FEMA - Export of Goods and Services-RBI Clarification
AUTHORIZED Dealers are allowed to accept Forwarder's Cargo Reovides that FCR may bceipts (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 pre accepted in lieu of bill of lading as a shipping document.
Now, RBI had 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.
AP (DIR Series) Circular No. 65/RBI., Dated: January 12, 2012