Beneficiary Certificate – ISBP 745 | Trade Samaritan

Beneficiary Certificate – ISBP 745

Beneficiary certificate is a document that provides beneficiary admittance that the action or the event stipulated in the credit has been fulfilled.

Beneficiary Certificate is prepared by the seller and is a document that confirms in writing that beneficiary has performed a particular action.

Inconsistency issues

Beneficiary Certificate -Trade Samamritan

When a credit calls for Beneficiary certificate, Certificate of origin, Weight list, Packing list and such other administrative and compliance related documents, the span of documentary scrutiny widens. The exporter, doc preparer and checkers therefore have to be extra vigilant with respect to the consistency across all the documents with respect to the dates, content, consignor/consignee details, goods description etc.

Any discrepancy arising from inconsistency in the documents can be avoided beforehand by calling for an amendment.

While UCP 600 does not cover this document, ISBP 745 has introduced guiding procedures for Beneficiary certificate.

The common clauses used in the credit which calls for a beneficiary certificate to obtain compliance in writing is as follows:

Beneficiary’s letter stating that one complete set of non-negotiable documents have been sent to the importer directly within 05 (five) days of shipment by courier, receipt of which must be attached with the documents.

Beneficiary’s declaration certifying that goods have been shipped as per specification, description, quality and quantity mentioned in the LC/ Proforma invoice.

That the goods in question conform to the specifications of the sales contract.

That the goods have been shipped on board a particular vessel or aircraft by certain date.

That certain documents such as bills of lading, inspection certificates etc. have been sent by airmail or courier to the buyer/importer or their agent.

That the boxes have been marked as ‘IPPC’ or ‘Fragile’ ( ie can relate to shipping marks or packaging)

Basic Features and Guiding Principles

1. The function of  beneficiary certificate is to certify actions and documents to the buyer.

2. ISBP 745 does not specify any format for beneficiary certificate, it is supposed to confirm the action called for in the credit and is usually issued on beneficiary company’s letterhead.

3. When a credit calls for a beneficiary certificate, any of the following is acceptable

  • Signed document and titled same as the credit
  • Bearing a title reflecting the type of certification that has been requested in the credit
  • Untitled document but fulfilling the function by containing the data and certification required by the credit

4. Beneficiary certificate must be signed by or on behalf of the beneficiary

5. Data provided on the beneficiary certificate should not be identical but should not contradict with the requirement of the credit. The certificate should evidence the fulfillment and certify in writing the necessary event/requirement prescribed in the credit. The content on the certificate of origin need not be a replica of the wordings used in the  credit but should clearly indicate that requirement prescribed by the credit has been fulfilled.

6. Unless specifically called for by the credit, beneficiary certificate need not include the following items:

  • Goods description
  • Any other reference to the credit
  • Any other reference to the stipulated document

As discussed in the beginning of this article, it is critical to apply the principle of overall consistency between all the documents presented, for instance any inconsistency between beneficiary certificate and certificate of origin will lead to documentary discrepancy.

If requirement for the beneficiary certificate were to state that 1 set of original documents are to be sent within 7 days of shipment and a certificate of origin from the chamber of commerce shows a date of issue 10 days after shipment, a discrepancy will be raised by the doc checker.

Comments:

  • Ahmed Sirag El-Kilany

    Very useful