TT Talk - Attempted fraud with electronic carriage documents

  • Date: 05/07/2007
  • Source: TT Text 100

A remarkable aspect in MSC v Trafigura Beheer (discussed in item 2, just above) was, in the words of Aikens J, the ‘international conspiracy’ to steal the 18 containers.

Aikens J said that the fraudulent set of bills of lading and the change to the ship’s cargo manifest did not raise any suspicions because the bills of lading and the manifest were produced electronically. This comment raises the question whether electronically produced carriage documentation is more susceptible to fraud than traditional paper documents. The fraudsters’ sting was a daring attempt that required careful planning and involved operations both in South Africa and China.

The Club asks Terminal Operator and Transport Operator Members to be aware that criminals might attempt to commit sophisticated frauds with falsified documents and to take all practical steps possible to avert such frauds.

As Aikens J stated in his judgment at first instance of 26 April 2007, the shipper’s agent provided the information for the ‘shipper’, ‘consignee’ and ‘notify party’ boxes for the production of the genuine bill of lading. The bill was generated in a ‘template’ bill of lading displayed on a computer screen. An authorised employee of the carrier signed the genuine bill of lading as agent for the ship’s master, next the bill (in a set of three originals) was released to the shipper. When this genuine bill of lading was produced, the carrier also entered details of the cargo, shipper, consignee and notify party on a computerised version of the vessel’s cargo manifest.

At that point the fraudsters started interfering. They used employees of the carrier’s agents in Durban to produce a fraudulent second set of bills of lading, where a Shanghai company was falsely named as the consignee. The vessel’s cargo manifest was also altered in order to tally with the information in this fraudulent bill of lading. The false bills of lading were then sent to the fraudsters in Shanghai, who succeeded in obtaining a deliver order for the containers from the carrier’s local agent. Based on this delivery order the fraudsters paid customs duty and VAT on the cargo and thereby obtained permission by the customs authorities to discharge the 18 containers from the container terminal. However, before the fraudsters had an occasion to take the containers away, the true consignees applied for delivery orders, which lead to investigations that uncovered the attempted fraud. Had the true consignee requested delivery orders a day or two later, the fraudsters’ sting to obtain the cargo worth some US$2 million might have worked.

Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority. 

The UK VAT Identification number for Through Transport Mutual Insurance Association Limited is: GB 564 5244 35 and for TT Club Mutual Insurance Limited is: GB 564 3375 30. The Italian VAT Identification number for TT Club Mutual Ltd is: 03627210101.

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