Functions of Ocean Bill of Lading in Uniform Customs and Practice for Documentation Credit (UCP 600)
One of the most controversial issues of international trade law is bill of ladings and their function in the ucp-600. Because the merchant is not able to pay the money of the transaction, he is required to impawn the bill of lading in the banks and demands credit in order to pay the money of the transaction. On the other hand, regarding that the parties to the contract are in different countries with different national laws, neither the buyer assures to pay the price before delivery, nor the seller is confident to deliver the goods to the buyer, so banks play a mediating role therefore after opening the credit and delivering the bill of lading, they will pay the money of transaction, then refers to the buyer. After the contract between the buyer and the seller has been concluded and the goods have been shipped from origin to destination, the seller delivers the goods to carrier and the carrier issues the bill of lading and then delivers it to the sender and then the sender will send it to the buyer and in the case that letter of credit is used, the sender will then send it to the advising bank then the issuing bank of the letter of credit and the advising bank will take the money and the issuing bank will deliver the bill of lading to the buyer to receive and clear the goods at the destination. Therefore, if the buyer fails to pay the money, then the issuing bank clears the goods by itself and then sells or transfers the goods by endorsement.