What are the key points to review in foreign trade document audit?

Document review is a key step to ensure safe receipt of payment, and the focus of document review is as follows:

1. Check the number of documents required by the L/C (e.g., more or less, whether it is a full set, etc.);

2. Check the special requirements for documents in additional clauses (e.g., whether the L/C number, contract number, etc., must be indicated);

3. Check whether the names and types of the submitted documents meet requirements (e.g., whether certification is needed, whether the issuer meets requirements, etc.);

4. Check whether all descriptions among the documents are completely consistent (e.g., capitalization, unit of measurement, etc.);

5. Check whether the date of document issuance or submission meets requirements (e.g., insurance policy date, FORMA issuance date, etc.).

Common issues in document issuance include:

1. Misunderstanding of the L/C clause on quantity tolerance, leading to errors in the amount or quantity of documents.

Generally speaking, if the L/C explicitly stipulates the tolerance for amount and quantity, documents should be issued according to requirements; if the L/C does not specify clearly, a 5% tolerance is allowed. It should be noted that, according to UCP500, if the unit of measurement is “piece”, “unit”, etc., this provision is not applicable.

2. Incorrect name or address of the drawee on the draft.

Here, attention should be paid to the difference between the Paying Bank and the Reimbursing Bank.

3. Inconsistent beneficiary name, address, etc., on the invoice compared to the L/C description.

4. Inconsistent currency names among the draft, invoice, insurance policy, etc., or non-compliance with L/C requirements.

5. Inconsistent goods description on the invoice compared to the L/C description.

6. Types of documents requiring certification or verification, issuer, etc., do not meet L/C requirements.

7. Inconsistencies among documents in goods name, quantity, unit of measurement, mark description, gross/net weight, etc.

8. Original documents not marked as “original” or insufficient number of copies submitted.

9. Missing signatures or seals on Bill of Lading or insurance policy, or endorsement not as required.

10. Errors in port of discharge or place of destination on the Bill of Lading, or existence of unsatisfactory remarks.