Featuring: Bob Ronai, Import-Export Services Pty Ltd., Member of the ICC Incoterms Steering Committee

Hugo Verschoren, Consultant, goVer Trade Technologies.

Host: Eleonore Treu, ICC Austria

Incoterms and Letters of Credit

As the golden rule, we often say that Letters of Credit do not deal in contracts, but in documents; which is basically another way of describing the independent principle that rules trade finance instruments, such as Demand Guarantees, or Letters of Credit.

However, some documents, for example, transport documents – such as the Bill of Lading – a beneficiary needs to present are directly linked and a direct result of the underlying contractual relations. To allocate costs, risks and tasks of the transport in an international commercial transaction, parties more often than not, rely on the ICC Incoterms rules which have been recently updated.

In this video, the following topics are covered and discussed:

  • Introduction – Incoterms Rules and Letters of Credit
  • FCA, FAS & FOB – How not to get your goods stuck in the port!
  • On Board Bills of Lading
  • Can you use Incoterms Rules with Letters of Credit?
  • Ex Works (EXW) and Letters of Credit
  • Using FCA, CPT & CIP with Letters of Credit
  • On Board Bills of Lading and Letters of Credit
  • Can you use Letters of Credit in the D Rules?
  • Letters of Credit and the UCP
  • Does FCA work with a Letter of Credit?
  • Will FCA and an Air Waybill work together?
  • The F Rules (FAS, FOB, CFR & CIF) and Letters of Credit
  • Case Study: LCs for purchasing coal – China / South Africa route using DAP
  • Case Study: LCs for kitchenware shipments – Hamburg / Casablanca using FOB
  • Finding out more about Incoterms Rules
  • Conclusions

Disclaimer: The information and opinions expressed do not represent or purport to be legal advice. Neither the relevant expert(s) nor ICC Austria accept any liability for loss, damage or cost (howsoever caused) suffered by any person acting or refraining from acting as a result of the information and opinions provided here.