ISBP 745 Article C C3: Invoice Showing Shipment from a Different Port Than the Credit

Introduction

The port of shipment on the commercial invoice must match the port of shipment stated in the letter of credit. ISBP 745 Paragraph C3 establishes this requirement to ensure that the goods being invoiced were actually shipped from the location the credit specifies. A port mismatch on the invoice is a discrepancy that banks will flag during examination, even if the goods arrived at the correct destination. This guide explains how C3 works, why port mismatches occur, and how to prepare invoices with the correct port information.

Failure Modes

1. Different port name. The credit specifies "Shanghai" but the invoice shows "Ningbo." These are different ports, and the mismatch is a clear discrepancy.

2. Variant port name. The credit specifies "Hamburg" but the invoice shows "Elbe/Hamburg." The bank may not recognize "Elbe" as the same port as "Hamburg."

3. Port vs. country. The credit specifies "Port of Antwerp" but the invoice shows "Belgium." The invoice uses the country instead of the specific port.

4. Transhipment port shown instead of loading port. The invoice shows the transhipment port (e.g., "Singapore") instead of the original loading port (e.g., "Shanghai"). The bank expects the port of loading, not the transhipment port.

5. Port code instead of port name. The invoice uses the UN/LOCODE (e.g., "CNSHA") instead of the port name ("Shanghai"). The bank may not recognize the code.

Resolution Steps

1. Identify the port of loading and discharge from the credit. Determine the exact port names as stated in the credit. Note both the port of loading and the port of discharge.

2. Use the exact port name on the invoice. Write the port name exactly as it appears in the credit. Do not abbreviate, expand, or substitute a different port name.

3. Verify the port matches the bill of lading. The port of loading on the invoice must match the port of loading on the bill of lading. If they differ, correct the invoice before submission.

4. Do not show the transhipment port as the loading port. If the goods are transhipped via Singapore, the invoice should still show the original loading port (e.g., "Shanghai"), not the transhipment port.

5. Use the full port name, not a code. Write "Shanghai" instead of "CNSHA." Banks expect human-readable port names.

6. Confirm the port is a recognized port. Ensure the port name is a recognized international port. If the credit specifies a lesser-known port, confirm the port exists and is commonly used in trade finance.

7. Coordinate with the shipping department. Provide the shipping department with a copy of the credit's port requirements and instruct them to use those ports on the invoice and bill of lading.

8. Review the invoice before submission. Check the port names on the invoice against the credit one final time before presenting to the bank.

Conclusion

ISBP 745 C3 requires the port of shipment on the invoice to match the credit. This is a straightforward rule: use the exact port name from the credit on the invoice. Port mismatches are among the most common discrepancies, but they are entirely preventable through a simple pre-submission review.

FAQ

Q1: Can the invoice show a different port if the goods were actually shipped from that port?
No. The credit specifies a port, and the invoice must match that port. Even if the goods were shipped from a different port, the invoice must show the port stated in the credit. If the actual port differs, the credit must be amended.

Q2: What if the credit allows transhipment?
If the credit allows transhipment, the bill of lading may show the transhipment port. However, the invoice should still show the original port of loading as stated in the credit.

Q3: Can the bank waive a port mismatch discrepancy?
Yes, under UCP 600 Article 16(b), the applicant may waive any discrepancy, including a port mismatch. The bank is not obligated to seek a waiver.

Q4: Does this rule apply to air shipments?
Yes. For air shipments, the port of loading and discharge on the invoice must match the airports stated in the credit and on the air waybill.

Q5: What if the credit specifies a range of ports (e.g., "Shanghai or Ningbo")?
If the credit specifies multiple acceptable ports, the invoice may show any of those ports. The invoice must not show a port that is not listed in the credit.

Source Notes

Source 1: "The cost of a comma: Documentation errors are the 'hidden tax' on Bangladesh's exports" — The Daily Star (2022). Context only: analysis of documentation errors, including port name inconsistencies, in export documentation.

Source 2: "Delivered at place (DAP) Incoterms 2020 rule" — Trade Finance Global (2020). Context only: context on port and delivery location requirements in international trade.

Source 3: "Understanding Ocean Bills of Lading: Key Details and How They Work" — Investopedia (2023). Context only: overview of bill of lading requirements, including port of loading and discharge specifications.