Shipping & Freight

The ICC International Maritime Bureau (IMB) estimates from its work in verifying Bills of Lading that over 95% of all improperly issued Bills of Lading are issued by – yeah you guessed it – Non-Vessel Operating Common Carriers (NVOCCs)..

The IMB identified that there is a prevalence of issuance of incorrect NVOCC bills of lading by the NVOCC which is then presented to banks and other stakeholders in the trading and finance chain, with the aim of defrauding the trade finance system, possibly for the purposes of multiple financing, money laundering, etc..

The IMB has developed a business solution to mitigate the effects of this problem..

The IMB has established a register for Non Vessel Operating Common Carriers (the Register) who agree to abide by the IMB Code of Conduct for the proper issuance of NVOCC Bills of Lading..

The purpose of the Register is to improve anti-fraud standards and provide a mechanism to recognise participating NVOCCs who adhere to a minimum standard of anti-fraud measures in their operations..

Banks who are members of the IMB can now check whether the NVOCC named on the bill of lading presented to them has signed up to the IMB Code of Conduct..

This provides some sort of assurance to the banks and customers that the NVOCC bills of lading issued by these NVOCCs meet acceptable standards.. There are of course consequences for NVOCCs who fail to comply..

TT Club noted that in terms of banking scrutiny, The International Chamber of Commerce’s Commercial Crime Services division has a primary function of protecting the integrity of international trade by seeking out fraud and malpractice and providing reports based on this activity to its members..

Commercial banks conduct thousands of investigations each year in relation to fraudulent bills of lading and these investigations are undertaken by the IMB..

As part of the investigation process, IMB conducts due diligence on all trade documents, including bills of lading, and seeks independent third-party verification to provide an extra level of confidence in transactions..

Safeguard against shipping and freight fraudThis supports banks in relation to their compliance procedures to prevent fraud, money laundering and sanctions breaches, especially since banks are not obligated or have no resources to verify if the goods have been shipped on board..

Suspect bills of lading are those which have false content including the wrong ship, dates, description of cargoes, container numbers or parties..

Perpetrators present such bills of lading to banks to facilitate fraudulent activity including money laundering, fraud, illegal capital flight and to by-pass sanctions..

Shipping and Freight Resource fully supports this initiative of the IMB which sets out the standards for the issuance of NVOCC bills of lading, and also the fact that there will now be a register where NVOCCs can be tracked..