How does Bill of Lading work in Sight LC Posted on 08 April 2023 Category : Bill of Lading 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 The legal strength of Bill of Exchange in International Trade. What is Bill of Exchange in International Trade. What is the earliest date can be mentioned on Bill of Lading. Can BL date and let export date be same day? How to amend BL number in Import General Manifest (IGM) Disadvantages of Letter of credit (LC) for Exporter Who are the parties involved in an LC Letter of Credit How to start Export Business? How to get Export Orders? What are the risks and solutions in Export Business? Click here to know India Trade Classification(ITC) Service Tax - Click here to read complete notification under Budget 2014 What is Bank post shipment credit to exporters? Types of export containers Measurement of export containers Export Import Policy of India 2015-20 MEIS, Merchandise Exports from India Scheme SEIS, Service Exports from India Scheme Merge your Commercial Invoice and Packing List for all your future exports Export procedures and documentation Comments wafaa: On 22 August 2014 Thank you SANJAY LOHAR: On 11 April 2015 Dear Sir, Thank you sharing article. It very useful to me. My name is sanjay from India. I want to send export spices from south africa to Egypt. My supplier is agreed to send the material FOB at egypt port. My customer payment term is 100% LC At sight. I am totally confused about what are the instructions should I give to my supplier. And what are the documents are required to him forward the same to my egypt customer. Please help in this matter. Regards SANJAY LOHAR Harsh Fatnani : On 14 October 2015 I got your contact address from http://www.howtoexportimport.com. I am absolutey layman in respect of import procedures and request you to kindly update me in following respect. I am working as finance executive in Goverment Hospital and we need to Import Medical equipment from foreign country whether we will have to open LC to make payment. Whether we will be eligible for custom duty exemption when we make payment to foreign vendor in its currency. Few vendors in india also ready to provide us equipment but they are saying that in case the payment will be made in indian currency, we will not be eligible for Custom duty exemption. Juria Spend: On 01 March 2016 If L/C at the description of goods stipulates value of goods, is it compulsory that we have to show this value on the B/L? moez: On 09 June 2016 Your english is horrible, can't follow dineah parihar : On 10 August 2016 First of all, thank you making such an informative web site. We have received LC @ sight from Yemen in which Yemen's local bank, issuing bank, name is inserted in place of importer as an Applicant.Can it be possible? Anand Sonawane : On 13 August 2016 My name is Anand and I wanted to start my own export. I want to know about letter of credit. Is it mandatory for export business or are there any other ways to get export payment? If I'm often doing business with a genuine buyer, will there be LC required or I can go for some other mode of payment? How many modes of payment in export import? Nelson Rodriguez : On 17 August 2016 I've enjoyed reading your export/import blog. It has alot of great information. I have a question: What does it mean when a BOL is stamped "surrendered"? Does this make the BOL non-negotiable? Anindita Chatterjee: On 18 October 2020 Is there any way where we can directly send the documents to the buyer's bank without involving the bank from exporter's side for a LC payment? Nathan Piari: On 01 February 2022 Very supportive to new importers. Bahram: On 28 May 2022 It was great, you did not explain just one case that this documentary credit will be deposited in the port of origin after loading and delivery to the shipping company to the seller's account Ankan : On 11 July 2022 I have shipped one container in 90 days lc the buyer has released the container, but while I checked in my bank the bank doesn't know the buyer has released the document what to do