Guide to a 100% letter of credit conform Air Waybill

[The below is guest blog post, kindly provided by Arnas Bräutigam. The post he above represents the personal views of Arnas Bräutigam. Arnas’ bio is below the post.]

By Arnas Bräutigam

Using a letter of credit (L/C) as payment / financing instrument is a good idea, if the seller and the buyer do not yet have a trust relationship strong enough to bridge the economic and legal distances between countries. With an L/C, the bank of the buyer states that it will pay the amount due to the seller on presentation of a set of specified documents. When the goods will be transported by airplane, the L/C will call for an 'air waybill' or short 'AWB'.

In order to actually receive the money under the L/C, strict adherence to the terms of the L/C is necessary. Otherwise, the bank that issued the letter of credit might refuse the payment due to discrepancies. Therefore, in the following you will find a very comprehensive guide of what to pay attention to when checking your air waybill regarding L/C conformity.
General remarks regarding the air waybill

The air waybill is a document that has multiple functions. First of all, it is a proof that the air transportation contract has been concluded and that the goods have been taken over by the carrier. The air waybill additionally also contains instructions for the transport, e.g. instructions regarding

§  The treatment of the goods (e.g. refrigeration of perishable goods, dangerous goods, fragile goods etc.),

§  The routing (airport of loading and airport of discharge) of the goods and

§  The delivery of the goods.


The air waybill is usually issued in three originals. The first original is for the carrier (to be signed by the sender). The second original travels with the goods and is meant for the recipient of the goods. The third original is for the sender (to be signed by the carrier). This last original serves as proof for the conclusion of the transportation contract and taking over of the goods.


The carrier has to be identified

The carrier has to be identified on the air waybill by his official name, e.g. by a document header or document field. The document needs to be signed – on all three originals – by one of the following parties:


§  The carrier, or

§  An agent of the carrier that is identified as such


Day and place of the issue have to be noted

An air waybill has to be dated and contain the place of issuance. If these details are not in the document, it will be treated as a discrepancy by the bank.


Any subsequent change to the air waybill has to be authenticated.

Subsequent changes to the document – including handwritten changes – have to be authenticated by the same party that originally signed the entire document.


If the exporter’s signature is called for in the L/C

If the conditions of the L/C require the air waybill to be signed by the sender, this signature has to be made on the
 original #3 for the sender as this document will be presented under the L/C.


The air waybill states that the goods have been taken over by the carrier

The L/C conform air waybill has to specifically state that the goods have actually been taken over by the carrier. It is not sufficient that the goods have been designated for taking over.


The air waybill has to contain the conditions of carriage

If the air waybill document does not contain the forwarding conditions itself, it is acceptable if there is a reference to the conditions of carriage in a separate document to fulfil this requirement.


„House air waybill“

A “house air waybill” is acceptable provided the freight forwarder signs the document “as carrier” or as agent for a (named) carrier.

The L/C might explicitly allow a „house air waybill“. In this case, the freight forwarder may sign the document without indicating the capacity in which it has been signed or the name of the carrier.


Correct address

The air waybill has to be addressed to the recipient as stated in the letter of credit

The recipient usually is the applicant of the L/C (i.e. the importer). The name has to be spelled exactly as in the L/C.


The Notify-Address has to conform to the address of the applicant of the L/C (the buyer) according to the L/C

The Notify-Address (and other contact numbers, if applicable) have to conform to the data about the L/C applicant as stated in the L/C. In any case, if not explicitly required by the L/C to be filled out, this field can be left empty.


An air waybill cannot be issued „to order“

An air waybill cannot be issued „to order“ or „to order of“ – in contrast to an ocean bill of lading for example.



The airport of departure and the airport of destination have to comply with the conditions stated in the L/C


The airport of departure and the airport of destination have to be the ones stated in the L/C.

Even if the L/C terms only state a geographical region for the airport of departure or the airport of destination, the actual airport of departure or the airport of destination still have to be stated explicitly in the AWB.

Even if the L/C states a country for the airport of departure or the airport of destination, it is not mandatory to also state the country in the air waybill. It is acceptable to only use the official IATA code of the airport in the air waybill, even if the name of the airport is written in full in the L/C.

Content and trade terms

Description of goods, markings, weights and number of pieces, measures and kind of units etc. may not contradict any other L/C documents

Especially the specification of the description of goods, the number of pieces, the number of goods, weights etc. will often also be printed in the commercial invoice and other documents like packing list, weight list). It is important that these numbers
 do not contradict each other, but form a consistent picture. So if the weight is stated to be „2,180.00 kg“ in the air waybill, the respective number stated in the weight list or commercial invoice may not differ from this amount. The description of goods however may be written in general terms in the air waybill and does not have to exactly match the description of the goods in field 45A of the L/C.


The freight payment remark has to comply with the conditions of the L/C

The statement „freight prepaid“ or „freight collect“ / „freight payable at destination“ has to be consistent with the terms of the L/C. The freight costs – if stated – should also be consistent with the freight costs stated in the commercial invoice.


The air waybill may show transhipments even if the L/C terms do not allow them.

Even if field 43T of the L/C does not allow transhipment, the air waybill may indicate transhipment, provided that the entire carriage is covered by one and the same air transport document.


If the L/C does not allow partial shipments, there may only be presented one air waybill

Consequently, more than one air waybill may only be presented if partial shipments are allowed according to field 43P of the L/C. There is one exception to this rule: if the
 entire goods are transported with the same airplane on the same flight, multiple air waybills may be issued and would be acceptable under the L/C. A transport with different airplanes and/or on different flights is not acceptable.


The air waybill may not state any defects of the goods or packaging

The air waybill may not state any defects of the goods or packaging, however it does not explicitly have to contain the word „clean“. Neither would it be a discrepancy if the word „clean“ first appears on the air waybill, but is then struck out.

If the air waybill indicates reservations, that the goods or the packaging may not be suitable for air transport, this would not be considered a discrepancy. However, any reservations that the goods or the packaging is not suitable for air transport, this would be a discrepancy.


Connection to the delivery contract or L/C

If the number of the L/C or number of the delivery contract are to be included in all documents as per the terms of the letter of credit, then these numbers should also be stated on the air waybill.


Presentation of documents

The original #3 (for the sender) of the air waybill has to be presented

The air waybill is usually issued as three originals, however the first and second original will not be handed over to the exporter. Therefore, even if the L/C should require „full set“, it is sufficient to present the original for the sender.


The date of shipment is considered to be the date of issue of the air waybill or – if present – any additional remark stating the actual date of the flight

If the flight has taken place on a different date than the issue date of the air waybill, an additional remark about that date is added to the air waybill. The L/C might require to explicitly state the actual date of dispatch („AIR WAYBILL SHOWING ACTUAL DATE OF DISPATCH“). In this case an additional remark about this date is required, even if the flight was on the date of issuing the air waybill. The date of issue of the air waybill alone is not enough. A remark in the field „for carrier’s use only“ is also not sufficient. Neither is any remark regarding a „requested flight date“.

The date of shipment must not be later than the latest shipment date according to the L/C. The L/C documents have to be presented to the bank within 21 days after the date of shipment and in any case before the expiry date of the L/C. The L/C may however extend or shorten that 21 day period.



Bio: Having always been fascinated by foreign languages and cultures, Arnas Bräutigam started his career in Export Finance. For Landesbank Berlin he structured ECA-covered transactions to CIS countries. After 7 years in the international department he decided to shift his professional focus onto the Berlin tech startup scene. As a side project, Arnas started writing about L/Cs in his blog - Alles über Akkreditive. The site meanwhile not only features a lot of relevant articles, but also short quizes and explainer videos. It is targeted not at trade finance professionals, but at exporters wishing to learn about trade finance instruments.

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Viewer's Recent Comments

  • António Neves on 2017-03-24 11:38am
    An excellent article. It is always gratifying when you meet someone who does know the tools of the, in this case. Congratulations Arnas and thank you very much. António Neves
  • Variyambath Bhaskaran on 2017-07-19 12:21am
    Very useful guidance.

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LCViews - Guide to a 100% letter of credit conform Air Waybill