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Countries Releasing Goods without Documents

Feb 22, 2022 | Business Fraud Case | 0 comments

Many African Countries are Considering the Policy of Releasing Goods without a Single Bill.

In May 2015,the China Association of foreign economic and trade enterprises recently issued an urgent notice. According to the regulations of the Angolan General Administration of Taxation, due to the continuous shortage of foreign exchange, the Angolan government allows the import goods delivered to Angola to be released without bill of lading.

Coincidentally, in addition to Angola, other African countries, including Congo and other countries, are also mulling the policy of releasing goods without a bill of lading.

“There is no doubt that this policy exposes shippers to the risk of not receiving payment, and even a letter of credit settlement cannot eliminate this risk.” CAI Jiaxiang, vice chairman of The China Association of Foreign Trade and Economic Enterprises, said in an interview with the reporter of our newspaper that in view of the current situation, it is suggested that export enterprises should unload and resell the goods in transit that have not received the payment for goods, or inform customers to pay the payment in full before shipping them to Angola. In the future, the export to Angola must use the pre-T/T collection method (that is, after receiving all the payment before delivery), otherwise it will face a situation of empty payment.

Releasing goods without bill of lading in Angola is a “rogue policy”.

In Cai Jiaxiang’s view, the policy of releasing goods without a bill of lading implemented by the Angolan government is in fact a “rogue policy”.

Do not have sheet to put goods, call to do not have original bill of lading to put goods again, it is to show carrier or its agent (freight agent), port administration, storehouse manager is below the circumstance that did not retrieve original bill of lading, the consignee that records on bill of lading or notifier is by duplicate bill of lading or copy of bill of lading, add letter of guarantee the behavior that releases goods.

“In the past judicial practice of maritime disputes in China, the court generally held that according to international practice, payment without original bill of lading is a fundamental breach of contract, and the carrier shall not enjoy the protection of exemption and limitation of liability clauses in the bill of lading.” Li Hongjiang, a lawyer from Beijing Jijia Law Firm, said in an interview with a reporter from China Trade News that according to international trade in goods, the carrier is required to deliver the corresponding goods after seeing the original bill of lading; once the carrier issues the bill of lading, it means In order to form a contract of carriage with the holder of the bill of lading, the carrier can only correctly perform the contract of carriage after the goods are safely delivered to the destination port and delivered correctly; and releasing the goods without a bill of lading will cause huge risks to the seller. If the consignee refuses to perform the payment obligation after receiving the goods, it will completely lose the trade security brought by the delivery of goods upon delivery.

Li Hongjiang said, however, with the significant increase in the speed of the carrier or the delay caused by the bill of lading transfer procedure, sometimes the goods may arrive at the port of destination before the original bill of lading. The mechanical release of goods against documents may lead to the phenomenon of cargo pressure, ship pressure, cabin pressure and port pressure, which is not conducive to the requirements of high-speed circulation of goods. This is the realistic basis of release without bill of lading.

“It is true that there are some acts of releasing goods without documents in international trade, but they are all acts of individuals and occur between the shipowner/carrier and the holder of the bill of lading who has the obligation to carry goods in international transport.” CAI jiaxiang said, for a country to implement no single release policy, he is really unheard of.

Lin Yun, deputy director of the Cargo Owners Department of the China Association of Foreign Trade and Economic Cooperation, told this reporter that releasing the goods without a bill of lading means that the Angolan importer can clear the goods and take them away without showing the original bill of lading, that is, as long as the goods are shipped to the Angolan port Goods, its importer can take delivery unconditionally. As a function of proof of title, the original bill of lading is equivalent to a blank piece of paper and is useless.

“As it is stipulated by the Angolan government to pick up the goods without documents, even if there is a letter of credit, I’m afraid it can’t avoid the risk of not receiving the payment.” Lin Yun said.

The so-called Letter of Credit (L/C) refers to the Letter of Credit issued by the issuing bank to the beneficiary at the request of the applicant (buyer) and according to its instructions, which contains a certain amount of payment within a certain period of time against the stipulated documents. Letter of credit is the most important and commonly used method of payment in international trade.

Lin Yun said that once the policy is implemented, whether and when Angolan importers pay is entirely in accordance with their conscience without any constraints.

Enterprises should avoid risks.

For the angolan government to implement the policy of releasing goods without documents, the China Association of Foreign Trade Enterprises suggested that it was “due to the continuous shortage of foreign exchange”.

At present, the common practice in international trade is to use US dollars to settle foreign exchange. However, Angola is currently facing a serious problem of insufficient foreign exchange reserves due to the slump in international oil. It is very difficult to exchange dollars at the moment, and there is no market for it.

For whatever reason, the shipping company concerned, such as MSc (Mediterranean Shipping), has notified its agent to contact the consignor immediately to confirm the following matters for the goods that have been shipped in transit:

1. Whether the consignor is willing to continue to ship the goods to Angola, or whether the consignor needs the shipping company to unload the containers involved at the transit port Sines (Portugal), Cape Townor Durban (South Africa) (the specific transfer port can be discharged depends on the actual transfer port), The expenses incurred therefrom shall be borne by the consignor.

2. The shipping company shall be exempted from the consequences arising from the above policies of the Angolan government and shall not bear the risks / Responsibilities / expenses arising from the release of goods without bill of lading at the port of destination.

Cai Jiaxiang reminded that in the future, export enterprises should require customers to pay all the payment for goods before exporting, and then ship for export on the premise of ensuring safe foreign exchange collection.

Once Angola’s policy of releasing goods without a single bill is implemented, it will seriously affect the trade between China and Angola. Angola is Now China’s second largest trading partner in Africa. In 2014, the trade volume between China and Angola reached 37.072 billion US dollars, up 3.2% year on year. Among them, China’s export value was 5.975 billion US dollars, up 50.7% year on year; Imports amounted to us $31.097 billion, down 2.7% year on year. China mainly imports crude oil and natural gas from Angola, and exports mechanical and electrical products, steel, automobiles and high-tech products to Angola.

What’s more serious is that the policy of delivery without bill of lading is brewing not only in Angola, but also in Africa as a whole.

“This may be a way to limit China’s trade surplus, and the result is to harm others and not oneself.” Li Hongjiang believes that for China, China’s exports to Africa will drop sharply; for African countries, they do not follow international trade rules. Doing things by rules will of course be crowded out by more and more countries, and even without international trade with them, people will not be able to enjoy high-quality and cheap goods abroad.


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