FCR'S

[KimChristensen]

Dear Yahya,

Thanks for your frank comment. You are of course right: We should not mislead the trading parties

The point I was trying to make, is that if this structure has been agreed between the trading parties – based on the specific deal; i.e. they have carefully evaluated how to best do this transaction – and know what they are doing – then I simply don’t see why we as bankers should obstruct that – especially if it can be transformed into clear and precise documentary requirements.

To me this FCR example is “mostly harmless” (especially after Peter have learned from experience and adjusted the wording), and I guess that this would not be that uncommon outside in the “real world”… I think that Peter is doing exactly what the ICC suggests: since this is not a transport document – certain articles that would otherwise apply – does not apply here – therefore the relevant issues are stated more precise in the L/C.

Best regards
Kim

[edited 11/28/2005 11:10:09 AM]

[SJefferis]

I seem to have started something here. Perhaps I can explain the background behind the use of FCR's in this case and see what you all think.

We are one of a number of banks that deal with a company that imports 'Household name brands'
(electrical, audio, etc) from the far east to the EU. Most goods come through their subsidiary company in Hong Kong. The idea of using FCR's is so they can consolidate their shipments and save shipping costs.
The forwarders handle all the paperwork and issue the FCR which serves the purpose of the L/c.
Separate B/L's are issued to cover the container which are sent directly to the applicant.
Because the terms are FOB, a 'dated on board' notation covers that aspect of the transaction.
As this was a fairly new concept for us, there was a bit of a learning curve in getting the wording of the L/c's right, but generally the customer is happy, the shipping line (in this case Maersk) are happy and now that the parties know what is required
the banks are happy because the docs are easy to deal with and are usually in order.

Hope that helps

Regards

Peter

[Yahya]

I'm happy too ,
Thank you

[POLTERD.]

1.-fcr is not a transport doc.and cannot show an on board notation because a fcr only evidence that a forwarding agent took the goods into custody at disposal of a nominated party (applicant or others),ussualy good being stored in an authorized/specific area of the port.regarding issuance date,as it is understood that such document is issued before the goods are loaded on the vessel and consequently have an earlier issuance date than the b/l,i think that if fcr is dated after latest date of shipment specified under l/c,it is discrepancy.however,when a fcr is asked for,issuing bank should specify under field 48 "after fcr date" i/o "after shipment date".