TT Talk - Attempts by shippers to use bills of lading for fraudulent purposes

  • Date: 19/11/2007
  • Source: TT Talk 103

A shipper purchases goods in country A with the intention of exporting them to country B. Due to import restrictions in country B on goods from country A, the shipper wants to declare that the origin of the goods is not country A, but instead country C. He is looking to find a carrier who would falsely name a port in country C as ‘Port of loading’. Based on this false information, the shipper would then obtain a certificate of origin with Country C named as ‘Country of origin’.

Another shipper requests the carriage of goods from country A to country B, with the shipper’s subsidiary in country C named as ‘Shipper’. Country B grants tax concessions to imports from country A. The shipper, attempting to take advantage of these tax concessions, requests the carrier to produce for the same consignment an extra bill of lading which names the shipper’s subsidiary in country A as ‘Shipper’. This extra bill of lading is not being used in the commercial dealing between the parties; its sole purpose is to enable the shipper to obtain a certificate of origin based on which country B grants him the tax concessions.

In both these cases the shipper requires the carrier to include false information in the bills of lading which then enables the shipper to use the bill of lading for fraudulent purposes. The

shipper might tell the carrier that other carriers have been willing to comply with such requests, implying that the carrier will lose out on business if he fails to collaborate. You will be aware that giving in to such requests could make the carrier party to the shipper’s fraudulent conduct in which case the carrier risks heavy fines, blacklisting and criminal proceedings. A letter of indemnity by the shipper in the carrier’s favour might well be unenforceable due to its underlying purpose and will be of no use to the carrier in the criminal proceedings. The Club (in common with most liability insurers) will not cover any claims, fines or defence costs you suffer owing to your intentional or reckless conduct

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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