ChapterEightCommercialDocumentsin
InternationalTrade8.1Introduction8.2CommercialInvoice8.3ProFormaInvoice8.4MarineBillofLading8.5OtherTransportDocuments8.6InsuranceDocument
8.1Introduction
Theimportanceofdocumentsinmoderninternationalsettlementcanbeseenfromthefollowingperspectives.Themoderninternationalsettlementcentersondocuments.Themoderninternationalsettlementhasevolvedfromcashsettlementstonon-cashsettlementswherecreditinstrumentshavetakentheplaceofcashasmediumsofexchange.Inthesettlementprocess,therelevantparties,thatis,thetradersandthebanksaredealingwithdocumentsratherthanthephysicalgoods.
Commercialdocumentsaretheevidenceofperformanceofthesalescontract.Asalescontractwillnormallydescribeandstipulatetheconditionsofthegoods,itsshipmentandinsurancerequirementsandpaymentterms.Allofthesewillbereflectedinthecorrespondingcommercialdocuments.Forexample,thecommercialinvoice,thepackinglistandtheinspectioncertificatewilldescribetheprice,packing,quantityandqualityofthegoods.Thetransportdocumentswillshowevidencethatthegoodsarenotonlydelivered,butalsodeliveredinthetimelyfashionrequired.Similarly,theinsurancepolicywillindicatewhetherthegoodsarecorrectlycoveredandpaymentmethodswillexpressclearlythewaytocollect/demandpayment.
Documentsrepresenttitletothegoods.Withthedevelopmentininternationalsettlement,somecommercialdocumentshaveevolvedtobecometitledocumentssignifyingtheownershipoftheholdertothephysicalgoods.Therefore,itissafetomaketheconclusionthattitledocumentsareequaltothephysicalgoods.Forthisreason,bankswilleffectpaymentagainstcorrectdocuments;theexporterwillbedeemedtomakedeliveryoncehesubmitsthedocumentsandtheimporterisconsideredtobeinpossessionofthegoodswiththetitledocumen