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Kim Sindberg: The Cheaters Handbook to Documentary Credits (2014)
Table of Contents:

1 Introduction

2 Documentary credit crash course

2.1 Documentary credit definition

2.2 Documentary credit functions

2.3 The independence principle

2.4 The parties to the documentary credit transaction

2.5 Standard for examination of documents

2.6 The Documentary credit lines

2.6.1 Graphic overview of the documentary credit lines

2.6.2 Line 1 – The agreement between importer and exporter

2.6.3 Line 2 – The parties

2.6.4 Line 3 – Issuing the documentary credit

2.6.5 Line 4 – Presenting the documents and paying

3 Exporter perspective

3.1 Accept the premise

3.2 Identify the risk

3.3 Dictate/stipulate the requirements to the documentary credit

3.3.1 The time of payment

3.3.2 Date and place of expiry of the documentary credit

3.3.3 Latest date for shipment and presentation of documents

3.3.4 Beneficiary – name and address

3.3.5 Applicant – name and address

3.3.6 Type of documentary credit

3.3.7 Currency, amount and quantity

3.3.8 Shipment details

3.3.9 Goods description

3.3.10 Required documents

3.3.11 Other requirements

3.4 Check the documentary credit

3.5 Make correct documents

3.6 Present to the correct bank

3.7 Trouble shooting

3.7.1 Evaluate the discrepancy/refusal message

3.7.2 Correct the document(s)

3.7.3 Obtain issuing banks pre-approval

3.7.4 Documents are forwarded for approval

3.7.5 Payment is obtained “under reserve”

4 Importer perspective

4.1 Accept the premise

4.2 Dictate/stipulate the requirements to the documentary credit

4.2.1 The time of payment

4.2.2 Date and place of expiry of the documentary credit

4.2.3 Latest date for shipment and presentation of documents

4.2.4 Beneficiary – name and address

4.2.5 Applicant – name and address

4.2.6 Type of documentary credit

4.2.7 Currency, amount and quantity

4.2.8 Shipment details

4.2.9 Goods description

4.2.10 Required documents

4.2.11 Other requirements

4.3 Check the documentary credit

4.4 Check the documents received

4.4.1 The documents comply

4.4.2 The documents do not comply

5 Transport company perspective

5.1 Accept the premise

5.2 Be ahead

5.3 Issue correct transport documents

Appendix 1: documentary credit sample with documents

Documentary Credit:

Invoice

Packing list

Certificate of Origin

Weight List

Certificate of Quantity

Certificate of Quality

Bill of lading

Insurance Certificate

Draft/Bill of Exchange

Appendix 2: Documentary credit cheat advice – exporter perspective

Appendix 3: Documentary credit cheat advice – importer perspective

Appendix 4: Documentary credit cheat advice – transport company perspective

Appendix 5: SWIFT Transportation fields