FCR'S

SJefferis · Post by **SJefferis** » Thu Nov 24, 2005 12:00 am

Further to my previous post on FCR's, we issued a batch of L/c's
requiring presentation of 'original 'on board FCR issued by XXXX dated no later than (see latest shipment date) evidencing receipt of goods for dispatch to YYYY.
We received a set of FCR's where the 'on board' date was 31/10/05
but the FCR's were signed and dated 8/11/05. The LSD was 31/10/05. We rejected these as 'FCR dated after latest shipment date' . The banks abroad
are not happy with our discrepancy.

Are we correct in our interpretation ?

Regards

Peter

KimChristensen · Post by **KimChristensen** » Fri Nov 25, 2005 12:00 am

Dear Peter,

I can see the dilemma, and it is of course hard to argue that the document is ISSUED within the given time frame. Somehow however I do not think that this is absolutely fair. The way that you have worded the requirement it must both be on board and issued before this date, and somehow I would think that the date of interest is the on board date … and that the date of issuance is only important if it is after credit validity and/or period for presentation (if such exist in this case

I know that FCR’s are not transport documents (which is the main problem here) – but please note isbp paragraph 78, which says that a B/L must be issued before of after the on board date. I think that the same principle should apply here. In today’s world it is not uncommon that goods are shipped on Friday, and document issued in the beginning of the following week. These dates are not contradicting or illogical in any way.

So I guess that I would not be happy with your discrepancy either – realizing that I do not hold the strongest case

I am sorry, but that is how I see this …

Best regards
Kim

SJefferis · Post by **SJefferis** » Fri Nov 25, 2005 12:00 am

Thanks Kim,

We have since changed the wording on the L/C's we issue so that the 'on board' date is to be taken as the date of shipment.

As these FCR things seem to be more common these days maybe they deserve a mention in UCP 600?

Thanks

Peter

RolandLeupi · Post by **RolandLeupi** » Fri Nov 25, 2005 12:00 am

I have not understand the question as well as the answer. What has a latest shipment date or an on board date to do with a FCR ?

KimChristensen · Post by **KimChristensen** » Fri Nov 25, 2005 12:00 am

Dear Roland,

Well – if the credit stipulates that the FCR must show that goods are shipped on board – and furthermore says “see latest shipment date” in connexion with the requirement for the FCR – then I think it is fair to say that this date has a lot to do with the FCR.

Best regards
Kim

RolandLeupi · Post by **RolandLeupi** » Fri Nov 25, 2005 12:00 am

Dear Kim,

we would nor issue, neither accept a credit with such a requirement.

KimChristensen · Post by **KimChristensen** » Fri Nov 25, 2005 12:00 am

Dear Roland

Why not?

Best regards
Kim

RolandLeupi · Post by **RolandLeupi** » Fri Nov 25, 2005 12:00 am

let's say it that way
I love contortionists. The art of contortion however, even if mentally only, has no place in trade finance. The FCR is generally requested for transactions made on ex-works basis. The document itselfs is a receipt of goods by the freight forwarder. It is therefore not it's function to indicate particularities other that those for which it has been created for. Such a request by a DC is outside of the basic rules in trading practices.
Nice week end
Roland

KimChristensen · Post by **KimChristensen** » Fri Nov 25, 2005 12:00 am

Dear Roland

That is of course one way to look at it.

Since it is Friday and I am in a jolly good mood – I will offer another one:

To me the L/C is the most flexible instrument in the world – and in theory there is no transaction that it will not be able to handle (although I do admit that there may be some better suited for other “instruments”).
In any case if the good banker can understand the transaction, the document requirements and the conditions – and knows his customer and evaluates that the customer is trustworthy and knows what he is doing – then what is the problem?
I think that we bankers should realize that there may be situations where “untraditional” structures are required – and why not help the trading parties here, e.g. the situation that Peter describes.

Have a nice weekend.

Best regards
Kim

Yahya · Post by **Yahya** » Mon Nov 28, 2005 12:00 am

I agree with Roland, a FCR may be basicly described as a doc. showing receipt or goods by someone (it may be a freight forwarder ) and a FCR can not be applied for the function of an"on board notation". An "on board notation" indicates that the goods have been loaded on board or shipped on a named vessel . How this notation can be given by someone other than the carrier, its agent,or master ? and Where a FCR indicates it ,what would be the meaning of this notation? Nothing !
Dear Kim, we of course want to help the trading parties, but we also should not make them mislead.

Have a nice day,
Yahya