Section Three
Documents & Review
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Documents are sets of materials to justify the
international trade and thus are the base for
international settlement. In general, documents
required in international settlement include drafts,
invoices, B/L, insurance documents and others
attached. They are useful in the following ways:
Certificate of contract implementation
Claims for cargo
Basis for payment
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Fundamental requirements for preparing documents
mentioned are:
Accuracy. Documents should be reported with the
conformity with other documents related and
certificates involved.
Integrity. Documents should be integrated in terms of
contents, copies and sets.
Without delay. Submitting date under L/C should
follow the shipment date and documents rendering
date as well as validity of L/C.
Good trim.
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Banks under L/C as agencies rely upon documents to
claim rights of customers on their behalf and to
accomplish settlements in international trade.
According to UCP600, only banks specified,
confirming bank and issuing bank are responsible for
the review of documents, and nor are other parties
related. The review of documents is aimed to make
decision on whether the documents are matched
among each other, which entails banks compliance
with such matching principle among certificates and
documents.
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L/C practice involves in only documents’
business. Over years, when banks refer to the
matching principles, they could only review the
careful but artificial conformity among L/C
and documents required, which could be
certified in various editions of UCP. Thus in
practice, provided that the beneficiary submits
documents with such minor discrepancy as
word-spelling error with no ambiguity, the bank
should
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reject payment accordingly, which drives the
L/C a means of payment refusal instead of a
payment tool. Hot discussion and
dissatisfaction concerning the matching
principle follow. UCP 600 thus emphasizes
non-conflict and non-contradiction as actual
conformity and should not be taken by banks as
the reason for payment refusal, which has
greatly facilitated the review of documents.
Learning target:
 1. How to define documentary bills and
invoices?
 2. What do documentary bills and invoices
serve for?
 3. What are the main items involved in each
document?
 4. How are they being reviewed under L/C?
8.1 Draft
 8.1.1 Draft under collection and Draft under
Letter of Credit
 Draft under collection refers to the commercial
draft and financial bill as the certificate of
payment claim issued by the exporter indicating
his eligibility to collect payment and the
dispatch of goods with other commercial
documents attached to certify.
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Draft under Letter of Credit refers to the
unconditional order by the exporter to the
bank, requiring the bank to which it is
addressed to pay on demand or at a fixed future
date a certain sum of money or to the order of
the exporter himself or the person the exporter
specifies. Drafts under Letter of Credit
functions as the certificate of withdraw of
money specified in Letter of Credit related.
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8.1.2 Attentions should be paid when preparing the
draft.
1) Draft under L/C should follow its rules and
regulation of L/C.
2) Draft under collection should be in accordance with
international general practice related and rules of bills.
3) The amount and the currency should not conflict
with L/C and the contract it affiliated with.
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8.1.3 Essentials of Draft Review
Review of documents generally takes the draft and invoice as
the first two documents to review and examine insurance and
shipment documents with invoices as the reference.
(1) Amount
1) The amount in draft could not exceed what L/C
requirement.
2) The currency and amount in draft must in strict conformity
with invoices’.
3) Amount in figures and words agree.
(2) Tenor
1) Issuing date. The issuing date of documentary draft should
not earlier than that of B/L and later than L/C validity.
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2) Presentation date. The presentation date is often
the one specified in L/C.
(3) Parties
1) Payee. Unless otherwise provided in L/C, the payee
is the negotiating bank or the one to the order hereof.
2) Payer. The applicator should not be taken as the
payer in accordance with regulations of L/C.
Negotiating L/C requires draft drawn on it, so the
issuing bank is the payer.
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3) Issuer. The issuer or his or her signature should be
in strict conformity with the beneficiary of L/C.
(4) Others
1) provided that the L/C requires wording of
“DRAWING CLAUSE”, the name of the issuing
bank, L/C No. and the issuing date should be the
same with L/C.
2) If the draft entails endorsement, endorsement
should be made properly rather than be constrained.
3）unless otherwise provided in L/C，draft should
not be issued with no right of resource.
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8.2.1 Commercial Invoice
Commercial invoice is the cargos manifest the exporter trades
to the importer and the payment settlement between them.
Commercial invoice functions as following:
A manifest traded by the exporter to the importer;
Certificate of accounting, valuating and inspection of goods at
the importer’s side;
One of document in a whole set of Customs declaration and
clearance for either exporter or importer;
Payment details substituting the draft;
Details for other documents related.
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8.2.1.1 Invoice Preparing
Commercial invoice contains the major items as invoice
Number, its nomination, issuing date and issuer, the title, the
mark, good description, quantity, unit price and total amount,
among which the good description, unit price and total amount
are critical to the functions outlined above.
1) Seller’ item should be the same with what the L/C and the
contract regulate and filled with full name and address.
2) Buyer’s item is also called the consignee or the receipt, which
should be the same with L/C applicator under L/C payment in
case of no relevant regulations in L/C, or should be the buyer’s
name in the contract or the ordered name under collection.
3) Invoice No. is fabricated by the exporter and should not to
be forgotten, which is the No. of the draft for the same
consignment.
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4) The issuing date of invoice should be later than that of the
L/C’s issuing date and before the shipment date, or at least
before the submitting date or expiry of L/C.
5) Place of departure and the destination should be filled in
accordance with both L/C and B/L.
6) Transportation carriage item should show both carriage
name and voyage No. after the advice from the carriers or
agencies.
7) Marks should be written word by word in accordance with
those in other documents. In case of no regulation in L/C,
marks could be prepared in accordance with contract’s
requirements. And provided that no such specification occurred
in L/C and contract, marks could be printed to the seller’s will
but be shown on all documents related in the same way.
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Here below is the sample of invoice for
reference (8-2).
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(1) Issuer. Under UCP600，the issuer is not required signature
in invoice but required to certify that the issuing of invoice is
taken by the beneficiary.
(2) Receiver. Invoices often types words like “TO”，“SOLD
TO MESSRS”, "FORACCOUNTAND RISK OF MESSRS",
"CONSIGNED TO". The receipt of invoice can be name and
address of importer the applicator if no specific regulation in
L/C.
(3) The description of goods should be the same with L/C’s.
(4) The amount should not be more than L/C’s. The exceeding
amount in invoice should be deducted to collection, unless
otherwise provided in L/C.
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Customs invoice is the document required in its
necessity and form by the Customs at the importer’s
end for Customs clearance and for the purposes as
import totaling, reexamination of origin and
importing commodities’ price make-up.
Customs invoice is used to inspect the cargo listed for
the importer evaluate and levy tariffs by the Customs,
adopted as evidence of cargo origin and examination
for the exporting price by the Custom.
Customs invoice forms are specified particularly by
Customs in importing countries and regions. Canada
and America Customs invoices are the usual.
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Proforma invoice is an informal invoice same
with commercial invoice in contents used for
offer by the exporter. The word proforma” can
be read in proforma invoice and thereof admits
alterations in appliance with signed contract.
Consular invoice can be deemed as legal invoice
or visa invoice, an invoice issued by the
consular in exporting countries or neighboring
regions across the importing countries.
 Consular invoice is taken for institution of
Certificate of Origin and Import License and
statistics collection for importing Customs.
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A manufacturer invoice can be defined as an
invoice priced by local currency issued by the
producer of exporting goods for importing
Customs’ reference to price evaluating and
tariffs levying.
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8.3.1 General Concept
Packing documents aim at showing details of cargo
package, volume and measurement for the importer,
Customs count and for commodity quarantine.
Packing documents includes Packing List (P/L), Weigh
List/Memo and Measurement List. Their contents are
approximately the same with invoices but exclude unit
price and total amount and focus on packing details.
Gross weigh, net weight and measurement are the
particulars. Here below is the sample of packing list for
reference (8-6).
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The packing list is a more detailed version of the
commercial invoice but without price information.
Generally speaking, the packing list should include the
following elements:
Name and address of seller
Name of “packing list”
Name and address of buyer
Invoice number
Order or contract number
Date of issuance
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Quantities and descriptions of the goods
Shipping details including: weight of the
goods, number of packages, and shipping
marks and number
Quantity and description of contents of each
package, carton, crate or container
Any other information as required in the
documentary credit
Here below is the sample for reference.
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Documents are sets of materials to justify the
international trade and thus are the base for
international settlement.
Commercial invoice is the cargos manifest the
exporter trades to the importer and the payment
settlement between them.
Customs invoice is the document required in its
necessity and form by the Customs at the importer’s
end for Customs clearance and for the purposes as
import totaling, reexamination of origin and
importing commodities’ price make-up.
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Proforma invoice is an informal invoice same with
commercial invoice in contents used for offer by the
exporter.
Consular invoice is taken for institution of
Certificate of Origin and Import License and
statistics collection for importing Customs.
A manufacturer invoice can be defined as an invoice
priced by local currency issued by the producer of
exporting goods for importing Customs’ reference to
price evaluating and tariffs levying.
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Draft under collection
托收项下的汇票
Draft under letter of credit
信用证项下的汇票
Customs Invoice
海关发票
Proforma invoice
形式发票
Consular invoice
领事发票
Certified invoice
证实发票
Manufacturer Invoice
制造商发票
Bank invoice
银行发票
Packing list
装箱单
Packing document
包装单据