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Air Transport Documents and what to pay attention to in international trade finance



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By : Arnilt Durpont    99 or more times read
Submitted 2011-04-21 03:18:30
Article 23 of the UCP 600 states the requirements which a air transport document has to meet if banks are to accept it as compliant for a presentation made under a letter of credit .
Article 23 deals with carrier-issued air transport documents, evidencing the promise to transport the goods from the airport of departure to the airport of destination. Typically these are called “airway bill” or “consignment note”. As with all shipping documents, however, it is irrelevant how they are called or named. The ICC thusly:
“As long as an air transport document issued by a freight forwarder fulfils the requirements of UCP 500 sub-Article 27 (a)(i) in conjunction with UCP 500 Article 30, and thereby clearly shows that it is a carrier-type document, there is no ground for rejecting the air transport document solely for the reason that it is named House Air Way-bill.”
When shipping companies create their own shipping documents it is often unclear whether the document evidences a contract of carriage or a contract of freight forwarding. Documents of freight forwarders (who do not act as carriers) cannot be accepted under a bill of lading. However, much of this ambiguity has been resolved in practice, since many companies now model their own documents on the FIATA Air Waybill.
When issuing an airway bill, typically the goods have not been loaded on board the plane, rather the goods have only been received for shipping. Unless an actual date of dispatch is detailed in the airway bill, the date of issuance is the relevant date.
If the LC requires an actual date of shipment, the airway bill has to specifically show this date. Not sufficient are data provided in the form fields entitled “For Carrier Use only”, since typically this field only contains schedule information which need not coincide with the actual shipping dates.
In practice air-carriers often use trucking companies to fulfill their obligations of carriage, particularly if a flight is over- or underbooked, or if trucking is faster than flying. Even though this practice is widespread, and approve by IATA resolution 507 B, any air-transport shipping document, indicating the use of trucks instead of planes, will be rejected by the banks.
An air transport document must appear to be the original for consignor or shipper, even if the credit stipulates a full set of originals.
“The only original airway bill issued to the shipper is Original No. 3, and this is signed wither by the carrier of his agent.”(ICC-Publication NO. 459, Case 81)
Rather surprising for some might be the provision of Article 23 c ii. UCP 600:
“An air transport document indicating that transshipment will or may take place is acceptable, even if the credit prohibits transshipment.”

If an applicant is concerned about transshipments, since he fears delays or fluctuations in temperature, the ICC recommends:
“The only way that an applicant can completely prohibit transshipment would be to state that transshipment is prohibited and that sub-article 23 © (ii) is not applicable or excluded.”

Author Resource:

Click here, if you want to find out more about letters of credit ; if the articles do not help you, you can ask the experts in the forum.

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