Recommendations for Foreign Trade Companies Established in Turkey on Making Charter Party Marine Bills of Lading in Accordance with Letter of Credit-L/C Method

Abstract

This study discusses how charter party marine bills of lading should be made in accordance with the letter of credit-L/C method. In an L/C, in order that the obligation of payment of the applicant (issuing) bank and of the confirming bank, if any, against the beneficiary can continue, exporting companies are required to prepare documents in accordance with the UCP 600, ISBP 745 and terms of documentary letter of credit and present them properly (complying presentation). In order to prepare appropriate documents, it is essential for the exporting companies to act according to the three important criteria (letter of credit requirements, UCP 600 and ISPB 745) prevailing in this regard. Since competence of complying presentation requires a certain level of expertise, the exporting companies established in Turkey have experienced difficulties in terms of how to prepare documents and could not get benefit from payment obligation undertaking of the applicant bank and of the confirming bank, if any, due to the presentation of discrepant documents, getting export prices late, and payment of extra fees/commissions. Due to trade property, importing company’s demands and the conditions required by the legislation of the country where the exporting company is established, exporting companies are required to prepare many types of documents. In this study, the common mistakes that exporting companies in Turkey made in preparation of the charter party and the other types of B/Ls are analyzed, the basic and critical features of the charter party B/Ls, in particular, are considered and different and common parts compared to other bill of ladings are evaluated and how they can be organized properly according to letter of credit payment is shown