L/C if not to spec what can we do?
Post 1 of 4
If we are using a L/C to do a payment, the bank only match the paper work and ask us to release payment, what if the goods are not to spec? What can be done and has anyone has experience this?
David
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03 Jul 2007 23:52
Post 2 of 4
Replying to [David Frencken]:send somebody to see the cargo before loading.
05 Jul 2007 01:15
Post 3 of 4
Replying to [David Frencken]:
When you issue L/C, you must indicate all detail in L/C, such as description, packing detail, weight, delivery & etc.
When your supplier send cargo to you, they should also indicate all detail in their document. Most of the bank must check whether the document is matching to terms in L/C or not. If anything mis-match, you can reject to receive cagro.
Please be aware that bank can only ensure documentation issue. For physical spec, it is preferred to send somebody you trust to inpect. If it is an oversea trade, you can appoint an agent to help you. Do not save smalll money & loose big
When you issue L/C, you must indicate all detail in L/C, such as description, packing detail, weight, delivery & etc.
When your supplier send cargo to you, they should also indicate all detail in their document. Most of the bank must check whether the document is matching to terms in L/C or not. If anything mis-match, you can reject to receive cagro.
Please be aware that bank can only ensure documentation issue. For physical spec, it is preferred to send somebody you trust to inpect. If it is an oversea trade, you can appoint an agent to help you. Do not save smalll money & loose big
13 Jul 2007 02:34
Post 4 of 4
Replying to [David Frencken]:
There is not much you can do if the goods are not up to spec as applicant bank deal with beneficiary bank only on paper work. If your suppliers do not want to accept their reject there is nothing you can do but to pay. You can try to bring the matter to international court but it is going to be very messy and costly.
All you can do is to do all the prevention before the money is paid, such as visiting the factory or ask a QC company to check the goods, from my experience to put in the L/C’s additional condition that third party inspection certificate by the inspection company’s name is required. Since the third party deal with you directly if the goods are not up to spec they’ll inform you immediately. If they don’t issue the inspection certificate they the seller cannot fulfill the L/C condition, then you can reject or cancel the L/C.
Remember to inform your bank if the goods is failed as the seller might attach a fake cert and your bank might just release the payment. Always assume that the supplier will make mistakes and produce rejects in the initial stage and take every precaution against it. That is the only way, never trust a supplier which has not been proven.
There is not much you can do if the goods are not up to spec as applicant bank deal with beneficiary bank only on paper work. If your suppliers do not want to accept their reject there is nothing you can do but to pay. You can try to bring the matter to international court but it is going to be very messy and costly.
All you can do is to do all the prevention before the money is paid, such as visiting the factory or ask a QC company to check the goods, from my experience to put in the L/C’s additional condition that third party inspection certificate by the inspection company’s name is required. Since the third party deal with you directly if the goods are not up to spec they’ll inform you immediately. If they don’t issue the inspection certificate they the seller cannot fulfill the L/C condition, then you can reject or cancel the L/C.
Remember to inform your bank if the goods is failed as the seller might attach a fake cert and your bank might just release the payment. Always assume that the supplier will make mistakes and produce rejects in the initial stage and take every precaution against it. That is the only way, never trust a supplier which has not been proven.
11 Dec 2007 17:44
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