Is Switch B/L Legal ?

[Kishan Barai]

My friend Ayush is importing sanitary products from China & send it directly to USA.

He apply the concept of switch B/L

My friend / CHA / FF / NVOCC / Experts every one told me that 'Switch B/L is legal'

But I don't feel it is as .......... COO is stating that goods are of Indian origin.

What is the view point of experts about Switch B/L ?

[Suryanarayana Sathineni]

Dear Friend,

Can you elaborate what is Switch B/L ?

Best Regards

Suryanarayana

[Kishan Barai]

Respected Suryanarayana Sir,

Let us assume that a person from INDIA receive purchase order from USA.

Now, INDIAN do not want to purchase goods from India, He planned to purchase goods from CHINA & Sell it to USA.

Now, if INDIAN tell to CHINA party that he is going to send goods to USA, there is full possibility that CHINA & USA will come together in future.

Now to avoid this INDIAN exporter import goods from china but does not file bill of entry for imports in India., he contacts shipping line for Switch B/L so now shipper & consignee is changed and now USA party becomes importer and INDIAN party becomes exporter (in new bill of lading). So CHINA party will feel that his importer is from INDIA, & USA party will feel that he is importing from INDIA. CHINA & USA will never come in contact with each other as INDIAN is middle man.

Such kind of transaction is widely used in INDIA & shipping line call it Switch B/L

[MUKUND THAKKAR]

please advise your freind to genrate the invoice in favour of USA party. while doing the BL switch transcation. with out genrating the Invoice. it is difficult to take FC in india. please also confrim that Invoice value is greater than china invoice please approch to chambers for getting COO. chamer will be issuing the same. Switch B/L is possible in your.

please infrom your supplier of chaina that shipping line BL will be switch at India. so according to your china supplier take necessary action. shipping line will be charge extra in india for this procedure.

[Kishan Barai]

Yeaaa, he does the same but does not inform "China" party, that he is going to switch, he only inform to shipping line for Swith B/L. Thank you MUKUND THAKKAR Sir.

[Malay pota]

Dear Friends

There is no question of legality about the Switch BL no doubt there are some insurance Company including TT club has raised question that why Switch BL is issued? but issuance of Switch BL is a practice and in my view i have not yet come to across about the illegality of Switch BL.However the insurance company has to take some extra caution is Switch BL is issued.

The fo;;owing is the concept of switch BL

A “Switch” bill of lading is the second set of bill of lading that may be issued by the carrier (or agent) in exchange for the first set of bill of lading originally issued when the shipment was effected.

Switch bills are required and requested generally when there has been a change in the original trading conditions some of them are as under:

• Goods could have been resold and the discharge port has now been changed to another port and this could have occurred as a high-seas sale..
• The seller (who could be an intending agent) does not wish the name of the actual exporter to be known to the consignee in case the consignee strikes a deal with the exporter directly..
• The seller does not want to know the buyer to know the actual country of origin of the cargo so he requests that the port of loading be shown as some port other than the one the cargo was loaded from..

Hope this will resolve the questions.

[Kishan Barai]

Thank you very much Malay Pota Sir.

AI Summary

Switch Bill of Lading: Legal Practice for Concealing Trade Identities Raises Insurance Concerns in International Shipping. A discussion on the legality of 'Switch Bill of Lading' (Switch B/L) involves an Indian party importing goods from China and shipping them directly to the USA, using Switch B/L to conceal the original exporter and importer identities. This practice prevents direct contact between the Chinese and American parties. Participants in the forum, including customs experts and freight forwarders, generally agree that Switch B/L is legal, though it may raise concerns with insurance companies. The process involves issuing a new bill of lading to reflect changes in trading conditions, such as the port of discharge or concealing the cargo's origin.