A recent plea for help from a freight forwarder has exposed critical compliance issues in international trade under Letters of Credit (L/C). Even minor discrepancies—such as a single misspelled word—can lead to payment refusal by banks. Meanwhile, restrictions tied to U.S. sanctions on Iran further complicate shipping documentation.
Strict Compliance in L/C Documentation
Under L/C terms, all submitted documents must strictly match the credit requirements. Banks reserve the right to reject payments for even seemingly trivial errors, such as spelling mistakes in product descriptions. Exporters facing such issues should immediately contact buyers to request amendments to either the L/C or the affected documents. If modifications are impossible, they must assess potential financial risks and prepare for possible losses.
Timely Amendments for Shipped Goods
For cargo already in transit, corrections to the Bill of Lading (B/L) via a Carrier Correction Advice (CCA) must be processed swiftly. Airlines require lead time for amendments, and delays can escalate costs and operational risks. Early intervention minimizes both expenses and exposure to non-compliance penalties.
U.S. Sanctions and Consignee Restrictions
Shipments destined for the U.S. involving Iran-related sanctions face heightened scrutiny. The consignee details on the B/L must precisely match the original booking information. If buyers insist on modifying the consignee, exporters must obtain a port confirmation letter verifying that the new party is not on any sanctions list. Shipping lines are legally obligated to enforce these rules; violations could result in severe fines.
International trade operates as a chain of interdependent processes, where minor oversights can jeopardize payment. Comprehensive compliance risk management must be integrated at every stage—from documentation to delivery—to safeguard transactions.