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Letter of credit international shipments where buyer & consignee are different

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This query is : Resolved

CA KSB (Querist)
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04 October 2022 Dear Sirs/Madam,

Company A awards a work order to buyer, Company B.
Company B, the buyer requests Company A to issue letter of credit to his foreign manufacturer (to the extent buyer needs to pay manufacturer).

Idea here is to save banking charges and documentation work instead of Company A issues LC to Company B and then company B issues LC to manufacturer.

Now foreign manufacturer asks whether he can issue invoice and shipping documents in the name of company B and mentions Company A as consignee.

Foreign manufacturer's concern is that whether banks will process his bill under letter of credit or his bill for payment will be rejected? Because letter of credit is issued by Company A (who is the consignee in the invoice and shipping documents) but billing address is in the name of company B (who is the buyer).

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 October 2022 Invoice and shipping bill should be in the name of the person who issued LC.
Endorse in the work order to make direct payment to foreign supplier and directly receive supplies.

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