable terms in the letter of credit. If the terms are agreed upon.
2. Buyer issues order to his or her (buyer's) bank to make an amendment to the terms of the letter of credit.
3. Buyer's bank notifies seller's bank of amendment.
4. Seller's bank notifies seller of amendment.
Utilization of a Letter of Credit (Irrevocable, Confirmed)
Once the buyer opens a letter of credit at his bank and the seller receives notification of credit issuance, the following steps take place:
1. Seller ships goods to the buyer.
2. Seller forwards all documents (as stipulated in the letter of credit) to his bank. Once the documents are reviewed and accepted, buyer's bank pays seller for the goods.
3. Seller's bank forwards documents to buyer's bank. Once the documents are reviewed and accepted, buyer's bank pays seller's bank.
4. Buyer's bank forwards documents to buyer. Buyer makes payment or his or her account is debited.
Utilization
Opening a Letter of Credit
(Guidelines for the Buyer)
Level of Detail
The wording in a letter of credit should be simple, but specific. The more detailed an L/C is, the more likely the seller will reject it as too difficult to fulfill. At the same time, the buyer will wish to define in detail what is being paid for.
Although the L/C process is designed to ensure the satisfaction of all parties in the transaction, it cannot be considered a substitute for face-to-face agreements to do business in good faith. It should therefore contain only those stipulations required concerning the bank's involvement in the documentary process.
Type of Credit
L/Cs used in trade are usually either irrevocable, unconfirmed credits or irrevocable, confirmed credits. In choosing the type of L/C to open in favor of the seller, the buyer should take into consideration generally accepted payment processes in the seller's country, the value and demand for the goods to be shipped and the reputation of the seller.
Documents
In specifying documents required of the seller, it is very important to stipulate those that are required for customs clearance and those that reflect the agreement reached between the buyer and the seller. Required documents usually include the bill of lading, a commercial and/or consular invoice, the bill of exchange, the certificate of origin, and the insurance document. Other documents required may be an inspection certificate, copies of a cable sent to the buyer with shipping information, a confirmation from the shipping company of the state of its ship and a confirmation from the forwarder that the goods are accompanied by a certificate of origin. Prices should be stated in the currency of the L/C, and documents should be supplied in the language of the L/C.
Electronic Applications
It is becoming more and more common to apply for letters of credit electronically. Firms that open five or more letters of credit per month will find this to be a real time saver.
The process is rather simple. Your bank gives you a computer disk containing a software program. You open a new document (application), follow the prompts asking for information, and then send it to the bank via modem. You save courier costs and transit time. The program also saves you from having to re-enter repetitive transaction data.
The Letter of Credit Application
The following information should be included on an application form for opening an L/C:
1. Beneficiary
Always write the seller's company name and address completely and correctly. A simple mistake here may translate to inconsistent or improper documentation at the other end.
2. Amount
State the actual amount of the credit. You may state a maximum amount in a situation where actual count or quantity is in question. You also may use the words "approximate", "circa", or "about" to indicate an acceptable 10 percent plus or minus from the stated amount. If you use such wording you will need to be consistent and use it also in connection with the quantity.
3. Validity
The exporter will require time to prepare the shipment as well as the necessary documents. Make sure that the validity and period for document presentation following shipment of the goods is sufficiently long.
4. Beneficiary's Bank
Either name the seller's bank or leave blank to indicate that the issuing bank may freely select the correspondent bank.
5. Type of Payment Availability
Sight drafts, time drafts, or deferred payment may be used, as previously agreed to by the seller and buyer.
6. Desired Documents
The buyer specifies which documents are needed. Buyers can list, for example, a bill of lading, a commercial invoice, a certificate of origin, certificates of analysis, etc.
7. Notify Address
This is the address to notify upon the imminent arrival of goods at the port or airport of destination. Notification can also be used for damage of goods in shipment. An agent representing the buyer may be used.
8. Description of Goods
A short, precise description of the goods is given, along with quantity. Note the comments in #2 above concerning approximate amounts.
9. Confirmation Order
Foreign beneficiaries may insist on confirming the credit with the bank in their country.
Sample Letter of Credit Application
Common Problems in Letter of Credit Transactions
Most problems with letter of credit transactions have to do with the ability of the seller to fulfill obligations the buyer establishes in the original letter of credit. The seller may find the terms of the credit difficult or impossible to fulfill and either tries to fulfill them and fails, or asks the buyer for an amendment to the letter of credit. Since most letters of credit are irrevocable, amendments to the original letter of credit can only be made after further negotiations and agreement between the buyer and the seller. Sellers may have one or more of the following problems:
v Shipment schedule stipulated in the letter of credit cannot be met.
v Stipulations concerning freight costs are deemed unacceptable.
v Price is insufficient due to changes in exchange rates.
v Quantity of product ordered is not the expected amount.
v Description of product to be shipped is either insufficient or too detailed.
v Documents stipulated in the letter of credit are difficult or impossible to obtain.
Even when sellers accept the terms of a letter of credit, problems often arise at the stage in which banks review, or negotiate, the documents provided by the seller against the requirements specified in the letter of credit. If the documents are found not to be in accord with those specified in the letter of credit, the bank's commitment to pay is invalidated. In some cases the seller can correct the documents and present them within the time specified in the letter of credit. Or the advising bank may ask the issuing bank for authorization to accept the documents despite the discrepancies found.
Limits On Legal Obligations of Banks
It is important to note once again that banks deal in documents and not in goods. Only the wording of the credit is binding on the bank. Banks are not responsible for verifying the authenticity of the documents, nor for the quality or quantity of the goods being shipped. As long as the documents comply with the terms specified in the letter of credit, banks may accept them and initiate the payment process as stipulated in the letter of credit. Banks are free from liability for delays in sending messages caused by another party, consequences of Acts of God, or the acts of third parties whom they have instructed to carry out transactions.
Documentary Collections
v Good security and almost: equal risk for buyer and seller
v Less costly than a L/C
v Easier to use than a L/C
A documentary collection is like an international cash on delivery (COD), but with a few twists. The exporter ships goods to the importer, but forwards shipping documents (including title document) to the remitting bank for transmission to the buyer's bank. The buyer's bank is instructed not to transfer the documents to the buyer until payment is made (Documents against Payment, D/P) or upon guarantee that payment will be made within a specified period of time (Documents against Acceptance, D/A). Once in possession of the documentation, the buyer may take ownership of the shipment.
D/P and D/A terms are commonly used in ongoing business relationships and provide a measure of protection for both parties. The buyer and seller both assume risk in the transaction, however, ranging from refusal on the part of the buyer to pay for the documents to the seller's shipping of unacceptable goods.
In a documentary collection banks act as intermediaries to collect payment from the buyer in exchange for the transfer of documents which enable the holder to take possession of the goods. The procedure is easier than a letter of credit and bank charges are lower.
Basic Documentary Collection Procedure
The documentary collection procedure has been standardized by a set of rules published by the International Chamber of Commerce (ICC). These are called the Uniform Rules for Collections (URC). The basic procedure involves the step-by-step exchanging of documents giving title to the goods for either cash or a contracted promise to pay at a later time.
The seller (also called the remitter) ships the goods and presents the documents (such as the bill of lading, invoices, and certificate of origin) to his bank (also called the remitting bank), which then forwards them to the buyer's bank (also called the collecting bank). The buyer then pays his bank the sum due, receives the documents and takes possession of the goods.
Types of Collections
There are three types of documentary collections. The basic procedure is the same for all except that the buyer has different payment options which the seller must agree to before shipment. In each case the buyer may take possession of the goods only by presenting the documentation including the bill of lading to customs and shipping authorities.
Documents against Payment (D/P)
In D/P terms the buyer receives the title documents only after making payment at the bank.
Documents against Acceptance (D/A)
In D/A terms the buyer receives the title and other documents after signing a time draft at the bank promising to pay at a later date.
Acceptance Documents Against Payment (Acceptance D/P)
In Acceptance D/P terms the buyer signs a time draft for payment at a later date. However, the documents are transferred only after the time draft reaches maturity. In essence, the goods remain in escrow until payment has been made.
Risks for Buyers
The main risk for buyers is that the goods shipped might not conform to the goods specified. In such a case the buyer will have to seek recourse with the seller, because banks deal only in documents and not in goods.
Risks for Sellers
Risks to the seller center around the fact that payment is not made until after the goods are shipped. Specific risks are as follows:
1. The seller assumes insurance and storage liability while the goods are in transit until payment/acceptance takes place.
2. The buyer may not pay for the documents. While the goods remain in the legal possession of the seller, he may be stuck with them in an unfavorable situation. Also, the seller has no legal basis to file claim against the buyer. At this point the seller may have the goods returned or try to sell the goods to another buyer. If no action is taken, the goods will be auctioned or otherwise disposed of by customs.
A seller should only agree to payment by documentary collection if:
1. The seller does not doubt the buyer's ability and willingness to pay for the goods;
2. The buyer's country is politically, economically, and legally stable;
3. There are no foreign exchange restrictions in the buyer's country, or all licenses for foreign exchange have already been obtained; and
5. The shipped goods are easily marketable.
Documentary Collection: Tips for Sellers
1. The seller assumes risk because the goods are shipped before receipt of payment. Buyer has no legal obligation to pay for or to accept the goods.
2. Before agreeing to a documentary collection, the seller should check on the buyer's creditworthiness and business reputation.
3. The seller should make sure the buyer's country is politically and financially stable.
4. The seller should find out from the buyer what documents are required for customs clearance in the buyer's country.
5. The seller should assemble the documents carefully and make sure they are in the required form and endorsed as necessary.
6. As a rule, the seller's bank will not review the documents before forwarding them to the buyer's bank. This is the responsibility of the seller.
7. The goods travel and are stored at the risk of the seller until payment or acceptance.
8. If the buyer refuses acceptance or payment for the documents, the seller retains ownership. The seller may have the goods shipped back or try to sell them to another buyer in the region.
9. If the buyer takes no action, customs authorities may seize the goods and auction them off or otherwise dispose of them.
10. Because goods may be refused, the seller should only ship goods which are readily marketable to other sources.
Documentary Collection: Tips for Buyers
1. The buyer is generally in a secure position because ownership or responsibility for goods do not have to assumed until documents have been paid or a time draft signed.
2. The buyer may specify a certificate of inspection as part of the required documentation. The buyer may not sample or inspect the goods before accepting and paying for the documents without authorization from the seller.
3. As a special favor, the collecting bank can allow buyers to inspect the documents before payment. The collecting bank assumes responsibility for the documents until redemption.
4. In the above case, the buyer should immediately return the entire set of documents to the collecting bank if the buyer cannot meet the agreed upon payment procedure.
5. The buyer assumes no liability for goods if there is a refusal to take possession of the documents.
6. Partial payment in exchange for the documents is not allowed unless authorized in the collection order.
7. With documents against acceptance, the buyer may receive the goods and resell them for profit before the time draft matures, thereby using the proceeds of the sale to pay for the goods. The buyer is responsible for payment, however, even if the goods cannot be sold.
Open Account
v Least risk for buyer
v Greatest risk for seller
This is an agreement by the buyer to pay for goods within a designated time after the shipment, usually in 30, 60, or 90 days. Open account terms give maximum security to the buyer and greatest risk to the seller. This form of payment is used only when the seller has significant trust and faith in the buyer's ability and willingness to pay once the goods have been shipped. The seller must also consider the economic, political, and social stability of the buyer's country as these conditions may make it impossible for the buyer to pay as promised.
International Payments Glossary
Documents in International Trade
The following is a list and description of some of the more common documents importers and exporters encounter in the course of international trade. For the importer/buyer this serves as a checklist of documents to consider requiring of the seller/exporter in a letter of credit or documentary collections transaction.
air waybill: A bill of lading issued for air shipment of goods, which is always made out in straight, non-negotiable form. It serves as a receipt for the shipper and needs to be made out to someone who can take possession of the goods upon arrival--without waiting for other documents to arrive. See bill of lading.
bill of lading: A document issued by a transportation company (such as a shipping line) to the shipper (consignor) that serves as a receipt for goods shipped and a contract for delivery. A bill of lading may also serve as a title document. A bill of lading, therefore, is both a receipt for merchandise-shipped and a contract to deliver it as freight to the consignee. The major types are: straight (non-negotiable) bill of lading, order (negotiable or "shippers order") bill of lading, air waybill and overland/inland bill of lading.
certificate of origin: A document certifying the country of origin of the goods. Because a certificate of origin is often required by customs for entry, a buyer will often stipulate in the letter of credit that a certificate of origin is a required document. The Certificate of Origin Form A is the official certificate of origin required for imports of products under the GSP (Generalized System of Preferences) and other tariff reduction programs.
certificate of manufacture: A document in which the producer of goods certifies that production has been completed and that the goods are at the disposal of the buyer.
consular invoice: An invoice prepared on a special form supplied by the consul of an importing country, in the language of the importing country, and certified by a consular official of the foreign country of origin.
dock receipt: A document/receipt issued by an ocean carrier when the seller/exporter is not responsible for moving the goods to the final destination, but only to a dock in the exporting country. The document/receipt indicates that the goods were, in fact, delivered and received at the specified dock.
export license: A document, issued by a government agency, giving authorization to export certain commodities to specified countries.
import license: A document, issued by a government agency, giving authorization to import certain commodities.
inspection certificate: An affidavit signed by the seller/exporter or an independent inspection firm (as required by the buyer/importer), confirming that merchandise meets certain specifications.
insurance document: A document certifying that goods are insured for shipment.
invoice/commercial invoice: A document identifying the seller and buyer of goods or services, identifying items such as: invoice number, date, shipping date, mode of transport, delivery and payment terms, and a complete listing and description of the goods or services being sold including prices, discounts, and quantities. The commercial invoice is usually used by customs to determine the true cost of goods when assessing duty.
order (negotiable or "shippers order") bill of lading: This is a title document which must be in the possession of the consignee (buyer/ importer) in order to take possession of the shipped goods. Because this bill of lading is negotiable, it is usually made out "to the order of" the consignor (seller/exporter). See bill of lading.
overland/inland bill of lading: Similar to an air waybill, except that it covers ground or water transport. See bill of lading.
packing list: A document listing the merchandise contained in a particular box, crate, or container, plus type, dimensions, and weight of the container.
phytosanitary (plant health) inspection certificate: A document certifying that an export shipment has been inspected and is free from pests and plant diseases considered harmful by the importing country.
shipper's export declaration: A form prepared by a shipper/exporter indicating the value, weight, destination and other information about an export shipment.
straight (non-negotiable) bill of lading: Indicates that the shipper will deliver the goods to the consignee. The document itself does not give title to the goods. The consignee need only to provide identification to claim the goods. A straight bill of lading is often used when the goods have been paid for in advance. See bill of lading.
Documentary Collections & Documentary Letters of Credit
Overview of Payment Methods
There are four common methods of international payment, each providing the buyer and the seller with varying degrees of protection for getting paid and for guaranteeing shipment of the goods.
Ranked in order of most security for the seller to most security for the buyer, they are:
1. Cash in Advance
2. Documentary Letters of Credit (L/C)
3. Documentary Collections (D/P and D/A)
4. Open Account
Cash in Advance
v Greatest security for seller
v Greatest risk for buyer
In cash in advance terms, the buyer simply prepays the seller prior to shipment of goods. Cash in advance terms are generally used in new relationships where transactions are small and the buyer has no choice but to prepay. These terms give maximum security to the seller but leave the buyer at great risk. Because the buyer has no guarantee that the goods will be shipped, there must be a high degree of trust in the seller's ability and willingness to follow through. The buyer must also consider the economic, political, and social stability of the seller's country, as these conditions may make it impossible for the seller to ship as promised.
Documentary Letters of Credit (L/C)
v Excellent security and equal: risk for both buyer and seller
v Added costs to buyer
v More involved than a Documentary Collection
A letter of credit is a bank's promise to pay a seller on behalf of the buyer so long as the seller meets certain terms and conditions stated in the credit. Documents are the key issue in letter of credit transactions. Banks act as intermediaries and have nothing to do with the goods themselves.
Letters of credit are the most common form of international payment because they provide a high degree of protection for both the buyer and the seller. The buyer specifies the documentation required from the seller before the bank is to make payment, and the seller is given assurance that payment will be received after shipping the goods so long as the documentation is in order.
Letters of Credit: Tips for Sellers
1. Before signing a contract, the seller should make inquiries about the buyer's creditworthiness and business practices. The seller's bank will generally assist in this investigation.
2. The seller should confirm the good standing of the buyer's bank if the credit is unconfirmed.
3. For confirmed credit, it should be determined that the seller's local bank is willing to confirm credits from the buyer and the buyer's bank.
4. The seller should carefully review the L/C to make sure its conditions can be met: specified schedules of shipment, type of goods to be sent, packaging, and documentation. All aspects of the L/C must be in conformance with the terms agreed upon, including the seller's address, the amount to be paid, and the prescribed transport route.
5. The seller must comply with every detail of the L/C specifications; otherwise the security given by the credit is lost.
6. The seller should ensure that the L/C is irrevocable.
7. If conditions of the credit have to be modified, the seller should contact the buyer immediately so that the buyer can instruct the issuing bank to make the necessary amendments.
8. The seller should confirm with the insurance company that it can provide the coverage specified in the credit and that insurance charges in the L/C are correct. Typical insurance coverage is for CIF (cost, insurance, freight) often the value of the goods plus about 10 percent.
9. The seller must ensure that the details of goods being sent comply with the description in the L/C and that the description on the invoice matches that on the L/C.
10. The seller should be familiar with foreign exchange limitations in the buyer's country that could hinder payment procedures.
Letters of Credit: Tips for Buyers
1. Before opening a letter of credit, the buyer should reach agreement with the seller on all particulars of payment procedures, schedules of shipment, type of goods to be sent, and documents to be supplied by the supplier.
2. When choosing the type of L/C to be used, the buyer should take into account standard payment methods in the country of the seller.
3. When opening a letter of credit, the buyer should keep the details of the purchase short and concise.
4. The buyer should be prepared to amend or renegotiate terms of the L/C with the seller. This is a common procedure in international trade. On irrevocable L/Cs, the most common type, amendments may be made only if all parties involved in the L/C agree.
5. The buyer can eliminate exchange risk involved with import credits in foreign currencies by purchasing foreign exchange on the forward markets.
6. The buyer should use a bank experienced in foreign trade as the L/C issuing bank.
7. The validation time stated on the L/C should give the seller ample time to produce the goods or to pull them out of stock.
8. The buyer should be aware that an L/C is not fail-safe. Banks are only responsible for the documents exchanged and not the goods shipped. Documents in conformity with L/C specifications cannot be rejected on grounds that the goods were not delivered as specified in the contract. The goods shipped may not in fact be the goods ordered and paid for.
9. Purchase contracts and other agreements pertaining to the sale between the buyer and seller are not the concern of the issuing bank. Only the terms of the L/C are binding on the bank.
10. Documents specified in the L/C should include those the buyer requires for customs clearance.
Types of Letters of Credit
Basic Letters of Credit
There are two basic forms of letters of credit: the Revocable Credit and the Irrevocable Credit. There are also two types of Irrevocable Credit: the Irrevocable Credit Not Confirmed and the Irrevocable Confirmed Credit. Each type of credit has advantages and disadvantages for the buyer and for the seller. Also note that the more the banks assume risk by guaranteeing payment, the more they will charge for providing the service.
Revocable Credit
Revocable credits may be modified or even canceled by the buyer without notice to the seller. As a result, they are generally unacceptable to the seller.
Irrevocable Credit
Irrevocable credits may not be modified or canceled by the buyer. The buyer's (issuing) bank must follow through with payment to the seller so long as the seller complies with the conditions listed in the credit. Changes in the credit must be approved by both the buyer and the seller. This is the most common form of credit used in international trade. There are two forms of irrevocable credits:
Unconfirmed credit (the irrevocable credit not confirmed by the advising bank)
In an unconfirmed credit the buyer's bank issuing the credit is the only party responsible for payment to the seller. The seller's bank is obliged to pay only after the payment from the buyer's bank is received. The seller's bank merely acts on behalf of the issuing bank and therefore incurs no risk.
Confirmed credit (the irrevocable, confirmed credit)
In a confirmed credit, the advising bank adds its guarantee to pay the seller to that of the buyer's (issuing) bank. If the buyer's bank fails to make payment, the seller's bank will pay. If a seller is unfamiliar with the buyer's bank issuing the letter of credit, an irrevocable, confirmed credit may be insisted upon. These credits may be used when trade is conducted in a high-risk area where there are fears of war or social, political, or financial instability. Confirmed credits may also be used by the seller to enlist the aid of a local bank to extend financing to help an order be filled. A confirmed credit costs more because the bank has added liability.
Special Letters of Credit
The following is a brief description of some special letters of credit.
Back-to-Back Letter of Credit
This is a new credit opened on the basis of an already existing, nontransferable credit. It is used by traders (middlemen) to make payment to the ultimate supplier. A trader receives a letter of credit from the buyer and then opens another letter of credit in favor of the supplier. The first letter of credit is used as collateral for the second credit. The second credit makes price adjustments from which come the trader's profit.
Deferred Payment (Usance) Letter of Credit
In Deferred Payment Letters of Credit, the buyer accepts the documents and agrees to pay the issuing bank after a fixed period of time. This credit gives the buyer a grace period for payment.
Red Clause Letter of Credit
Red Clause Letters of Credit are used to provide the seller with some funds prior to shipment to finance production of the goods. The credit may be advanced in part or in full, and the buyer's bank finances the advance payment. The buyer, in essence, extends financing to the seller and incurs ultimate risk for all advanced credits.
Revolving Letter of Credit
With a Revolving Letter of Credit, the issuing bank commits to restore the credit to the original amount once it has been used or drawn down. The credit also states the number of times it can be used and the period of validity. The credit can be cumulative, meaning sums can be added to the next installment, or non-cumulative, meaning partial amounts expire if not used in the time stated.
Standby Letter of Credit
This credit is basically a payment or performance guarantee used primarily in the United States. They are often called non-performing letters of credit because they are only used as a backup payment if the collection on a primary payment method is past due. Standby letters of credit can be used, for example, to guarantee repayment of loans, fulfillment by subcontractors, and securing the payment for goods delivered by third parties. The beneficiary to a standby letter of credit can draw from it on demand, so the buyer assumes added risk.
Transferable Letter of Credit
This type of credit allows the seller to transfer all or part of the proceeds of the original letter of credit to a second beneficiary, usually the ultimate supplier of the goods. This is a common financing tactic for middlemen and is used extensively in East Asia.
Basic Letters of Credit Procedure
A letter of credit is a document issued by a bank stating its commitment to pay someone (seller/exporter) a stated amount of money on behalf of a buyer (importer) so long as the seller meets very specific terms and conditions. Letters of credit are the most common method of making international payments because the risks of the transaction are shared by both the buyer and the seller.
The letter of credit process has been standardized by a set of rules published by the International Chamber of Commerce (ICC). These rules are called the Uniform Customs and Practice for Documentary Credits (UCP) and are contained in ICC Publication No. 500. The following is the basic set of steps used in a letter of credit transaction. Specific letter of credit transactions follow somewhat different procedures.
1. After the buyer and seller agree on the terms of a sale, the buyer arranges for his bank to open a letter of credit in favor of the seller. Note: The buyer will need to have a line of credit established at the bank or provide cash collateral for the amount of the L/C.
2. The buyer's bank (issuing bank) prepares the letter of credit, including all of the buyer's instructions to the seller concerning shipment and required documentation.
3. The buyer's bank sends the letter of credit to a correspondent bank (advising bank) in the seller's country. The seller may request that a particular bank be the advising bank, or the buyer's bank may select one of its correspondent banks in the seller's country. (Note: For the sake of simplicity in this example we will call this the seller's bank.)
4. The seller's bank forwards the letter of credit to the seller.
5. The seller carefully reviews all conditions the buyer has stipulated in the letter of credit. If the seller cannot comply with one or more of the provisions, the buyer is immediately notified and asked to make an amendment to the letter of credit.
6. After final terms are agreed upon, the seller prepares the goods and arranges for shipment to the appropriate port.
7. The seller ships the goods, and obtains a bill of lading and other documents as required by the buyer in the letter of credit. Some of these documents may need to be obtained prior to shipment.
8. The seller presents the documents to his (seller's) bank, indicating full compliance with the terms of the letter of credit. Required documents usually include a bill of lading, commercial invoice, certificate of origin, and possibly an inspection certificate.
9. The seller's bank reviews the documents. If they are in order, they are forwarded to the buyer's bank. If it is an irrevocable, confirmed letter of credit, the seller is guaranteed payment and may be paid immediately by his or her bank.
10. Once the buyer's bank receives the documents it notifies the buyer who then reviews them. If they are in order the buyer signs off, makes payment to the bank, and receives the documents which enable the holder to take possession of the shipment.
11. The buyer's bank initiates payment to the seller's bank, which pays the seller.
The transfer of funds from the buyer to the bank, from the buyer's bank to the seller's bank, and from the seller's bank to the seller may be handled at the same time as the exchange of documents, or under terms agreed upon in advance.
Issuance of a Letter of Credit
1. Buyer and seller agree on a purchase contract.
2. Buyer applies for and opens a letter of credit with his or her (issuing) bank.
3. Buyer's bank issues the letter of credit, forwarding it to advising (seller's) bank.
4. Seller's bank notifies seller of the letter of credit.
Amendment of a Letter of Credit
1. Seller requests a modification or amendment of any questionable terms in the letter of credit. If the terms are agreed upon.
2. Buyer issues order to his or her (buyer's) bank to make an amendment to the terms of the letter of credit.
3. Buyer's bank notifies seller's bank of amendment.
4. Seller's bank notifies seller of amendment.
Utilization of a Letter of Credit (Irrevocable, Confirmed)
Once the buyer opens a letter of credit at his bank and the seller receives notification of credit issuance, the following steps take place:
1. Seller ships goods to the buyer.
2. Seller forwards all documents (as stipulated in the letter of credit) to his bank. Once the documents are reviewed and accepted, buyer's bank pays seller for the goods.
3. Seller's bank forwards documents to buyer's bank. Once the documents are reviewed and accepted, buyer's bank pays seller's bank.
4. Buyer's bank forwards documents to buyer. Buyer makes payment or his or her account is debited.
Utilization
Opening a Letter of Credit
(Guidelines for the Buyer)
Level of Detail
The wording in a letter of credit should be simple, but specific. The more detailed an L/C is, the more likely the seller will reject it as too difficult to fulfill. At the same time, the buyer will wish to define in detail what is being paid for.
Although the L/C process is designed to ensure the satisfaction of all parties in the transaction, it cannot be considered a substitute for face-to-face agreements to do business in good faith. It should therefore contain only those stipulations required concerning the bank's involvement in the documentary process.
Type of Credit
L/Cs used in trade are usually either irrevocable, unconfirmed credits or irrevocable, confirmed credits. In choosing the type of L/C to open in favor of the seller, the buyer should take into consideration generally accepted payment processes in the seller's country, the value and demand for the goods to be shipped and the reputation of the seller.
Documents
In specifying documents required of the seller, it is very important to stipulate those that are required for customs clearance and those that reflect the agreement reached between the buyer and the seller. Required documents usually include the bill of lading, a commercial and/or consular invoice, the bill of exchange, the certificate of origin, and the insurance document. Other documents required may be an inspection certificate, copies of a cable sent to the buyer with shipping information, a confirmation from the shipping company of the state of its ship and a confirmation from the forwarder that the goods are accompanied by a certificate of origin. Prices should be stated in the currency of the L/C, and documents should be supplied in the language of the L/C.
Electronic Applications
It is becoming more and more common to apply for letters of credit electronically. Firms that open five or more letters of credit per month will find this to be a real time saver.
The process is rather simple. Your bank gives you a computer disk containing a software program. You open a new document (application), follow the prompts asking for information, and then send it to the bank via modem. You save courier costs and transit time. The program also saves you from having to re-enter repetitive transaction data.
The Letter of Credit Application
The following information should be included on an application form for opening an L/C:
1. Beneficiary
Always write the seller's company name and address completely and correctly. A simple mistake here may translate to inconsistent or improper documentation at the other end.
2. Amount
State the actual amount of the credit. You may state a maximum amount in a situation where actual count or quantity is in question. You also may use the words "approximate", "circa", or "about" to indicate an acceptable 10 percent plus or minus from the stated amount. If you use such wording you will need to be consistent and use it also in connection with the quantity.
3. Validity
The exporter will require time to prepare the shipment as well as the necessary documents. Make sure that the validity and period for document presentation following shipment of the goods is sufficiently long.
4. Beneficiary's Bank
Either name the seller's bank or leave blank to indicate that the issuing bank may freely select the correspondent bank.
5. Type of Payment Availability
Sight drafts, time drafts, or deferred payment may be used, as previously agreed to by the seller and buyer.
6. Desired Documents
The buyer specifies which documents are needed. Buyers can list, for example, a bill of lading, a commercial invoice, a certificate of origin, certificates of analysis, etc.
7. Notify Address
This is the address to notify upon the imminent arrival of goods at the port or airport of destination. Notification can also be used for damage of goods in shipment. An agent representing the buyer may be used.
8. Description of Goods
A short, precise description of the goods is given, along with quantity. Note the comments in #2 above concerning approximate amounts.
9. Confirmation Order
Foreign beneficiaries may insist on confirming the credit with the bank in their country.
Sample Letter of Credit Application
Common Problems in Letter of Credit Transactions
Most problems with letter of credit transactions have to do with the ability of the seller to fulfill obligations the buyer establishes in the original letter of credit. The seller may find the terms of the credit difficult or impossible to fulfill and either tries to fulfill them and fails, or asks the buyer for an amendment to the letter of credit. Since most letters of credit are irrevocable, amendments to the original letter of credit can only be made after further negotiations and agreement between the buyer and the seller. Sellers may have one or more of the following problems:
v Shipment schedule stipulated in the letter of credit cannot be met.
v Stipulations concerning freight costs are deemed unacceptable.
v Price is insufficient due to changes in exchange rates.
v Quantity of product ordered is not the expected amount.
v Description of product to be shipped is either insufficient or too detailed.
v Documents stipulated in the letter of credit are difficult or impossible to obtain.
Even when sellers accept the terms of a letter of credit, problems often arise at the stage in which banks review, or negotiate, the documents provided by the seller against the requirements specified in the letter of credit. If the documents are found not to be in accord with those specified in the letter of credit, the bank's commitment to pay is invalidated. In some cases the seller can correct the documents and present them within the time specified in the letter of credit. Or the advising bank may ask the issuing bank for authorization to accept the documents despite the discrepancies found.
Limits On Legal Obligations of Banks
It is important to note once again that banks deal in documents and not in goods. Only the wording of the credit is binding on the bank. Banks are not responsible for verifying the authenticity of the documents, nor for the quality or quantity of the goods being shipped. As long as the documents comply with the terms specified in the letter of credit, banks may accept them and initiate the payment process as stipulated in the letter of credit. Banks are free from liability for delays in sending messages caused by another party, consequences of Acts of God, or the acts of third parties whom they have instructed to carry out transactions.
Documentary Collections
v Good security and almost: equal risk for buyer and seller
v Less costly than a L/C
v Easier to use than a L/C
A documentary collection is like an international cash on delivery (COD), but with a few twists. The exporter ships goods to the importer, but forwards shipping documents (including title document) to the remitting bank for transmission to the buyer's bank. The buyer's bank is instructed not to transfer the documents to the buyer until payment is made (Documents against Payment, D/P) or upon guarantee that payment will be made within a specified period of time (Documents against Acceptance, D/A). Once in possession of the documentation, the buyer may take ownership of the shipment.
D/P and D/A terms are commonly used in ongoing business relationships and provide a measure of protection for both parties. The buyer and seller both assume risk in the transaction, however, ranging from refusal on the part of the buyer to pay for the documents to the seller's shipping of unacceptable goods.
In a documentary collection banks act as intermediaries to collect payment from the buyer in exchange for the transfer of documents which enable the holder to take possession of the goods. The procedure is easier than a letter of credit and bank charges are lower.
Basic Documentary Collection Procedure
The documentary collection procedure has been standardized by a set of rules published by the International Chamber of Commerce (ICC). These are called the Uniform Rules for Collections (URC). The basic procedure involves the step-by-step exchanging of documents giving title to the goods for either cash or a contracted promise to pay at a later time.
The seller (also called the remitter) ships the goods and presents the documents (such as the bill of lading, invoices, and certificate of origin) to his bank (also called the remitting bank), which then forwards them to the buyer's bank (also called the collecting bank). The buyer then pays his bank the sum due, receives the documents and takes possession of the goods.
Types of Collections
There are three types of documentary collections. The basic procedure is the same for all except that the buyer has different payment options which the seller must agree to before shipment. In each case the buyer may take possession of the goods only by presenting the documentation including the bill of lading to customs and shipping authorities.
Documents against Payment (D/P)
In D/P terms the buyer receives the title documents only after making payment at the bank.
Documents against Acceptance (D/A)
In D/A terms the buyer receives the title and other documents after signing a time draft at the bank promising to pay at a later date.
Acceptance Documents Against Payment (Acceptance D/P)
In Acceptance D/P terms the buyer signs a time draft for payment at a later date. However, the documents are transferred only after the time draft reaches maturity. In essence, the goods remain in escrow until payment has been made.
Risks for Buyers
The main risk for buyers is that the goods shipped might not conform to the goods specified. In such a case the buyer will have to seek recourse with the seller, because banks deal only in documents and not in goods.
Risks for Sellers
Risks to the seller center around the fact that payment is not made until after the goods are shipped. Specific risks are as follows:
1. The seller assumes insurance and storage liability while the goods are in transit until payment/acceptance takes place.
2. The buyer may not pay for the documents. While the goods remain in the legal possession of the seller, he may be stuck with them in an unfavorable situation. Also, the seller has no legal basis to file claim against the buyer. At this point the seller may have the goods returned or try to sell the goods to another buyer. If no action is taken, the goods will be auctioned or otherwise disposed of by customs.
A seller should only agree to payment by documentary collection if:
1. The seller does not doubt the buyer's ability and willingness to pay for the goods;
2. The buyer's country is politically, economically, and legally stable;
3. There are no foreign exchange restrictions in the buyer's country, or all licenses for foreign exchange have already been obtained; and
5. The shipped goods are easily marketable.
Documentary Collection: Tips for Sellers
1. The seller assumes risk because the goods are shipped before receipt of payment. Buyer has no legal obligation to pay for or to accept the goods.
2. Before agreeing to a documentary collection, the seller should check on the buyer's creditworthiness and business reputation.
3. The seller should make sure the buyer's country is politically and financially stable.
4. The seller should find out from the buyer what documents are required for customs clearance in the buyer's country.
5. The seller should assemble the documents carefully and make sure they are in the required form and endorsed as necessary.
6. As a rule, the seller's bank will not review the documents before forwarding them to the buyer's bank. This is the responsibility of the seller.
7. The goods travel and are stored at the risk of the seller until payment or acceptance.
8. If the buyer refuses acceptance or payment for the documents, the seller retains ownership. The seller may have the goods shipped back or try to sell them to another buyer in the region.
9. If the buyer takes no action, customs authorities may seize the goods and auction them off or otherwise dispose of them.
10. Because goods may be refused, the seller should only ship goods which are readily marketable to other sources.
Documentary Collection: Tips for Buyers
1. The buyer is generally in a secure position because ownership or responsibility for goods do not have to assumed until documents have been paid or a time draft signed.
2. The buyer may specify a certificate of inspection as part of the required documentation. The buyer may not sample or inspect the goods before accepting and paying for the documents without authorization from the seller.
3. As a special favor, the collecting bank can allow buyers to inspect the documents before payment. The collecting bank assumes responsibility for the documents until redemption.
4. In the above case, the buyer should immediately return the entire set of documents to the collecting bank if the buyer cannot meet the agreed upon payment procedure.
5. The buyer assumes no liability for goods if there is a refusal to take possession of the documents.
6. Partial payment in exchange for the documents is not allowed unless authorized in the collection order.
7. With documents against acceptance, the buyer may receive the goods and resell them for profit before the time draft matures, thereby using the proceeds of the sale to pay for the goods. The buyer is responsible for payment, however, even if the goods cannot be sold.
Open Account
v Least risk for buyer
v Greatest risk for seller
This is an agreement by the buyer to pay for goods within a designated time after the shipment, usually in 30, 60, or 90 days. Open account terms give maximum security to the buyer and greatest risk to the seller. This form of payment is used only when the seller has significant trust and faith in the buyer's ability and willingness to pay once the goods have been shipped. The seller must also consider the economic, political, and social stability of the buyer's country as these conditions may make it impossible for the buyer to pay as promised.
International Payments Glossary
Documents in International Trade
The following is a list and description of some of the more common documents importers and exporters encounter in the course of international trade. For the importer/buyer this serves as a checklist of documents to consider requiring of the seller/exporter in a letter of credit or documentary collections transaction.
air waybill: A bill of lading issued for air shipment of goods, which is always made out in straight, non-negotiable form. It serves as a receipt for the shipper and needs to be made out to someone who can take possession of the goods upon arrival--without waiting for other documents to arrive. See bill of lading.
bill of lading: A document issued by a transportation company (such as a shipping line) to the shipper (consignor) that serves as a receipt for goods shipped and a contract for delivery. A bill of lading may also serve as a title document. A bill of lading, therefore, is both a receipt for merchandise-shipped and a contract to deliver it as freight to the consignee. The major types are: straight (non-negotiable) bill of lading, order (negotiable or "shippers order") bill of lading, air waybill and overland/inland bill of lading.
certificate of origin: A document certifying the country of origin of the goods. Because a certificate of origin is often required by customs for entry, a buyer will often stipulate in the letter of credit that a certificate of origin is a required document. The Certificate of Origin Form A is the official certificate of origin required for imports of products under the GSP (Generalized System of Preferences) and other tariff reduction programs.
certificate of manufacture: A document in which the producer of goods certifies that production has been completed and that the goods are at the disposal of the buyer.
consular invoice: An invoice prepared on a special form supplied by the consul of an importing country, in the language of the importing country, and certified by a consular official of the foreign country of origin.
dock receipt: A document/receipt issued by an ocean carrier when the seller/exporter is not responsible for moving the goods to the final destination, but only to a dock in the exporting country. The document/receipt indicates that the goods were, in fact, delivered and received at the specified dock.
export license: A document, issued by a government agency, giving authorization to export certain commodities to specified countries.
import license: A document, issued by a government agency, giving authorization to import certain commodities.
inspection certificate: An affidavit signed by the seller/exporter or an independent inspection firm (as required by the buyer/importer), confirming that merchandise meets certain specifications.
insurance document: A document certifying that goods are insured for shipment.
invoice/commercial invoice: A document identifying the seller and buyer of goods or services, identifying items such as: invoice number, date, shipping date, mode of transport, delivery and payment terms, and a complete listing and description of the goods or services being sold including prices, discounts, and quantities. The commercial invoice is usually used by customs to determine the true cost of goods when assessing duty.
order (negotiable or "shippers order") bill of lading: This is a title document which must be in the possession of the consignee (buyer/ importer) in order to take possession of the shipped goods. Because this bill of lading is negotiable, it is usually made out "to the order of" the consignor (seller/exporter). See bill of lading.
overland/inland bill of lading: Similar to an air waybill, except that it covers ground or water transport. See bill of lading.
packing list: A document listing the merchandise contained in a particular box, crate, or container, plus type, dimensions, and weight of the container.
phytosanitary (plant health) inspection certificate: A document certifying that an export shipment has been inspected and is free from pests and plant diseases considered harmful by the importing country.
shipper's export declaration: A form prepared by a shipper/exporter indicating the value, weight, destination and other information about an export shipment.
straight (non-negotiable) bill of lading: Indicates that the shipper will deliver the goods to the consignee. The document itself does not give title to the goods. The consignee need only to provide identification to claim the goods. A straight bill of lading is often used when the goods have been paid for in advance. See bill of lading.
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