ALERT THE TRAP: MANY SETS OF B/L

    Recently, I come into a "high intelligence trap" designed by middleman, and after several discussions with the freight forwarding company finally resolved that safely. What happened was this:

    Middleman purchased a number of stainless steel from A factory, sold to Africa company, and middlemen the a import and export corporation booking space with B freight company, and the goods transport from Shanghai to Hong Kong, them transfer to Africa. In the first-way, the ship company issue B/L with A factory as consignor and Hong Kong agent of B as consignee. n the second-way, the Hong Kong agent of B issue B/L with middlemen as consignor and Africa company as consignee. Under normal circumstances, the freight forwarding recover first-way B/L, then transfer the goods and issue second-way B/L. but the middlemen mentioned that the bill of lading in the bank transfer for a long time, and fear second-way transit is delayed, so ask the B issue first-way HOUSE B/L for bank transfer, and the agent of B take the B/L of ship company delivery and transfer the goods.

    At first glance, this request of middlemen is reasonable, in order to speed up cargo movement, in first-way, issue a total bill and single bill. But think carefully, there is a problem: because when agent of B delivery and transfer the goods by B/L of ship owner, and issue the second-way B/L to middlemen, and there are two B/L for one set of goods in middlemen hand, one is the first-way B/L with A factory as consignor and B Forwarder as consignee, and other is the second-way B/L with agent of b as consignor and Africa company as consignee. If think it in crime,a factory is the legitimate process of first-way B/L, and he can request the goods for B freight forwarding. And the African companies have paid for the goods, and also have the right to request the goods for B freight forwarding. One set of goods with two B/L, the B forwarding has been in danger state.

    Commentary

    First, the risk of two a set of goods with two B/L

    Modern trade, some middleman, considering cash flow, often wish to go abroad to foreign exchange through bill of lading, and then pay the domestic factories, but the domestic factories ensure to receivables facility, they want to control B/L too. Then the middleman take the reason of "In order not to delay the two-way flow of goods",require the the carrier issue two B/L, one for factory, and other for foreign exchange. In such a situation, the carrier will meet the risk, because if the middleman is not paid the money to domestic factories, production will require the carrier to return the cost with the B/L. But this time foreign consignee have delivered the good by B/L, then the carrier would face the risk of claims of domestic factories.

    After I take consultations with B forwarding, the middleman issue letter of guarantee, the B forwarding must recovery first-way B/L, then issue the second B/L to middleman, this would resolve the issue of property risk.

    Second, the another risk of the shipper. identification

    Brokers through an import and export company booking space to B freight forwarding company, so the import and export company can order B. And A is the consignor for B, so a can order B too. But the broker is the consignor in second-way, so broker also can order B. Then as a freight carrier B, who B should obey the instructions from, can avoid the risk of claim? In fact, resolution is simple, the party "real property ownership by", have the most power to make arrangements for the goods and issue instructions. In the first-way from Shanghai to Hong Kong, the A factory have the real property ownership and can order B. In second-way from Hong Kong to Africa the broker have the real property ownership and can order B by the payment. And the the import and export company can order B without real property ownership instructions (such as the refusal of waste, transport and other major changes required). In case of change of command in particular time, the forwarding requires the real property ownership furnish a guarantee (Note: At this point the only import and export company guarantee is not enough).

    We can see from the above case, now in more and more diverse forms of trade, a number of so-called "empty master" is using the total, single,  first-way, second-way interleaved complex relationship to realize their dream of getting rich. As an important transport link - freight forwarding companies, if they relax their efforts, they will fall into the trap, and they must vigilance and timely communicate with the legal profession to avoid major mistakes. How to identify trap, protect their transport company has become an important issue today.

    (Author: Zhang Xinhua lawyers, Shanghai Kai Rong law firm)