CDCS Incoterms 2010 Supplement FINAL Sec

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Certified Documentary Credit Specialist 2010 Incoterms Supplement This supplement incorporates the recent changes made to Incoterms. Please replace Chapter 2 with the following.

Two

The Sales Agreement

Chapter outline 2.1 Introduction and learning objectives

2.1.1 Introduction 2.1.2 Learning objectives

2.2 Contract of sale 2.2.1 Conclusion of the export contract 2.2.2 Form of the export contract 2.2.3 Agreements 2.2.4 Law and disputes 2.2.5 International sales law 2.2.6 Effective sales agreements

2.3 Trade terms in foreign trade Incoterms and documentary credits 2.3.1 Introduction 2.3.2 The 11 Incoterms 2.3.3 An Incoterms case study 2.3.4 Implications of Incoterms 2010 for documentary credits 2.3.5 Electronic developments

2.4 Methods of payment 2.4.1 Methods of payment 2.4.2 Bills of exchange/promissory notes as instruments of negotiation and as

instruments for avalisation or forfaiting in collections and documentary credits 2.4.3 The documentary credit as a method of payment and the autonomy of

documentary credits (the independence principle)

ifs School of Finance 2010 2

2.1 Introduction and learning objectives

2.1.1 Introduction The most basic agreement in international trade is the sales agreement between the seller and the buyer (this is often referred to as an export contract or a foreign sales agreement). All other agreements and procedures commonly used in international trade result from the performance of this contract or agreement. For example, the two most essential terms of the sales agreement are the sellers undertaking to provide the goods to the buyer and the buyers undertaking to pay the price in return. In the context of an export sale, the first of these usually involves the conclusion of a contract with a carrier to transport the goods from the country of the seller to that of the buyer. The second undertaking makes it necessary for the buyer to arrange payment through the banking system. Note that payment mechanisms commonly employed on import/export transactions, including documentary credits, are briefly examined and compared later in this chapter. Other procedures related to the export sale and the payment operation sometimes include government requirements, such as customs procedures and exchange control regulations.

A documentary credit is an undertaking separate from the export agreement or other commercial transaction on which it may be based. This essential characteristic and its consequences will be covered in further detail in subsequent chapters, but in commercial rather than legal terms, documentary credits are issued to facilitate performance of the buyers payment obligation to the seller. The need for a documentary credit in an import/export transaction arises from the creation and completion of an export agreement and/or other commercial transactions.

Against this background, this chapter summarises some of the main features of export contracts and a number of the most frequently used ways in which payment may be effected under an export contract. The purpose is to give the documentary credit specialist a general understanding of the major principles applicable to export contracts and of the different ways in which the buyers obligation to effect payment may be met.

2.1.2 Learning objectives The learning objectives for the documentary credit specialist are:

to understand who is involved in the sales agreement and to appreciate that the agreement supersedes the payment obligation;

to understand why the sales agreement is important in order that the exchange of goods for money can be effected smoothly;

to obtain a clear understanding of Incoterms, as applicable to an international trade transaction;

to be able to compare the basic methods of payment; and to understand when the documentary credit is a preferred method of payment and to

understand the principle of the autonomy of a documentary credit.

2.2 Contract of sale

2.2.1 Conclusion of the export contract Although trade is continuing to become more international in nature, there is still no general system of international commercial law applicable to export transactions. This means that the detailed provisions governing the conclusion, performance and enforcement of export


contracts still differ from one country to another, in accordance with the different laws of each country.

In general terms, the buyer and seller conclude a legally enforceable export contract by agreeing on the goods to be sold and the price to be paid for them. Usually, their agreement will, in addition, cover related items such as the time period for delivery, the method of payment and how the goods are to be delivered (the trade terms). It may also specify what law is applicable to the contract and which court or arbitration system has jurisdiction to hear any claims in the event of a dispute.

2.2.2 Form of the export contract Precise requirements for export contracts vary from one country to another, but, as a general principle, the determining factor is the agreement of the seller and buyer to sell and to buy. Accordingly, the import/export contract does not have to be a lengthy formal document in order to be legally enforceable. Characteristically, contracts of this type are concluded on the basis of an informal exchange of messages, including telephone conversations, faxes and emails. Often, the seller sends the buyer a pro forma invoice, indicating details of the goods and their unit prices, before the conclusion of the transaction.

2.2.3 Agreements Export sales are usually concluded between professional buyers and sellers acting in the course of their business rather than between private individuals. In this situation, buyers and sellers frequently maintain their own set of standard conditions of sale and purchase, setting out the terms on which they normally conduct business. Typically, these are included by reference in the contracts.

Problems sometimes arise when the buyer and seller send their standard conditions to each other during the pre-contract negotiations. It is then frequently unclear which set of conditions (if either) applies to the transaction and whether the parties have effectively come to an agreement at all. In extreme cases, the uncertainty created by this practice leads to a dispute that ends in court. In this event, the judge or arbitrator may decide that no contract was ever concluded because the buyer and seller failed to agree on the conditions applicable. More often, the judge or arbitrator will try to save the contract by determining, for example, that one or the other set of conditions applies or that both sets of conditions apply, to the extent that they do not conflict.

2.2.4 Law and disputes As mentioned above, there is still no supranational commercial legislation to cover all aspects of export contracts. As a result, in most cases, export contracts are governed at least in part by the laws of the country of one of the parties involved. The buyer and seller may themselves agree which law is to apply by including a specific provision in the sales contract. Otherwise, if a dispute occurs, the judge or arbitrator hearing the matter may have to decide this issue first, in order to determine what rules of law apply to the case.

In this situation, judges and arbitrators characteristically resolve the issue by applying the law of the country that is most closely connected with the contract for example, the country to which the goods are to be delivered. In many instances, a trade term applicable to the contract indicates the point at which delivery is to be made for legal purposes. For example, under CIF (cost, insurance and freight) or FOB (free on board) terms, the seller fulfils the delivery obligation when the goods are loaded on board a ship in the sellers country.

Because the sales agreement is signed only by the seller and the buyer, banks are not involved in the sales agreement.


2.2.5 International sales law A number of attempts have been made to overcome the difficulties that exist with sales contracts by establishing international law for export sales. The latest of these is the 1980 UN Convention on Contracts for the International Sale of Goods (CISG). It provides a standardised set of legal rules for import/export transactions but, although it has now been adopted by a number of major trading countries, it has yet to gain global ratification and application.

2.2.6 Effective sales agreement It must be stressed that, in order for there to be a smooth exchange of goods for payment with minimum dispute between seller and buyer, the seller and buyer must resolve the following issues (in addition to goods and unit price):

the terms of delivery of the goods; the point at which the risk in respect of goods passes from seller to buyer; who should clear goods through customs and up to what point; who arranges for insurance for the carriage of goods and up to what point; what precise risks to goods need to be covered and specifically shown as covered on

the insurance document; what commercial documents are needed and what should be shown on them; and whether any other documents (such as inspection certificates) are needed and who is to

issue such documents.

The most common method of minimising the risk of dispute arising in the sales contract is to incorporate Incoterms (see below). But it is not only important for the seller and the buyer to agree to trade terminology as covered by Incoterms: it is even more important for there to be a clear understanding on their application. It is only when these objectives have been achieved that an effective sales agreement is created.

2.3 Trade terms in domestic and foreign trade Incoterms and documentary credits

2.3.1 Introduction In order for trade to prosper, buyers and sellers must be clear as to where their responsibilities under commercial contracts begin and end. Consequently, in respect of the transport of goods sold/purchased under these contracts, buyers and sellers will need to know who is responsible for the payment of carriage, insurance, loading/unloading costs, import/export taxes and other related disbursements. They will also need to have a clear indication of the point at which such responsibilities end. Failure to establish transparently the parameters of these responsibilities within the commercial contracts would make it difficult for sellers to price their goods accurately and for buyers to calculate the full purchase costs. It would also increase the number of contractual disputes between buyers and sellers, which would have to be resolved by arbitration or through the courts, with all the cost implications of such actions.

When looking at trade across national borders, you have the added problem that different countries have a variety of interpretations of the same contract wording under their own laws. Thus, in order for international trade to develop, it was necessary for a set of trade terms to be agreed and internationally accepted. As a result, the International Chamber of Commerce (ICC) designed International Commercial Terms, or Incoterms, which were first published in 1936. There were, at that time, alternative trade terms that were used by some


countries, but Incoterms are now the accepted international standard for trade terms referred to in commercial contracts.

The latest version of Incoterms came into effect on 1 January 2011 and is titled Incoterms 2010. Full details can be found in ICC Publication No. 715E. It is worth mentioning here that Incoterms are confined to the rights and responsibilities of parties relating to delivery of goods sold under the contract of sale. They do not extend to other contracts, such as insurance, carriage and payment, although the implications of the particular Incoterms used may have links to such contracts. An example of this would be if the Incoterm CFR (cost and freight) were to be incorporated in a contract this would imply that carriage would be by sea and therefore that either bills of lading or sea waybill documentation would be needed. Taking this example a stage further, if payment were to be made under a documentary credit, the type of transport document called for by such a credit would have to comply with the Incoterm stated otherwise, at the very least, advising of the credit or payment thereunder may be delayed.

2.3.2 The 11 Incoterms The new Incoterms are for use in domestic and international trade transactions. There are 11 Incoterms and each sets out the obligations of the buyer and the seller in respect of that particular Incoterm. Any obligation that does not appear in a particular Incoterm must be the responsibility of the buyer unless the commercial contract states otherwise.

Incoterms 2010 have been designed to mirror changes in commercial practices that have occurred since the last revision in 2000. These included reference to electronic alternatives to paper documentation, Cargo Insurance Clauses and also the major changes in responsibilities of parties dealing on DAT and DAP terms basis.

For ease of understanding and structure, the 11 Incoterms are split into two groups, as follows.

Group 1: Rules for any mode or modes of transport These terms include: EXW Ex Works FCA Free Carrier CPT Carriage Paid To CIP Carriage and Insurance Paid DAT Delivered At Terminal DAP Delivered At Place DDP Delivered Duty Paid

Group 2: Rules for sea and inland waterway transport only These terms include: FAS Free Alongside Ship FOB Free On Board CFR Cost and Freight CIF Cost, Insurance and Freight

It can be readily seen from the above Incoterm groupings that the obligations of the seller with regard to costs and delivery risks escalate from the minimum EXW to the maximum DDP.

When incorporating an Incoterm into the sales contract, the parties should take care to ensure that the term selected is appropriate to the agreed point of delivery and the mode of transportation to be used. For example, CFR, CIF, FAS and FOB apply only if a ship is used for delivery, ie for transportation by sea or inland waterway. All of the other terms may be used as applicable for any mode of transportation.


2.3.3 An Incoterms case study Perhaps the best way of understanding the implications of Incoterms 2010 is by considering a case study.

Let us presume that Excro Ltd of Tettun Road, Denby, UK, is exporting/selling goods to Imcro Inc of Iowa Road, Miami, Florida, USA.

Tables 2.1 and 2.2 explain the implications for both parties, where appropriate, of the different Incoterms that might be applied to such a transaction. The various Incoterms are set out in a logical order, starting with that which imposes the least obligation on Excro Ltd and ending with that which imposes the most obligations upon Excro.


Table 2.1 Incoterms 2010 case study: Group 1 Rules for any mode or modes of transport of goods

Incoterm Standard ICC Abbreviation

Obligation of Excro Ltd (seller) Responsibilities of Imcro Inc (buyer)

Ex works [named place, eg Tettun Road factory, Denby]

EXW This term may be used irrespective of mode of transport selected and may be used where more than one mode of transport used. The seller makes the goods available for collection from Tettun Road, Denby, by Imcro Inc. Once Imcro Inc has collected the goods, Excro Ltds responsibility is at an end. A commercial invoice, or equivalent electronic record or procedure (if this is customary or has been agreed between the parties) will be provided for Imcro Inc. Goods should be suitably packed for transportation, unless it is the norm for the goods involved to be delivered unpacked. The seller must at its own expense provide other documents, eg quality and quantity certificates, which are necessary for the delivery of the goods. The seller must provide other documents, eg quality and quantity certificates, if required by the buyer at additional cost to the buyer. The seller must deliver the goods on the agreed date or within the agreed period. The seller must give notice of the availability of the goods to the buyer to enable the buyer to take delivery of the goods.

The buyer, Imcro Inc, pays for the goods as required in the sale contract. The buyer takes delivery from Tettun Road. It makes all arrangements at its own cost to take goods to its own premises. It is in Imcro Incs interests to arrange appropriate insurance to cover this journey. Imcro Inc is responsible for obtaining relevant export and import licences, and completion of customs formalities, payments for the export and import duties and taxes on the goods. Imcro Inc is advised not to use EXW if it cannot directly or indirectly obtain an export licence and clearance of the goods for export.




Free carrier [named place, eg Denby inland container depot]

FCA This term may be used irrespective of mode of transport selected and may be used where more than one mode of transport is used. Goods must be suitably packaged for transportation unless it is the norm for the goods involved to be delivered unpacked or the buyer has notified the seller of specific packaging requirements before the contract of sale is concluded. The seller, Excro Ltd, makes the goods available to Denby Containers at the inland container depot or at the buyers named place of delivery. The delivery would be incomplete until the goods had been loaded onto the carriers own transport. Excro Ltd must advise delivery of the goods at Denby Containers to Imcro Inc. Excro Ltd clears the goods for export, where applicable; it completes export and customs requirements, including obtaining an export licence and paying any costs, duties and taxes in respect of export. The seller bears all risks of loss or damage to the goods until they have been delivered to the carrier or another person nominated by the buyer. The seller supplies the buyer with a commercial invoice or equivalent electronic record or procedure (if this is customary or has been agreed between the parties), and a transport document (delivery note) with proof of delivery to Denby Containers, ie a document in accordance with the terms of sale contract. The seller has no obligation to buy insurance to cover loss or damage to goods. However, the seller must (at the buyers expense) provide the buyer, if requested, with information that the buyer needs in order to obtain insurance cover. The seller must deliver the goods to the carrier or another person nominated by the buyer at the agreed point or named place on the agreed date or within the agreed period. The seller must notify the buyer that the goods have been delivered to the carrier named by the buyer to enable the buyer to take delivery of the goods.

Imcro Inc must pay for the goods as required in the sale contract. It must take delivery of the goods when they have been delivered at a named point or at the named place of delivery (ie before they have been loaded onto any collecting vehicle). At its own risk and expense, Imcro Inc makes all the arrangements for insurance cover and for transportation of the goods to its own premises from Denby Containers inland container depot. Imcro Inc should obtain any import licence and perform any customs requirements necessary for the import of the goods, including paying all costs, import duties and taxes, etc, at the place of destination. The buyer bears all risks of loss or damage to the goods from the time they have been delivered, as agreed between the parties.




Carriage Paid To...[named place of destination]

CPT This term may be used irrespective of mode or modes of transport selected by the buyer. Goods must be suitably packaged for transportation, at the sellers expense, unless it is the norm for the goods involved to be delivered unpacked. In this case the seller delivers the goods to the carrier named by the buyer at the named place according to the sale contract on the agreed date or within the agreed period. The seller pays for the carriage of the goods to the named place for the delivery of the goods. The CPT term requires the seller to clear the goods for export. The seller obtains an export licence at its own cost and pays export duties and taxes, etc. The risk of loss or damage to the goods, as well as any additional costs due to events occurring after the goods have been delivered to the carrier, is transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier. Carrier means any person who, in a contract of carriage, undertakes to perform or to procure the performance of carriage by rail, road, sea, inland waterway or by a combination of such modes. If subsequent carriers are used for the carriage to the agreed destination, the risk passes from the seller to the buyer when the goods have been delivered to the first carrier. The seller provides a commercial invoice, or equivalent electronic record or procedure (if this is customary or has been agreed between the parties), transport document freight paid, and quality and quantity documents if required in the sale contract. The seller must notify the buyer that the goods have been delivered to the carrier in accordance with the sale contract to enable the buyer to take delivery of the goods. The seller must deliver the goods to the carrier or another person nominated by the buyer at the agreed point or place on the date or within the agreed period.

The buyer pays for the goods as required in the sale contract. The buyers responsibilities are to: take delivery of goods when delivered at

the named place of destination; arrange an import licence, pay custom

duties, taxes; arrange and pay for cargo insurance

from the point when the goods are delivered into the custody of the first carrier.

The buyer is also responsible for the cost of transportation of the goods from the named place of destination to the buyers warehouse. The buyer bears all risks of loss or damage to the goods from the time they have been delivered at the named place.




Carriage and Insurance Paid To... [named place of destination]

CIP This term may be used irrespective of mode or modes of transport selected by the buyer. The seller has the same obligation as under CPT but with the addition that it has to arrange and pay for insurance of the goods against the risk of loss or damage to the goods during the carriage, complying at least with minimum cover as provided by Clause (C) of the Institute of Cargo Clauses or any similar clauses. The insurance must cover the invoice value plus 10%, in the currency of the contract. It is the sellers obligation to clear the goods for export. The seller must obtain an export licence and other necessary documents for export of the goods, if required, pay custom duties and taxes. The seller provides a commercial invoice, or equivalent electronic record or procedure (if this is customary or has been agreed between the parties), an appropriate transport document (clean bill of lading) freight paid, and cargo insurance policy. The goods must be packed appropriately for the export purpose. The seller must deliver the goods to the carrier or another person nominated by the buyer at the agreed point or named place on the agreed date or within the agreed period. The seller must notify the buyer that the goods have been delivered to the carrier named by the buyer to enable the buyer to take delivery of the goods.

The buyer pays for the goods as agreed in sale contract. The buyer must take delivery of transport and other documents as agreed in the sale agreement. The buyer must take delivery of the goods at the named place of destination. The buyer is responsible for paying for the import licence, import duties and taxes. It must clear the goods for import and pay the cost of transportation from the port of destination to its (importers) premises.




Delivered At Terminal... [named terminal at port or place of destination]

DAT This term may be used irrespective of mode or modes of transport selected by the buyer. The seller fulfils its obligation to deliver when the goods are unloaded and placed at the disposal of the buyer at the named terminal at the named port or place of destination. The terminal includes any place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal. The seller bears all risks of loss or damage to the goods involved in bringing the goods to the terminal at the named port or place of destination, and the costs of unloading. The sellers obligations are to obtain an export licence and other necessary official documents required for export purposes. The seller has to bear all risks and costs including duties, taxes and other charges for export. The seller provides a commercial invoice, or equivalent electronic record or procedure (if this is customary or has been agreed between the parties), appropriate transport document freight paid, insurance policy or other documents, as agreed in the sale contract. The seller will provide at its own risk and expense additional quality and quantity certificates, if required under the sale contract. Goods will be suitably packaged for transportation at the sellers expense, unless it is the norm for the goods involved to be delivered unpacked.

The buyer pays for the goods as required in the sale contract. The buyer is responsible for taking delivery of the goods from the named terminal. The buyer must obtain an import licence at its own risk and expense, pay customs duties and taxes and bear the cost of loading at the named terminal, transportation to and unloading at the place of destination.


Incoterm Standard ICC abbreviation


Delivered At Place [named place of destination]

DAP This term may be used irrespective of mode or modes of transport selected by the buyer. Under this term the seller fulfils its obligations to deliver when the goods have been delivered at the named place and the goods put at the disposal of the buyer on the vehicle/container ready for unloading. DAP requires the seller to clear the goods for export and obtain an export licence at its own risk and expense; it also requires the seller to pay export duties and taxes, etc. The seller procures a contract for the carriage of the goods, including loading and unloading at the place of destination. The term DAP may be used for any place named by the buyer, including that of the country of the exporter. Therefore, it is of vital importance that the place in question must be clearly defined by naming the place and the Incoterm in the sale contract. Goods will be suitably packaged for transportation unless it is the norm for the goods involved to be delivered unpacked. The seller provides the quality and quantity certificates at its own risk and expense, if required in the sale contract. The seller bears all the risks of loss or damage to the goods until they have been delivered to the carrier named in the sale contract. The seller must notify the buyer that the goods have been delivered to the carrier named by the buyer. The seller provides a commercial invoice, or equivalent electronic record or procedure (if this is customary or it has been agreed between the parties), an appropriate transport document, insurance policy and quality and quantity certificates, as agreed in the sale contract.

The buyer pays for the goods as required in the sale contract. The buyer must take delivery of the transport document. The buyer is required to obtain delivery of the goods at the place of destination, as agreed in the sale contract, to bear the cost of unloading, and to pay customs duties, import licence fees, import duties and taxes, etc. The buyer must pay all costs relating to the goods from the time they are delivered at the named place of destination to their arrival at the buyers warehouse. The changes to Incoterms should make this term more useful for container traffic, where goods are sold on a delivered basis.




Delivered Duty Paid [named place of destination]

DDP This term may be used irrespective of mode or modes of transport selected by the buyer. The seller fulfils its obligation to deliver when the goods have been made available at the named place of destination in the country of importation. The seller has to bear the risks and all costs in respect of clearing the goods for export, including the export licence, export duties and taxes. The seller is also obliged to pay import duties, taxes and other charges incurred in delivering the goods cleared for importation to the named place of destination. The EXW term represents the minimum obligation upon the seller. DDP represents the maximum obligation upon the seller and the minimum obligations of the buyer. This term should not be used if the seller is unable directly or indirectly to obtain the import licence. If the parties wish to exclude from the sellers obligation some of the costs payable upon importation of the goods (such as value added tax (VAT)), this should be made clear by adding words to this effect: Delivered duty paid, VAT unpaid (. . . named place of destination). Goods will be suitably packaged for transportation unless it is the norm for the goods involved to be delivered unpacked. The seller bears all the risks of loss or damage to the goods until they have been delivered to the carrier named in the sale contract. The seller must notify the buyer that the goods have been delivered to the carrier named by buyer. The seller provides a commercial invoice, or equivalent electronic record or procedure (if this is customary or has been agreed between the parties), as well as appropriate transport document, insurance policy, and quality and quantity certificates, as agreed in the sale contract. The seller must give notice to the buyer that the goods have been delivered to the carrier to enable the buyer to take delivery of the goods. The seller must deliver the goods by placing them at the disposal of the buyer on arrival, ready to be unloaded at the agreed point or the named place of destination on the agreed date or within the agreed period.

The buyer pays for the goods as required in the sale contract. The buyer must take delivery of the goods when they have been delivered at the named place of destination. The EXW term represents the maximum obligation upon the buyer. DDP represents the maximum obligation upon the seller and the minimum obligation upon the buyer.


Table 2.2 Incoterms 2010 case study: Group 2 Rules for transport of goods by sea and inland waterway Incoterm Standard ICC

abbreviation Obligation of Excro Ltd (seller) Responsibilities of Imcro Inc (buyer)

Free Alongside Ship (named port of shipment)

FAS This term is to be used only for sea or inland waterway transport of goods. Free Alongside Ship means the seller places or delivers the goods alongside the vessel, eg on the quay or on a barge nominated by the buyer at the named port of shipment. The seller fulfils its obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment. The seller provides export-quality packing of goods and bears the cost of transport of goods from its warehouse or factory to the port of shipment for loading on the ship. If the goods are in containers the seller will provide the goods to the carrier at a terminal and not alongside the vessel. In such cases the term FCA would be more appropriate. The sellers obligations are to: clear the goods for export, if required; obtain at its own risk and expense an export licence and other legal

documents required for export of the goods; pay export customs duties and taxes; provide a commercial invoice or electronic record or procedure (if this

is customary or has been agreed between the parties), and a clean bill of lading received for shipment;

give notice to the buyer that the goods have been delivered or placed alongside the vessel at the named port of shipment;

deliver the goods on the agreed date or within the agreed period.

The buyer pays for the goods as required in the sale contract. The buyer must accept the proof of delivery or transport document as agreed in the sale contract. The buyers obligations are to: give sufficient notice of the vessel

name, loading point and delivery time within the agreed period;

take delivery of the goods when delivered at the port of destination;

obtain an import licence, at own risk and expense;

bear all the freight charges, unloading costs, import duties and taxes, if applicable, and arrange for clearance of goods from the port of destination;

bear the risks of loss or damage to the goods from the moment the goods are placed on the quay alongside the vessel.




Free On Board [named port of shipment]

FOB This term is to be used only for transport of goods by sea or inland waterway. The FOB term requires the seller to clear the goods for export, and to pay export duties and taxes, and loading charges. The sellers obligations are to: deliver the goods on board the ship (this requirement is fulfilled when

the goods have passed over the ships rail at the named port of shipment);

obtain an export licence, if required; obtain, at its own risk and expense, quality and quantity certificates, if

required in the sale contract; provide the buyer with a commercial invoice, or an electronic record or

procedure (if this is customary or had been agreed between the parties), and a clean on board bill of lading freight to pay;

give notice to the buyer that the goods have been delivered on board the named ship at the port of shipment.

The buyer pays for the goods as required in the sale contract. The buyer must take delivery of the transport document. The buyer has to obtain at its own risk and expense an insurance policy to cover the risks of loss or damage to the goods from the point when the goods have been delivered on board the named ship at the port of shipment. The buyer has to arrange for payment of freight for the cargo, unloading costs and other import customs duties and taxes, etc, at the port of destination. The buyer is responsible for the clearance of the goods from the port of destination.




Cost and Freight [named port of destination]

CFR This term is to be used only for transport of goods by sea or inland waterway. The seller fulfils its obligation when the seller has delivered the goods on board the vessel. CFR requires the seller to clear the goods for export, obtain an export licence, pay export duties and taxes, and bear the risk of loss or damage to goods until the goods have been delivered on board the vessel. The seller must pay the costs and freight necessary to take the goods to the named port of destination. The risk of loss or damage to the goods, as well as any additional costs due to events occurring after the time the goods have passed the ships rail and have been delivered on board the vessel, is transferred from the seller to the buyer. The seller provides a commercial invoice, or an electronic record or procedure (if this is customary or has been agreed between the parties), a clean on board bill of lading freight paid, and quality and quantity certificates if required in the sale contract. The seller must also give notice to the buyer that the goods have been shipped on board the ship at the port of shipment.

The buyer pays for the goods as required in the sale contract. The buyer takes delivery of the goods when they arrive at the port of destination. The buyer is responsible for: obtaining an import licence arranging and paying for the insurance

of the goods; paying import duties and taxes; arranging clearance of goods; paying transportation costs from the

port of destination to the buyers premises, including unloading costs.




Cost, Insurance and Freight [named port of destination]

CIF This term is to be used only for sea or inland waterway transport of goods. The seller has the same obligation as under CFR but with the addition that it has to procure marine insurance against the buyers risk of loss or damage to the goods during carriage. The seller contracts for insurance and pays the insurance premium. CIF requires the seller to clear the goods for export and pay duties and taxes. Cover should comply with the minimum provision of Clause (C) of Institute of Cargo Clauses (LMA/IUA). It should cover 110% of the contract value in the currency of the contract. The seller provides a commercial invoice, or an electronic record or procedure if this has been agreed between the parties, quality and quantity certificates if required in the sale contract, a marine insurance policy, a clean on board bill of lading freight paid or prepaid. The seller must deliver the goods to the ship nominated by the buyer at the port of shipment on the date or within the period agreed in the sale contract. The seller must give notice to enable the buyer to arrange to take delivery of the goods when they arrive at the port of destination.

The buyer pays for the goods as required in the sale contract. The buyer must take delivery of the transport document(s). The buyer must take delivery of the goods when they arrive at the port of destination. The buyer is responsible for acquiring an import licence, paying import duties and taxes, clearance of goods from the port of destination, and transportation of goods from the port of destination to the buyers premises.


2.3.4 Implications of Incoterms 2010 for documentary credits The case study encapsulates how responsibilities, and therefore costs, are transferred from the buyer to the seller and vice versa, depending upon the Incoterm used.

When buyers agree commercial contracts with sellers, with payment due under a documentary credit, the parties must take into account the Incoterm being used. There is obviously no point in requesting an air waybill as one of the documents to be presented by a beneficiary under a documentary credit if the Incoterm clearly identifies that the mode of transport is by sea. Similarly, a buyer should not request an insurance document from the seller if it is not the sellers responsibility to insure the goods under the CFR Incoterm, for example. Such errors can only delay the issuance, advising or payment under a documentary credit and can also have a financial cost, in the form of additional bank charges, and possible impact on cash flow. They may also affect the viability of any future trading relationship between the seller and buyer.

Sellers agree to payment under documentary credits because of the assurance from a bank that payment will be made, provided that the documentation presented conforms with the requirements of the relevant documentary credit, irrespective of whether the buyer can afford to pay at that time. A seller should therefore, at the outset, carefully scrutinise the terms of a documentary credit, ensuring that it conforms with the Incoterm quoted in the commercial documentation and can therefore be met.

Failure to do so, as mentioned above, can have damaging consequences.

2.3.5 Electronic developments Incoterms 2010 covers the use of modern technology in using electronic equivalents of documents, in addition to the more traditional paper-based forms.

2.4 Methods of payment By agreeing to buy goods from the seller, the buyer undertakes to pay for them on delivery or as otherwise agreed in the sales contract. This payment obligation forms part of the sales contract itself. In order to perform its payment obligation towards the seller, the buyer concludes legally separate agreements with its bank, and this section provides an overview of the main methods of payment used for export sales.

2.4.1 Methods of payment 2.4.1.1 Payment in advance A buyer may make payment to a seller in advance, before the goods are shipped. The reasons for adopting this method may be summarised as follows:

The seller may be unwilling to ship goods to the country of the buyer for reasons of country risk.

The buyer may wish to encourage the seller into a long-term trade relationship. The seller may not have finance with which to buy or prepare the goods for shipment. The buyer feels comfortable with its relationship with the seller and with both credit and

country risk.


2.4.1.2 Open account trading When business is conducted on open account terms, the seller dispatches goods to the buyer and, at the same time, sends the buyer an invoice (together with other appropriate documents) for payment on an agreed date or at the end of an agreed period. A typical example of an agreed period is for payment to be made at the end of the month following the month of shipment. The buyer makes arrangements to pay on the relevant date according to the terms of the agreement and, for this purpose, may use any appropriate payment method, such as an international bank transfer or cheque.

Open account trading is most commonly used in situations in which the two companies concerned have a long-established trading relationship. For example, transactions between sellers and buyers in countries in Western Europe and the USA are often conducted on this basis. In some cases, sellers also use the procedure as a way to secure contracts with parties in a number of developing countries in which documentary credit terms have applied in the past.

Open account trading offers several advantages: in particular, it is simple to administer and involves minimal banking fees or other costs. The system is particularly attractive to buyers because it affords them the opportunity of examining the goods before they have to make payment. Sellers using open account methods obtain no security for payment and have to rely entirely on the creditworthiness and good faith of the buyer. This may be contrasted with the situation under documentary credits and documentary collections, in which the seller obtains the security of a bank undertaking or a bank retaining control of the documents relating to the merchandise. The only involvement by banks in open account trading is in the transfer of funds from buyer to seller.

2.4.1.3 Documentary collection Under a documentary collection, the seller ships the goods to the buyer in the importing country. At the same time, it hands over to its own bank documents relating to the goods and their shipment. Examples of common documents are bills of lading, commercial invoices, cargo insurance documents and certificates of origin. The bank forwards these to a correspondent bank in the buyers country, which may be the bankers of the buyer, to handle the documents in accordance with the instructions of the seller, as instructed by the sellers bank in its collection instruction.

Under this procedure, the banks channel the documents, but they do not themselves give any payment undertaking. This solution offers less security than a documentary credit, but, in return, the costs are lower. The solution nonetheless gives the seller a measure of security for payment. The sellers interest is best served where the buyer is not able to obtain possession of the goods without the presentation of shipping documents that are sent through the banking system by the seller. The full security of a documentary collection applies only if the transport document is a negotiable bill of lading and/or if the goods are consigned to the bank in the importing country, with the consent of that bank.

If the seller has agreed to supply the goods on short-term credit, it can stipulate that the documents be handed over against the buyers acceptance of a bill of exchange or signature on a promissory note. The seller may be able to discount the bill or note in return for an immediate payment. The international rules governing collections are the ICC Uniform Rules for Collections, Publication No 522.

2.4.1.4 Documentary credits Documentary credits constitute the main subject matter of this book and their features and operation are accordingly described in detail in other chapters. The documentary credit structure provides the seller with an independent bank undertaking of payment. The buyer, on the other hand, knows that payment will not be made unless the seller presents


documentary evidence covering the goods and their shipment. The role of a documentary credit as a method of payment is discussed in Section 2.4.3 of this chapter.

2.4.2 Bills of exchange/promissory notes as instruments of negotiation and as instruments for avalisation or forfaiting in collections and documentary credits Negotiable instruments, such as bills of exchange (also known as drafts) and promissory notes, are a frequent feature of export sales throughout the world. They are employed both as a means of extending credit to the buyer usually on a short-term basis and as a device to provide the seller with a negotiable security for payment.

For example, a seller in one country may contract to ship machine parts to a buyer in another country. Payment is to take place 60 days from the date of shipment. The seller dispatches the goods and sends the buyer the shipping documents, which may include a bill of exchange drawn on the buyer payable to the seller at the end of the 60-day period and signed by the seller as drawer.

The bill of exchange orders the drawee (the buyer) to pay the agreed sum on the stipulated date. The buyer evidences acceptance of the order to pay by endorsing it and returning it to the seller (the specific method of acceptance, ie signature on the front or back, the use of acceptance stamps and other information contained on the draft will be determined by local law or bank regulation). The buyers acceptance constitutes an unconditional payment undertaking by the acceptor (the buyer) who is thereby obligated to pay the instrument at maturity independently of its obligations under the underlying sales agreement. The rights of the payee are fully negotiable and can be transferred to another person by endorsing and handing over the instrument. This means that the seller may be able to obtain an immediate payment before the maturity date by discounting the instrument with a bank or other institution that is willing to do so.

The above practice is commonly employed in foreign trade and is frequently used for sales between countries in Asia. The discounting of bills is an important activity for many banks in that region, which offer trade-financing services. The banking facility offered may be referred to as a trade bills or acceptance bills service, or some similar term. Although bills of exchange are the type of negotiable instrument most frequently encountered in international trade, promissory notes may also be used. These have a similar effect, but they are drawn up and signed directly by the person undertaking provide a means whereby a payment undertaking can be detached from any underlying commercial or financial contract and issued in the form of an independent document that can be transferred from one person to another.

Cheques, bills of exchange and promissory notes provide the main examples of negotiable instruments. The payment undertaking contained in these documents can also be guaranteed by a third party, such as a bank. Negotiable instruments drafts in particular play a key role in the payment mechanism under many documentary credits. This is because, in some cases, the credit is made available by acceptance or negotiation of a draft.

2.4.2.1 Legal requirements governing negotiable instruments Negotiable instruments and the rights of parties to them are governed in most countries by detailed legislation. This varies from one country to another, although a set of international conventions drawn up in Geneva in the 1930s provide a common form for a large number of European systems. Britain applies its own legislative rules, which have influenced other countries, the systems of which are based on English legal principles. In the USA, the Uniform Commercial Code provides detailed law on negotiable instruments. These sources provide the main sets of rules on negotiable instruments. In addition, the UN Commission on


International Trade Law (UNCITRAL) has developed a model law for international negotiable instruments.

Negotiable instruments have special legal effects that concern the rights and obligations of third parties, as well as the parties who originally created the instrument. For this reason, documents have to conform to strict formal requirements in order to be legally accepted as negotiable instruments. These requirements are established in national legislation and in the applicable international conventions. Typically, the requirements include written form, signature and the need for the payment undertaking or order to be expressed in unconditional terms.

Under a bill of exchange, the drawer writes and signs the bill instructing the drawee a bank, in the case of bills under documentary credits to pay a specified sum of money either to a third party or to the drawer (the payee). The bill may either call for payment on presentation (a sight draft) or on a specified future date or a determinable event (a tenor or usance draft).

The payment order must be unconditional. A tenor draft may be presented to the drawee for acceptance. The drawee accepts the draft by signing either on the back or front, according to local custom and law. Acceptance constitutes an unconditional undertaking to pay the draft at maturity. The payee and subsequent holders can negotiate (discount) the bill. This means that they can sell their rights in the bill to a third party, who then becomes the holder. In return for making immediate cash payment, the party buying the bill often pays a discounted amount, which is less than the face value of the bill. This difference between the amount paid and the full amount payable on the bill at a later date represents the buyers interest charge, opportunity costs and assumption of risk.

Drafts are normally made payable to a particular party and, if so, are transferred by endorsement and delivery. (The latter is the legal term for the physical handing over of the document.) But they can also be made payable to bearer that is, the person duly holding the bill at any particular time. In this event, they do not name the bearer and they are transferred by delivery alone.

The legal structure of a cheque is similar to that of a bill of exchange. Unlike a bill of exchange, however, a cheque must be drawn on a bank and it is payable upon presentation to that bank.

A promissory note also has most of the same features as a bill of exchange. The essential difference is that it is not an order to another party to pay, but a direct promise of payment by the party who signs the note (the maker). In the same way as the bill of exchange, it must be drawn up in unconditional terms.

2.4.2.2 Avalisation In some countries, a bank or other party can guarantee payment of a draft or promissory note by giving its aval. By signing the note in this way on the back, the bank or other organisation commits itself unconditionally to pay should the maker or drawee default. The practice is well established by legislation in most European countries in particular, those that have adopted the Geneva Convention but there is no precise equivalent in legal systems based on English law.

The benefit of an aval is transferred automatically when the note is negotiated. Accordingly, the use of an aval is a particularly convenient way of dealing with commercial paper underwritten by banks in the secondary markets. Each person in the chain can claim against previous holders and the drawer, if the draft is not honoured, whether or not it has been accepted. A party negotiating a draft thus acquires a right of recourse, in case of dishonour, against the party endorsing the draft and to previous endorsers. The mere drawing up of a bill of exchange does not oblige the drawee to pay. The drawee is bound by the bill only upon acceptance.


2.4.2.3 Holder in due course A vital concept in enforcing payment under negotiable instruments is that of the holder in due course. As mentioned above, such instruments are legally separate from any underlying transaction. Holders acquire their right to claim payment from endorsement and delivery of the instrument. Their rights are not generally affected by disputes on the rights and wrongs of any commercial contract that led to the instrument being granted.

To benefit fully from the protection, the holder must be a holder in due course. This means that the holder must have taken the instrument in good faith without notice of any defect in its title. Under English law, for instance, the holder is fully protected only if, in addition, they gave valuable consideration normally money payment for the instrument. Suppose a thief steals a bill of exchange and forges an endorsement on it: under English law, the drawer and endorsers prior to the forged endorsement are no longer liable to subsequent holders. Later endorsers may still be liable to subsequent holders. Many other legal systems, including those covered by the Geneva Convention, consider that the chain of title is not broken by the forgery provided that the subsequent holder takes possession without notice of the theft.

2.4.2.4 Dishonour All legal systems establish precise formalities to be observed in case of dishonour (ie non-payment). English law provides for notice to be given to all parties affected. Many other countries provide a procedure called protest. Where this applies, the act of non-payment has to be officially established and stamped on the instrument by a public notary.

2.4.2.5 Forfaiting The term forfaiting describes the formal arrangement or agreement between a seller and a lender by means of which the seller is to receive payment for export receivables from the lender, without recourse on the seller against the security of bills of exchange avalised (guaranteed by a bank) acceptable to the lender. This device also sometimes referred to as a forfait financing has a number of applications. Its single greatest use is for the medium-term financing of exports of capital goods and equipment in cases in which official export credit support is not available. It provides a flexible means whereby a bank or other institution in the sellers country can extend credit to the buyer, backed by the guarantee of a bank in the importing country.

Essentially, forfaiting works as follows.

The seller and buyer agree the terms of sale, including the granting of medium-term credit to the buyer for example, over a period of five years with quarterly repayments. At the same time, the seller checks with the forfaiter a bank or specialist institution in its own country that finance will be available for the transaction. The buyer accepts a series of drafts or signs a set of promissory notes corresponding to the instalment dates for repayment of the agreed credit. These bills or notes are guaranteed by the buyers bank. This takes the form either ofa separate guarantee or of a special endorsement on the bill or note, known as an aval. (Rights to payment under documentary credits are also sometimes accepted as security in forfaiting deals.)

The seller presents these bills or notes to the forfaiter. The latter buys them from the seller for an immediate discounted cash payment. The discounted sum received by the seller corresponds to the sale price agreed with the buyer. The difference between that amount and the total for which the bills or notes have been drawn up corresponds to the interest payment to be made by the buyer in return for being granted credit terms. The forfaiter makes its profit on the transaction out of the difference between the discounted price paid and the total sum payable to the forfaiter under the bills or notes. The forfaiter can either hold onto the bills or notes and present them for payment on the maturity dates, or sell them in the secondary markets that exist for trading in such instruments.


An essential element of forfaiting is that the forfaiter buys the bills or notes from the seller without recourse to the seller. This means that the forfaiter and not the seller bears the loss if the buyer and the guaranteeing bank default or if, for any reason, funds cannot be transferred out of the buyers or guaranteeing banks country. Moreover, the seller will have obtained a commitment from a forfaiter before concluding its deal with the buyer. Accordingly, the seller obtains a similar type of bank undertaking to that obtainable under a confirmed irrevocable documentary credit, but in a situation in which longer-term credit is being granted to the buyer.

2.4.3 The documentary credit as a method of payment, and the autonomy of documentary credits (the independence principle) The principal four methods of payment outlined in Section 2.4.1 above may be summarised briefly as follows.

Advance payment The seller does not dispatch goods before receiving payment. The buyer sends payment before goods are dispatched.

Open account The seller dispatches goods before receiving payment. The buyer pays after dispatch of goods and often after receipt of payment on the

sale of goods.

Documentary collection The seller dispatches goods before receiving payment. The buyer pays upon receipt of shipping documents covering the goods, or on other

terms stipulated in the collection instruction.

In all of the above cases, either the buyer or the seller has to depend upon the good faith and performance of the other for the smooth exchange of goods for payment. In contrast, the documentary credit provides the buyer and seller with independent assurance in the exchange of goods for payment. The seller has the irrevocable undertaking of the issuing bank (and the separate irrevocable undertaking of the confirming bank, in the case of a confirmed documentary credit) that it will receive payment, provided the following conditions are satisfied:

The seller presents the documents as stipulated in the documentary credit. The terms and conditions of the documentary credit are complied with.

The issuing bank or confirming bank undertaking is addressed directly to the seller (beneficiary) and is a legally binding undertaking. The issuing bank or confirming bank effects payment without recourse to the seller (beneficiary), which means that the payment is final and there can be no claim upon the seller (beneficiary) for refund or repayment. The buyer, as applicant of the documentary credit, has the undertaking of the issuing bank that no payment will be made under the documentary credit unless the beneficiary has:

presented the documents as stipulated in the documentary credit; and complied with the terms and conditions of the documentary credit in the presentation of

documents. The applicants mandate to the issuing bank is on the above basis. In view of the comfort provided to both the beneficiary and the applicant by the independent undertaking of a bank, documentary credits are often a preferred method of payment in international trade.


The autonomy of the documentary credit has been upheld in the courts of many countries. As a general rule, courts in most countries are reluctant to interfere with the concept of the autonomy of documentary credits and any party seeking to obtain an injunction preventing a bank from honouring its obligations under a documentary credit would have an onerous task in convincing the court of many matters even including that there has been fraud and that the granting of an injunction is the correct course to follow in the circumstances. It will be seen that the autonomous nature of documentary credits is:

articulated in UCP 600; made clear in the wording of the undertaking given by banks to a beneficiary in the

documentary credit itself; and repeatedly upheld in courts.

The autonomy of documentary credits is evidenced in the following articles of UCP 600, the extracts and texts of which are shown below.

2.4.3.1 Article 2 definitions Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation.

Complying presentation means a presentation that is in accordance with the terms and conditions of the credit, the applicable provisions of these rules and international standard banking practice. Attention is drawn to the definition of complying presentation and the fact that honour (ie to pay at sight, to incur a deferred payment undertaking and pay at maturity or to accept a draft drawn by the beneficiary and pay at maturity) or negotiation is made against a presentation that is in accordance with the terms and conditions of the documentary credit, the applicable provisions of UCP 600 and international standard banking practice. It should be emphasised that this is the basic condition of all documentary credits and there are no other conditions.

2.4.3.2 Article 4 credits v contracts a. A credit by its nature is a separate transaction from the sale or other contract on which it

may be based. Banks are in no way concerned with or bound by such contract, even if any reference whatsoever to it is included in the credit. Consequently, the undertaking of a bank to honour, to negotiate or to fulfil any other obligation under the credit is not subject to claims or defences by the applicant resulting from its relationships with the issuing bank or the beneficiary. A beneficiary can in no case avail itself of the contractual relationships existing between banks or between the applicant and the issuing bank.

An issuing bank should discourage any attempt by the applicant to include, as an integral part of the credit, copies of the underlying contract, proforma invoice and the like. Attention is drawn to sub-article 4(a) above, which provides indisputable evidence that sales and other contracts have nothing to do with the credit transaction, which is separate. Sub-article 4(a) also protects the independence of the issuing banks undertaking further by indicating that such undertaking is not, in any way, affected by the applicants relationship with either the issuing bank or the beneficiary. Sub-article 4(b) enforces the position that it should be the contents of the documentary credit to which the beneficiary is required to adhere and that any conditions in the sales or other contract that are pertinent to the actions of the beneficiary must be incorporated into the documentary credit and must not form part of any integral attachment.


2.4.3.3 Article 5 Documents v goods, services or performance Banks deal with documents and not with goods, services or performance to which the documents may relate. Article 5 states, in simple and clear language, that banks deal with documents and are not concerned with goods, services or performance to which the documents may relate.

2.4.3.4 Article 7 Issuing bank undertaking a. Provided that the stipulated documents are presented to the nominated bank or to the

issuing bank and that they constitute a complying presentation, the issuing bank must honour if the credit is available by:

i. sight payment, deferred payment or acceptance with the issuing bank; ii. sight payment with a nominated bank and that nominated bank does not pay; iii. deferred payment with a nominated bank and that nominated bank does not incur

its deferred payment undertaking or, having incurred its deferred payment undertaking, does not pay at maturity;

iv. acceptance with a nominated bank and that nominated bank does not accept a draft drawn on it or, having accepted a draft drawn on it, does not pay at maturity;

v. negotiation with a nominated bank and that nominated bank does not negotiate.

b. An issuing bank is irrevocably bound to honour as of the time it issues the credit.

c. An issuing bank undertakes to reimburse a nominated bank that has honoured or negotiated a complying presentation and forwarded the documents to the issuing bank. Reimbursement for the amount of a complying presentation under a credit available by acceptance or deferred payment is due at maturity, whether or not the nominated bank prepaid or purchased before maturity. An issuing banks undertaking to reimburse a nominated bank is independent of the issuing banks undertaking to the beneficiary.

2.4.3.5 Article 8 Confirming bank undertaking a. Provided that the stipulated documents are presented to the confirming bank or to any

other nominated bank and that they constitute a complying presentation, the confirming bank must:

i. honour, if the credit is available by ii. sight payment, deferred payment or acceptance with the confirming bank; iii. sight payment with another nominated bank and that nominated bank does not pay; iv. deferred payment with another nominated bank and that nominated bank does not

incur its deferred payment undertaking or, having incurred its deferred payment undertaking, does not pay at maturity;

v. acceptance with another nominated bank and that nominated bank does not accept a draft drawn on it or, having accepted a draft drawn on it, does not pay at maturity;

vi. negotiation with another nominated bank and that nominated bank does not negotiate.

vii. negotiate, without recourse, if the credit is available by negotiation with the confirming bank.

b. A confirming bank is irrevocably bound to honour or negotiate as of the time it adds its confirmation to the credit.

c. A confirming bank undertakes to reimburse another nominated bank that has honoured or negotiated a complying presentation and forwarded the documents to the confirming bank. Reimbursement for the amount of a complying presentation under a credit available by acceptance or deferred payment is due at maturity, whether or not another nominated bank prepaid or purchased before maturity. A confirming banks undertaking


to reimburse another nominated bank is independent of the confirming banks undertaking to the beneficiary.

d. If a bank is authorised or requested by the issuing bank to confirm a credit but is not prepared to do so, it must inform the issuing bank without delay and may advise the credit without confirmation.

Note especially the reiteration of the liabilities of the issuing bank and the confirming bank:

to honour, provided that the stipulated documents are presented and that the terms and conditions of the documentary credit have been complied with (sub-articles 7(a)(iv), 8(a)(i)(ae); and for a confirming bank, to negotiate without recourse (sub-article 8(a)(ii)).

2.5 Questions 1. What are the essential issues upon which the buyer and seller should agree in a sales

agreement? 2. Why is it important that both buyers and sellers understand the three-letter Incoterm

abbreviations used in their sale agreement? 3. If they do not understand them, where and how would you direct them to find out their

meaning? 4. Are there any Incoterms that you do not fully understand? 5. Who is not involved in a sales agreement? 6. Can you recall the four methods of payment? Can you recall the basic features of each

method? 7. Can you recall the parties to a bill of exchange? 8. What is an aval? 9. What is forfaiting? 10. Can you recall why documentary credits are a preferred method of payment in

comparison with advance payment, open account or documentary collection? 11. Can you quote the relevant UCP articles to beneficiaries and applicants that will show

that you, as a documentary credit specialist, are not concerned with the sales contract/goods/services or performance?

12. What are possibly the only grounds upon which courts should uphold an application for an injunction?

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CDCS Incoterms 2010 Supplement FINAL Sec

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