RBI/2011-12/345
A. P. (DIR Series) Circular No.65
January 12, 2012
To
All Authorised Dealers in Foreign Exchange
Madam/Sir,
Foreign Exchange Management Act, 1999 –
Export of Goods and Services - Forwarder’s Cargo Receipt
Attention of Authorized Dealers is invited to
A.P. (DIR Series) Circular No. 27
dated March 2, 2001, in terms of which they may accept Forwarder’s Cargo
Receipts (FCR) issued by IATA approved agents, in lieu of bill of lading, for
negotiation / collection of shipping documents, in respect of export
transactions backed by letters of credit, only if the relative letter of credit
specifically provides for negotiation of this document in lieu of bill of lading
and also if the relative sale contract with the overseas buyer provides that FCR
may be accepted in lieu of bill of lading as a shipping document.
- It has now been decided that authorized dealers may accept Forwarder’s Cargo
Receipts (FCR) issued by IATA approved agents, in lieu of bill of lading, for
negotiation/collection of shipping documents, in respect of export transactions
backed by letters of credit, if the relative letter of credit specifically
provides for negotiation of this document in lieu of bill of lading even if the
relative sale contract with the overseas buyer does not provide for acceptance
of FCR as a shipping document, in lieu of bill of lading.
- Further, authorized dealers may, at their discretion, also accept FCR issued
by Shipping companies of repute/IATA approved agents (in lieu of bill of
lading), for purchase/discount/collection of shipping documents even in cases,
where export transactions are not backed by letters of credit, provided their
'relative sale contract' with overseas buyer provides for acceptance of FCR as a
shipping document in lieu of bill of lading. However, the acceptance of such FCR
for purchase/discount would purely be the credit decision of the bank concerned
who, among others, should satisfy itself about the bona fides of the transaction
and the track record of the overseas buyer and the Indian supplier since FCRs
are not negotiable documents. It would be advisable for the exporters to ensure
due diligence on the overseas buyer, in such cases.
- Authorized dealers may bring the contents of this circular to the notice of
their constituents and customers concerned.
- The directions contained in this circular have been issued under Section
10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of
1999) and are without prejudice to permissions/approvals, if any, required under
any other law.
Yours faithfully,
(Rashmi Fauzdar)
Chief General Manager