Forwarders Cargo Receipt(FCR) ART 14F

RashidHasan · Post by **RashidHasan** » Mon Mar 15, 2010 12:00 am

Forwarders cargo receipt is not a Transport document and as such when a letter of credit(Subject to UCP600) calls for FCR, document checking will be based on Art 14F.

What are the potential risk that a confirming bank may face and how can these be mitgated.

NigelHolt · Post by **NigelHolt** » Tue Mar 16, 2010 12:00 am

It is unclear to me why this should be considered as posing a greater risk to the confirming bank than any other documentary requirement.

RashidHasan · Post by **RashidHasan** » Tue Mar 16, 2010 12:00 am

An example of such risk is the fact that there is no bill of lading. From compliance perspective we may not be able to track the movement of goods on IMB for AML purposes.

NigelHolt · Post by **NigelHolt** » Tue Mar 16, 2010 12:00 am

I find it extraordinary that any bank would track the movement of goods on IMB for AML purposes. Anyway, as a UK based 'banker' I do not see an FCR -or any other document- of itself creates any sort of 'compliance' risk (although I would sympathise with the argument that there is a higher risk of a 'sanctions breach' where BLs are required).
[edited 3/16/2010 3:15:55 PM]

GlennRansier_ · Post by **GlennRansier_** » Tue Mar 16, 2010 12:00 am

I agree with the majority of Jermey’s response. Your bank utilizing the IMB review for every shipment is an individual bank policy and while I am somewhat surprised that every shipment is reviewed, I’ve heard that some banks perform this review in a similar manner. Having said this and these are not my recommendations, just some suggestions for you if your bank is concerned with compliance and fraud aspects then depending on the amount of the transaction and whether or not the beneficiary is your client or is a readily recognized entity, you could run a D and B, or equivalent on the company to help offset the individual policy of confirming every shipment. Also, you could also contact the forwarder in these cases to validate or confirm their receipt of the cargo. However, from a UCP and confirming bank point of view, you must confirm that the documents comply within the timeframes mandated in UCP or the LC. The only real risk is whether or not the LC’s terms are clear. If no confusing terms or conditions, then there should not be a risk to the confirmer to examine a FCR versus a transport document.

RashidHasan · Post by **RashidHasan** » Wed Mar 17, 2010 12:00 am

Glenn,
Thanks your comments are helpful.
Jeremy's response about my bank tracking every shipment does not reflect my communication. I only mentioned this as a possible concern.

NigelHolt · Post by **NigelHolt** » Wed Mar 17, 2010 12:00 am

I still remain amazed that this could even be a possible concern.