Many African countries are brewing policies for delivery of goods without B/L, export companies face the risk of shorting the payment

The China Association of Foreign Economic and Trade Enterprises recently issued an urgent notice. According to the regulations of the General Administration of Taxation of Angola, due to the continuous shortage of foreign exchange, the Angolan government allows the delivery of imported goods to Angola without B/L.
    Coincidentally, in addition to Angola, other African countries, including Congo and other countries, are also brewing a no-bill-of-bill-delivery policy.
    "This policy undoubtedly makes the shipper likely to face the risk of not being able to receive the payment. Even the settlement of the letter of credit cannot be exempted from this risk." Cai Jiaxiang, vice president of the China Association of Foreign Economic and Trade Enterprises, said in an interview with our reporter. In the current situation, it is recommended that export companies unload and resell the goods in transit that have not received the payment at the transit port, or notify the customer to pay the payment in full before shipping to Angola. In the future, exports to Angola must use the pre-T/T foreign exchange collection method (that is, the full payment is received before delivery), otherwise, the payment will be empty.
Angola's delivery of goods without B/L is a "rogue policy"
    In Cai Jiaxiang's view, the policy of delivering goods without B/Ls implemented by the Angolan government is in fact a "rogue policy."
    Delivery without bill of lading, also known as delivery without original bill of lading, refers to the carrier or its agent (forwarding), port authority, warehouse manager in accordance with the consignee or notice recorded on the bill of lading without taking back the original bill of lading The act of releasing the goods on the basis of a copy of the bill of lading or a copy of the bill of lading with a letter of guarantee.
    "In the past judicial practice of maritime disputes in our country, the court generally held that: according to international practice, the delivery of goods without an original bill of lading is a fundamental breach of contract, and the carrier shall not enjoy the protection of the exemption and limitation of liability clauses in the bill of lading." Beijing Jijia Law Firm Lawyer Li Hongjiang said in an interview with a reporter from China Trade News that in accordance with international trade practices 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 forming a relationship with the holder of the bill of lading. Carriage contract, the carrier can only correctly perform the carriage contract after the goods are safely delivered to the destination port and delivered correctly; and the delivery of the goods without B/L will cause a huge risk to the seller, and once the consignor refuses to perform the goods after receiving the goods The payment obligation will completely lose the trade security brought about by the delivery of goods on demand.
    Li Hongjiang said that, however, as the speed of the carrier increased significantly or the bill of lading transfer procedure caused more and more delays, sometimes the goods may arrive at the port of destination before the original bill of lading. The phenomenon of holding and pressing the port is not conducive to the requirement of high-speed circulation of goods. This is the practical basis for the delivery of goods without B/L.
    “There are indeed some acts of delivery of goods without B/L in international trade, but they are all personal acts. They occur between the shipowner/carrier and the holder of the bill of lading who have the obligation of carriage in international cargo transportation.” Cai Jiaxiang said, for a country The implementation of the policy of delivery of goods without B/L is really unheard of.
    Lin Yun, deputy director of the Cargo Owners Department of the China Association of Foreign Economic and Trade Enterprises, told this reporter that the delivery of goods without B/L means that Angolan importers can clear the goods and take them away without presenting the original bill of lading, that is, as long as they are shipped to Angolan ports. The importer can take delivery of the goods unconditionally. As a document of property rights, the original bill of lading is equivalent to a piece of blank paper and is useless.
    "Because the Angolan government stipulates that the goods can be picked up without a bill of lading, even if there is a letter of credit, I am afraid that the risk of not being able to receive the payment can not be exempted." Lin Yun said.
    The so-called letter of credit (L/C) refers to the issuing bank at the request of the applicant (buyer) and in accordance with its instructions to the beneficiary with a certain amount and within a certain period of time. A written guarantee document for the payment of the 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 the Angolan importers will pay is entirely based on conscience without any restrictions.
Companies should avoid risks
    Regarding the reasons for the Angolan government's policy of delivering goods without B/L, the China Association of Foreign Economic and Trade Enterprises reminded it as "due to the continued shortage of foreign exchange."
    At present, the common practice in international trade is to settle foreign exchange in U.S. dollars. However, Angola is currently experiencing a serious shortage of foreign exchange reserves due to the international oil plunge. At present, it is very difficult to exchange dollars, and there is no market.
    Regardless of the reason, the relevant shipping company, such as MSC (Mediterranean Shipping), has notified its agent to contact the shipper as soon as possible to confirm the following matters for the goods that have been shipped in transit:
    1. Whether the shipper is willing to continue to ship the goods to Angola, or whether the shipper needs the shipping company to unload the involved containers at the transshipment port Sines (Portugal), Cape Town or Durban (South Africa) (which can be unloaded in which The transshipment depends on the actual transshipment situation), so the cost incurred shall be borne by the shipper.
    2. The shipping company shall not be liable for the consequences arising from the above policies of the Angolan government, and shall not bear the risks/responsibility/costs arising from the delivery of goods without B/L at the port of destination.
    Cai Jiaxiang reminded that in the future, export companies should require customers to pay all the goods before exporting, and then ship the goods for export under the premise of ensuring the safe collection of foreign exchange.
    Once the policy of Angola's delivery of goods without B/L is implemented, it will seriously affect Sino-Angola trade.
    Currently, Angola is China's second largest trading partner in Africa. In 2014, China-Angola trade volume was 37.07 billion U.S. dollars, a year-on-year increase of 3.2%. Among them, China’s export value was US$5.975 billion, a year-on-year increase of 50.7%; imports were US$31.097 billion, a year-on-year decrease of 2.7%. China mainly imports crude oil and natural gas from Angola, and exports machinery, steel, automobiles and high-tech products to Angola.
    What's more serious is that not only Angola, but the entire Africa is brewing a policy of delivery of goods without B/L.
    "This may be a way to limit China's trade surplus, and the result will be to the detriment of others and ourselves." Li Hongjiang believes that for China, China's exports to Africa will fall sharply; for African countries, they do not follow international trade practices. When doing things with rules, of course, more and more countries will be squeezed out, and even international trade will not take place with them, and the people will not be able to enjoy high-quality and cheap foreign goods.

Source: China Trade News