Important checks to be made by an exporter on receipt of an L/C are listed below:
1. Is the L/C of the type agreed to? In particular, do check if it is revocable or irrevocable, and also whether it is confirmed or unconfirmed.
2. Are the amount and unit price given in the L/C the same as in the sales contract?
ADVERTISEMENTS:
3. Expiry date and place of presentation of documents? Is the expiry date ahead? Would one be able to meet the expiry date? Does it give any mention about the last shipping date? What is the place at which documents have to be presented and if the place is not in the exporters’ own country, would he in that case be able to adhere to the expiry date?
4. Terms of Delivery? Any deviations from the Inco terms?
5. Documents called for? Would one be able to procure each and every document indicated in the L/C? What about the number of copies of each document?
6. Spellings in the L/C. Do check carefully and if any one of them needs corrections, do approach the importer to get it suitably amended.
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7. Are there obvious inconsistencies in the L/C?
8. Where and when is the credit available and payable?
9. Is there any indication in the L/C that it is subject to terms and conditions as per ICC Document dealing with Uniform Customs and Practice for Documentary Credits ICC Public 500, 1993?
10. Does the L/C require the furnishing of any declarations and if so their nature and format?
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11. Check the name and address as given in the L/C? Also do check the name and address of importing unit.
12. In the case of an L/C confirmed by a foreign bank, one has to consider whether such a bank does have a measure of reliability and strength? What about conditions in the country of the confirming bank?
13. If some documents require attestation and authentication, one has to consider carefully whether he will be able to get all the required work done within the time frame indicated by the expiry date.
14. Does the L/C require the exporter to furnish some documents which, for some reason or the other, cannot be obtained?
15. Does the L/C prohibit part shipment? If part shipment is permitted, what is the schedule?
16. What is the suggestion in the L/C regarding the nature of draft? Had the exporter agreed to it earlier?
17. Does the description of goods in the invoice tally in all respects with that indicated in the L/C?
18. Any particular conditions indicated in the L/C regarding shipping, e.g. place and date of shipment, port of destination, whether B/L is to be issued to order of the importer or is to be made out in importer’s name, etc.
19. Is the correct type of shipping document called for? CTD or B/L?
20. Does the L/C permit loading of merchandise on deck or for that matter its loading on a sailing ship?
21. Does the L/C call for Insurance certificate or Insurance Policy?
22. Does the L/C mention in specific terms, risks that have to be covered by insurance company?
23. Does the L/C call for any import or export licences?
24. Does the L/C insist upon some kind of specific standards in regard to rules of origin?
25. Is any special type of certificate of origin called for?
26. If documents require ‘legislation’ one has to ascertain whether consulate of the importing country is indeed fully equipped to undertake the necessary attestation? What are the terms and conditions of legalisation? Can the legalisation be effected in time?
27. Does the L/C mention in specific terms, names of agencies that alone can give quality certification?
28. What kind of transport document does the L/C ask a person to procure-precise position in regard to mode of transport on one hand and also whether the document has to be in the nature of ‘on-board’ or ‘accepted for carriage’ or ‘taking charge’ document on the other?
29. Does the L/C require one to arrange for insurance?
30. Are the risks to be covered, properly defined in the L/C?
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