The information provided here is part of Guide on howtoexport and import
How does Bill of Lading work in Sight LC
How does Bill of Lading function in Sight Letter of Credit?
In this article let us discuss about the mechanism of Bill of Lading under Sight LC. How does Bill of Lading work under sight LC? How does bank handle Bill of Lading under LC at sight?
Letter of credit at sight is one of the payment terms in international trade. Once after completion of export formalities at customs, exporter collects original Bill of Lading from carrier of goods. The said original bill of lading along with other shipping documents are submitted along with Letter of Credit with his bank for negotiation. After satisfying with the terms and conditions of letter of credit, the authorized bank negotiate documents and sends the documents to overseas buyers bank. The buyer’s bank notifies buyer and instructs him to accept documents. The buyer accepts documents and arrange for import customs clearance to take delivery of goods. He surrenders original bill of lading with the carrier and takes delivery of goods.
Here the point is, without original bill of lading, the buyer can not take delivery of goods. As per sight LC conditions, LC opening bank has to remit amount of shipment to beneficiary bank, on acceptance of documents by buyer. So, buyers bank (LC opening bank) delivers original bill of lading only after receiving the export proceeds (value of goods shipped). In short, without remitting the amount as per letter of credit, the buyer can not take delivery of goods.
As per agreed terms with supplier, if buyer agreed to mention opening bank’s name as consignee or ‘To Order’, the opening bank (buyer’s bank) has to issue a ‘Delivery order ‘ to the buyer. The carrier of goods can release cargo to the buyer only after receiving such delivery order issued by the bank mentioned on Bill of Lading. Before issuing delivery order, bank confirms receipts of payment from his customer (buyer) against the Letter of Credit. Also read Can Original Bill of lading be surrendered under LC at sight Is Airway bill a documents of title to us under LC at sight?
In this article I have explained about the importance of Bill of Lading under LC at sight. Have you satisfied with this article about the mechanism of Bill of Lading under sight Letter of Credit? What is your experience in handling Letter of Credit at Sight? Would you like to share your knowledge and experience to add this article? Share below your thoughts about the function of Bill of Lading under Letter of Credit at sight.
Comment below your thoughts about this article - How does bill of lading work under sight Letter of Credit?
The above information is a part of Online export import training guide
STALE BILL OF LADING What does it mean? Difference between Clean On Board Bill of Lading and Shipped On Board Bill of Lading. Can Original Bill of lading be surrendered under DP terms of payment Can Original Bill of lading be surrendered under LC at sight Can Bill of Lading be surrendered on LC terms How to obtain a duplicate BL, if original bill of lading lost? Can a Bill of Lading be consigned to a customs broker? Can I get bill of lading before loading cargo Can two consignments meant for one buyer be shipped together under one Bill of Lading? Consignee To Order in Bill of Lading How to avoid delay in receiving OBL Original Bill of Lading? Amendment of Bill of Lading How to amend shipper details in Bill of Lading?. How to surrender HBL House Bill of Lading Surrender of Bill of Lading Some facts . How does Bill of Lading work in Sight LC. How does Bill of Lading work in DP payment terms? Can a Bill of Lading (BL) be predated for LC negotiation? What is the earliest date can be mentioned on Bill of Lading. Can BL date and let export date be same day? Can shipping line predate Bill of Lading,What is the earliest date can be mentioned on Bill of Lading. What is Said to weigh in Bill of Lading What is Shipper Load, stow and count in Bill of Lading What is said to contain in Bill of Lading. Can an importer take delivery of goods without original bill of lading? What is House BL House Bill of Lading Can Bill of Lading (BL) be before date of Certificate of origin GSP? What is Express Release Bill of Lading? Can Bill of Lading be surrendered at port of loading? Transferability of Bill of Lading What is charter party bill of lading ? How transshipment bill of lading works? What is Combined Bill of Lading / Multi model Bill of Lading Unclean Bill of Lading/Claused bill of lading/foul bill of lading/Dirty Bill of Lading What is Clean on board Bill of Lading? Is received for shipment Bill of Lading sufficient for LC negotiation? Different types of Bill of Lading 3 Reasons under Importance of bill of lading in international trade When can an exporter get bill of lading from shipping company?
Other posts about Import Export online tutorial