Trade documents poorly understood by many bankers, says global expert

TRADE documents, even the universal bill of lading, are not as well understood as they should be by bankers, says a specialist at UTC Overseas, a Houston company specialising multi-modal project cargo logistics.

"Understanding just what they mean is critical for those who prepare and handle trade documents because mistakes can be costly and time-consuming," UTC Overseas vice president Marco Poisler told a recent training seminar.

Speaking at a BAFT-IFSA (Bankers' Association for Finance and Trade - International Financial Services Association) seminar at Deutsche Bank's New York offices, Mr Poisler warned that trade documentation and related regulations have grown more complex today.

Looking at the bill of lading (B/L), Mr Poisler declared: "For banks involved in the financing of global trade transactions, each B/L presented raises the question: 'Is this fraud or shipping jargon?'

"In the earliest days of ocean trade, the owners of a shipment often rode along with their cargo and used trade contracts for shipping a single commodity," he said.

"Today's laws and regulations are obviously more complex, given the sheer breadth and technological growth of modern global trade. However, they still draw heavily on phrases and terms whose definitions have been internationally accepted through long-standing usage and case law stretching back over scores and even hundreds of years. Understanding just what they mean is critical for those who prepare and handle trade documents because mistakes can be costly and time-consuming," Mr Poisler said.

"Adding to the challenge, governments and professional trade groups, often working through international organisations like the United Nations, continue to expand and refine these definitions and standards," he said.

"But implementation and acceptance of these changes by individual nations can sometimes take years to complete. As a result, it is critical that when specific sets of terms are used in a trade document, they are acceptable and enforceable for all parties involved," he said.

Mr Poisler praised BAFT/ISFA and Deutsche Bank for organising holding such seminars. "International trade is a primary engine for positive growth around the world," he said.

UTC Overseas Inc operates a network of offices throughout North America, South America, Europe Asia, and Australia. It opened its own office in Shanghai in 2006, Canada in 2008, Eastern Europe and Australia in 2009, and most recently in Pittsburgh and Baku, Azerbaijan.