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Documentation of a Garment
Export house

Submitted to:
Prof. I Chakrapani



Submitted by:
Chahat Jain (06)
Nikita Jain (23)
Jayveer Deo (18)
Karishma Manghnani (20)
Parul Nagpal (24)
Shraavya Sukumar (32)
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Export Documentation
Once the goods are ready the exporter has to prepare and execute various documents
of different tags of sending the shipment of goods to the importer
The various documents are vital to the exporter and bank which is a media of payment
The documentary requirements are both regulatory and operational in nature and have
to comply with the rules and regulation with the Indian government as well as the
importing countries for different type of products.
These requirement are different for different type of products
Accuracy and completeness are the prime necessities in documents covering export
shipments
Importance of Export document
As an evidence of shipment and title of goods
For obtaining payments
Transportation of the goods
Custom clearance of the goods
And many other purposes
Export document cost
Export documentation work constitutes a heavy charge in exports activity
Its costly, complex and cumbersome
Minor discrepancies of any kind either in the date itself or any typing error in the
document which looks harmless might proves costly
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Export document
Any alteration or addition made by an authority issuing the documents should be
endorsed properly, with the signature of the person issuing the document only
If the documents are not the correct ones and not filled properly the importers may not
be able to get the goods when the ship carrying them arrives
Legal importance
Before granting the permission, the custom officer however ensures that the goods
being exported are in accordance with the different regulation particularly in terms of
following:
The goods are same type, sort and values as declared by the exporter
The duty or cess livable has been properly determined and paid
Aligned documentation system
The Government of India made it mandatory for every exporter to use standardized
preshipment export documents w.e.f. September 1,1991
This is properly known as aligned documentation system
The preshipment document on a standard layout was first introduced by Sweden in
1956
Paper size and specifications
All documents under the system are to be prepared on A4 size of paper
Standard margin 10mm---top 20mm----left
The size of the individual boxes should be as per the specification
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Maximum tolerance is 1 mm
Specifications
The captions inside the boxes should be printed in 6 points sans serif face and should be
located as near on the top left corner of the boxes as possible
Documents need to generated mechanically
Paper should be found in stable form 50-60% relative humidity
Documentation practice in India
In India, on an average about 25 documents are associated with the pre-shipment
stages to export transaction
These documents are classified in to two categories:
commercial
regulatory


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Export Documents: An export trade transaction distinguishes itself from a domestic
trade transaction in more than one way. One of the most significant variations between the
two arises on account of the much more intensive documentation work. The documents
mentioned in the pre & post shipment procedure are discussed below:
1. Invoice: An invoice or bill is a commercial document issued by a seller to the buyer,
indicating the products, quantities, and agreed prices for products or services the seller has
provided the buyer. An invoice indicates the buyer must pay the seller, according to the
payment terms. The buyer has a maximum amount of days to pay these goods and are
sometimes offered a discount if paid before.



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In the rental industry, an invoice must include a specific reference to the duration of the time
being billed, so rather than quantity, price and discount the invoicing amount is based on
quantity, price, discount and duration. Generally speaking each line of a rental invoice will refer
to the actual hours, days, weeks, months, etc being billed.
From the point of view of a seller, an invoice is a sales invoice. From the point of view of a
buyer, an invoice is a purchase invoice. The document indicates the buyer and seller, but the
term invoice indicates money is owed or owing. In English, the context of the term invoice is
usually used to clarify its meaning, such as "We sent them an invoice" (they owe us money) or
"We received an invoice from them" (we owe them money).
Invoices are of 4 types:
a. Proforma Invoice: The starting point of the export contract is in a form of a offer made by
an exporter to the foreign customer. The offer made by an exporter is in the form of a Proforma
invoice. It is a quotation given as a reply to an enquiry. The importance of a Proforma invoice is
that it forms the basis of all trade transaction and it may be useful for an importer to obtain the
import license or foreign exchange
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b. Commercial invoice: A commercial invoice is a document used in foreign trade. It is used as a
customs declaration provided by the person or corporation that is exporting an item across
international borders. Although there is no standard format, the document must include a few
specific pieces of information such as the parties involved in the shipping transaction, the goods
being transported, the country of manufacture, and the Harmonized System codes for those
goods.
A commercial invoice must also include a statement certifying that the invoice is true, and a
signature. A commercial invoice is used to calculate tariffs, international commercial terms (like
the Cost in a CIF) and is commonly used for customs purposes. Normally, the invoice is
prepared first, & several other documents are then prepared by deriving information from the
invoice

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c. Consular invoice: It is certification by a consul or Government official covering an
international shipment of goods. It ensures that exporters trade papers are in order & the
goods being shipped do not violate any law or trade restrictions.

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d. Customs invoice: It is an invoice made on specified format for the Custom officials to
determine the value etc. as prescribed by the authorities of the importing country.

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2. Packing list: A shipping list, packing list, waybill, packing slip (also known as a bill of parcel,
unpacking note, packaging slip, (delivery) docket, delivery list, manifest or customer receipt, is a
shipping document that accompanies delivery packages, usually inside an attached shipping
pouch or inside the package itself.

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It commonly includes an itemized detail of the package contents and does not include customer
pricing. It serves to inform all parties, including transport agencies, government authorities, and
customers, about the contents of the package. It helps them deal with the package accordingly.
It shows the details of goods contained in each parcel / shipment. Considerably more detailed
and informative than a standard domestic packing list, it itemizes the material in each individual
package and indicates the type of package, such as a box, crate, drum or carton. Both
commercial stationers and freight forwarders carry packing list forms.
3. Certificate of Inspection: Pre-shipment inspection, also called pre shipment inspection or
PSI, is an important and reliable quality Control method for checking goods' quality while clients
buy from the suppliers.
After ordering a number of articles, the buyer lets a third party control the ordered goods
before they are dispatched to him. Normally an independent inspection company is assigned
with the task of the PSI, as it is in the interest of the buyer that somebody not connected with
the deal in any way verifies the amount and quality. This way the buyer makes sure, he gets the
goods he paid for.
Although increasing numbers of clients would like to collect suppliers' information from the
Internet, this contains high risks because it is not a face-to-face transaction, and Internet
phishing and fraud can corrupt it. Pre-shipment inspection can greatly avoid this risk and ensure
clients get quality products from suppliers.
The pre-shipment inspection is normally agreed between a buyer, a supplier, and a bank, and it
can be used to initiate payment for a letter of credit. A PSI can be performed at different stages:
Checking the total amount of goods and packing
Controlling the quality and/or consistency of goods
Verifying compliance with the standards of the destination country (e.g. ASME or CE mark)
The transport company often performs the first stage, but for the latter two stages a proper
inspection company is needed. Similarly, if between the buyer and seller money transfer via a
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letter of credit is agreed upon, it is necessary to assign a reputable inspection company. In case
of the letter of credit, after inspection of the goods, an inspection certificate is sent to the bank
issuing the letter of credit and the buyer, initiating the money transfer. Inspection companies
are classified in two classes.
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Free-market companies: These are privately owned companies, which sell their services to the
market. Danger with these might be, especially if it is a smaller company that they might be
paid as well by the manufacturer thus working in his interest.
State owned inspection companies: Only very few companies operating on the market are
state-owned or partly state-owned. The shareholding of governmental institutions guarantees
the independence and objectivity.
A higher form of the PSI is called expediting; in this the dates of delivery and the production are
controlled as well.
Some countries, like Botswana require PSIs for all goods entering the country in order to fight
corruption. In these cases the company designated by the country must perform the PSI.
4. Certificate of Origin: - A Certificate of Origin (often abbreviated to CO or COO) is a document
used in international trade. It traditionally states from what country the shipped goods
originate, but "originate" in a CO does not mean the country the goods are shipped from, but
the country where the goods are actually made. This raises a definition problem in cases where
less than 100% of the raw materials and processes and added value are not all from one
country. An often used practice is that if more than 50% of the cost of producing the goods
originate from one country, that country is acceptable as the country of origin (then the
"national content" is more than 50%). In various international agreements, other percentages
of national content are acceptable. This document has a dedicated equivalent for the
(international) trade in the economic service of electricity called Guarantee of origin.
When countries unite in trading agreements, they may allow Certificate of Origin to state the
trading bloc as origin, rather than the specific country.
The document may be issued by the exporter or be confirmed by another party in the exporting
country, such as a notary, a chamber of commerce, or a local consulate of the destination
country. In many cases specific government-issued documents are required, such as for
shipments under the North American Free Trade Agreement, or for preferential customs
treatment in importing countries for shipments of processed/manufactured goods from less
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developed countries to developed ones (often referred to as the green CO form "A", or GSP
(Generalized System of Preferences) Form A CO).

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The CO is primarily important for classifying the goods in the customs regulations of the
importing country, thus defining how much duty shall be paid. But it may also be important for
import quota purposes and for statistical purposes, and especially for food shipments, it may
also be important for health regulations.
Before concluding a transaction, the exporter and importer should always clarify whether a CO
is required, and if so, agree on exactly the form and content of the CO.
A preferential certificate of origin is a document attesting that goods in a particular shipment
are of a certain origin under the definitions of a particular bilateral or multilateral free trade
agreement (FTA). A countrys customs authority in deciding whether the imports should benefit
from preferential treatment in accordance with special trading areas or customs unions such as
the European Union or the North American Free Trade Agreement (NAFTA) or before anti-
dumping taxes are enforced requires this certificate.
The definition of "Country of Origin" and "Preferential Origin" are different. The European
Union for example generally determines the (non-preferential) origin country by the location of
which the last major manufacturing stage took place in the products production (in legal terms:
"last substantial transformation").
Whether a product has preferential origin depends on the rules of any particular FTA being
applied, these rules can be value based or tariff shift based. The FTA rules are commonly called
"Origin Protocols".
The Origin Protocols of any given FTA will determine a rule for each manufactured product,
based on its HTS (Harmonized Tariff Schedule) code. Each and every rule will provide several
options to calculate whether the product has preferential origin or not. Each rule is also
accompanied by an exclusion rule that defines in which cases the product cannot obtain
preferential status at all.
A typical value based rule might read: raw materials, imported from countries that are not
members of this FTA, used in production do not make up for more than 25% of the Ex- Works
value of the finished product.
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A typical tariff shift rule might read: none of the raw materials, imported from countries that
are not members of this FTA, used in production may have the same HTS code as the finished
product.
The certificate of origin must be signed by the exporter, and, for a small number of countries,
also validated by a Chamber of Commerce or local consulate of the destination country and
notarized.
Chambers of Commerce offer certificate of origin services, but another person, such as a notary
public, still only legalizes their letterhead certificate. Companies may consult the WCN Chamber
of Commerce Directory to find their nearest chamber who may offer this service.
Certificate of origin is required when: -
The goods produced in a particular country are subject to preferential tariff rates in the
foreign market at the time importation.
The goods produced in a particular country are banned for import in the foreign market.
5. GSP: - The Generalized System of Preferences, or GSP, is a formal system of exemption from
the more general rules of the World Trade Organization (WTO), (formerly, the General
Agreement on Tariffs and Trade or GATT). Specifically, it's a system of exemption from the most
favored nation principle (MFN) that obliges WTO member countries to treat the imports of all
other WTO member countries no worse than they treat the imports of their "most favored"
trading partner. In essence, MFN requires WTO member countries to treat imports coming
from all other WTO member countries equally, that is, by imposing equal tariffs on them, etc.
GSP exempts WTO member countries from MFN for the purpose of lowering tariffs for the least
developed countries (without also doing so for rich countries). The idea of tariff preferences for
developing countries was the subject of considerable discussion within UNCTAD in the 1960s.
Among other concerns, developing countries claimed that MFN was creating a disincentive for
richer countries to reduce and eliminate tariffs and other trade restrictions with enough speed
to benefit developing countries.
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In 1971, the GATT followed the lead of UNCTAD and enacted two waivers to the MFN which
permitted tariff preferences to be granted to developing country goods. Both these waivers
were limited in time to ten years. In 1979, the GATT established a permanent exemption to the
MFN obligation by way of the enabling clause. This exemption allowed contracting parties to
the GATT (the equivalent of today's WTO members) to establish systems of trade preferences
for other countries, with the caveat that these systems had to be "generalized,
nondiscriminatory and nonreciprocal' with respect to the countries they benefited (so-called
"beneficiary" countries) Countries were not supposed to set up GSP programs that benefited
just a few of their "friends.'
From the perspective of developing countries as a group, GSP programs have been a mixed
success. On one hand, most rich countries have complied with the obligation to generalize their
programs by offering benefits to a large swath of beneficiaries, generally including nearly every
non-OECD member state. Certainly, every GSP program imposes some restrictions. The United
States, for instance, has excluded countries from GSP coverage for reasons such as being
communist (Vietnam), being placed on the U.S. State Department's list of countries that
support terrorism (Libya), and failing to respect U.S. intellectual property laws.
But more significant is that most GSP programs are not completely generalized with respect to
products. That is, they don't cover products of greatest export interest to low- income
developing countries lacking natural resources. And this is by design. In the United States and
many other rich countries, domestic producers of "simple" manufactures, such as textiles,
leather goods, ceramics, glass and steel, have long claimed that they could not compete with
large quantities of imports. Thus, such products have been categorically excluded from GSP
coverage under the U.S. and many other GSP programs. Unfortunately, these excluded
products are precisely the kinds of manufactures that most developing countries are able to
export. (Most developing countries cannot efficiently produce things like locomotives or
telecommunications satellites, but they can make shirts.)
Even in the face of its limitations, it would not be accurate to conclude that GSP has failed to
benefit developing countries. Rather, it is the case that GSP has benefited some developing
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countries a lot and others very little. Specifically, for most of its history, GSP has benefited
"richer developing" countries - in early years Mexico, Taiwan, Hong Kong, Singapore, and
Malaysia, more recently Brazil and India - while providing virtually no assistance to the world's
least developed countries, such as Haiti, Nepal, and most countries in sub-Saharan Africa. The
U.S., however, has closed some of these gaps through supplemental preference programs like
the African Growth and Opportunity Act and a newer program for Haiti, and Europe has done
the same with Everything But Arms.
More generally, since the early 1990s a historic change affecting developing countries has
occurred within the WTO. Namely, WTO rules have been extended to cover both textiles and
agricultural products. For nearly all of the WTO's (and GATT's) existence, which started in 1948,
textiles and agricultural products were excluded from WTO/GATT coverage because they were
so sensitive to GATT's primary promoters, the United States and Europe. But now that situation
has changed. Under new WTO rules, many textiles tariffs and quotas already have been
eliminated, and liberalization of trade policy also is occurring on the complex agricultural front.
Given that textiles and agricultural products - especially processed agricultural products, such
as flour as opposed to wheat - are the main products that many of the world's least developed
countries are able to export competitively and lucratively, these and similar changes at the
WTO may someday mean that the limitations of GSP programs will be resolved - outside of the
rubric of GSP itself. It certifies that the goods being exported have originated/ been
manufactured in a particular country. It is mainly useful for taking advantage of preferential
duty concession, if available. It is applicable in countries forming European Union.
6. IEC Certificate: It is an Import-Export Code Certificate issued by DGFT, Ministry of Commerce,
Government of India. It is a 10 digit code number. No exports or imports will be affected
without the IEC code. It is mandatory for every exporter.
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7. Wearing Apparel Sheet: It is like a checklist, which gives the detail regarding the content &
design of the garment packed.

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8. Bill Of Lading: A bill of lading (BL - sometimes referred to as BOL or B/L) is a document issued
by a carrier to a shipper, acknowledging that non-specified goods have been received on board
as cargo for conveyance to a named place for delivery to the consignee who is usually
identified. A through bill of lading involves the use of at least two different modes of transport
from road, rail, air, and sea. The term derives from the verb "to lade" which means to load a
cargo onto a ship or other form of transportation.
A bill of lading can be used as a traded object. The standard short form bill of lading is evidence
of the contract of carriage of goods and it serves a number of purposes:
It is evidence that a valid contract of carriage, or a chartering contract, exists, and it may
incorporate the full terms of the contract between the consignor and the carrier by reference
(i.e. the short form simply refers to the main contract as an existing document, whereas the
long form of a bill of lading (connaissement integral) issued by the carrier sets out all the terms
of the contract of carriage;
It is a receipt signed by the carrier confirming whether goods matching the contract
description have been received in good condition (a bill will be described as clean if the goods
have been received on board in apparent good condition and stowed ready for transport); and
It is also a document of transfer, being freely transferable but not a negotiable instrument in
the legal sense, i.e. it governs all the legal aspects of physical carriage, and, like a cheque or
other negotiable instrument, it may be endorsed affecting ownership of the goods actually
being carried. This matches everyday experience in that the contract a person might make with
a commercial carrier like FedEx for mostly airway parcels, is separate from any contract for the
sale of the goods to be carried; however, it binds the carrier to its terms, irrespectively of who
the actual holder of the B/L, and owner of the goods, may be at a specific moment.
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The BL must contain the following information:
Name of the shipping company;
Flag of nationality;
Shipper's name;
Order and notify party;
Description of goods;
Gross/net/tare weight; and
Freight rate/measurements and weight of goods/total freight
While an airway bill (AWB) must have the name and address of the consignee, a BL may be
consigned to the order of the shipper. Where the word order appears in the consignee box, the
shipper may endorse it in blank or to a named transferee. A BL endorsed in blank is transferable
by delivery. Once the goods arrive at the destination they will be released to the bearer or the
endorsee of the original bill of lading. The carrier's duty is to deliver goods to the first person
who presents any one of the original BL. The carrier need not require all originals to be
submitted before delivery. It is therefore essential that the exporter retains control over the full
set of the originals until payment is effected or a bill of exchange is accepted or some other
assurance for payment has been made to him. In general, the importer's name is not shown as
consignee. The bill of lading has also provision for incorporating notify party. This is the person
whom the shipping company will notify on arrival of the goods at destination. The BL also
contains other details such as the name of the carrying vessel and its flag of nationality, the
marks and numbers on the packages in which the goods are packed, a brief description of the
goods, the number of packages, their weight and measurement, whether freight costs have
been paid or whether payment of freight is due on arrival at the destination. The particulars of
the container in which goods are stuffed are also mentioned in case of containerized cargo. The
document is dated and signed by the carrier or its agent. The date of the BL is deemed to be the
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date of shipment. If the date on which the goods are loaded on board is different from the date
of the bill of lading then the actual date of loading on board will be evidenced by a notation the
BL. In certain cases a carrier may issue a separate on board certificate to the shipper.
9. Airway Bill: The Air Waybill (AWB) is the most important document issued by a carrier either
directly or through its authorized agent. It is a non-negotiable transport document. It covers
transport of cargo from airport to airport. By accepting a shipment an IATA cargo agent is acting
on behalf of the carrier whose air waybill is issued. AWBs have eleven digit numbers, which can
be used to make bookings, check the status of delivery, and current position of the shipment.
The number consists of:
1. The first three digits are the airline prefix. Each airline has been assigned a 3-digit number by
IATA, so from the prefix we know which airline has issued the document.
2. The next seven digits are the running number/s - one number for each consignment
3. The last digit is what is called the check digit. It is arrived at in the following manner.
The seven digit running numbers are divided by 7, by using a long division calculation. The
remainder becomes the check digit. That is why no AWB number ends with a figure greater
than 6. Air waybills are issued in sets of different colours. The first three copies are classified as
originals. The first original, blue in color, is the shippers copy. The issuing carrier retains the
second, colored blue. The third, colored orange, is the consignees copy. A yellow copy acts as
the delivery receipt, or proof of delivery*. The other copies are all white.
There are several purposes that an air waybill serves, but its main functions are:
*Contract of Carriage
Behind every original of the AWB are conditions of contract for carriage
*Evidence of Receipt of Goods
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When the shipper delivers goods to be forwarded, he will get a receipt. The receipt is proof that
the shipment was handed over in good order and condition and also that the shipping
instructions, as contained in the Shipper's Letter of Instructions, are acceptable. After
completion, an original copy of the air waybill is given to the shipper as evidence of the
acceptance of goods and as proof of contract of carriage
*Freight Bill
The air waybill may be used as a bill or invoice together with supporting documents since it may
indicate charges to be paid by the consignee, charges due to the agent or the carrier. An
original copy of the air waybill is used for the carrier's accounting
*Certificate of Insurance
The air waybill may also serve as evidence if the carrier is in a position to insure the shipment
and is requested to do so by the shipper
*Customs Declaration
Although customs authorities require various documents like a commercial invoice, packing list,
etc. the air waybill too is proof of the freight amount billed for the goods carried and may be
needed to be presented for customs clearance The format of the air waybill has been designed
by IATA and these can be used for both domestic as well as international transportation. These
are available in two forms, viz. the airline logo equipped air waybill and the neutral air waybill.
Usually, airline air waybills are distributed to IATA cargo agents by IATA airlines.
The air waybills show:
Carriers name
Head office address
Logo
Pre printed eleven digit air waybill number
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It is also possible to complete an air waybill through a computerized system. Agents all over the
world are now using their own in-house computer systems to issue airlines' and freight
forwarders' own air waybills. IATA cargo agents usually hold air waybills of several carriers.
However, it gradually became difficult to accommodate these pre- numbered air waybills with
the printed identification in the computer system. Therefore a neutral air waybill was created.
Both types of air waybills have the same format and layout. However, the neutral air waybill
does not bear any pre-printed individual name, head office address, logo and serial number.
10. Mate's Receipt: Mate's receipt is a receipt issued by the Commanding Officer of the ship
when the cargo is loaded on the ship. The mate's receipt is a prima facie evidence that goods
are loaded in the vessel. The mate's receipt is first handed over to the Port Trust Authorities.
After making payment of all port dues, the exporter or his agent collects the mate's receipt
from the Port Trust Authorities. The mate's receipt is freely transferable. It must be handed
over to the shipping company in order to get the bill of lading. Bill of lading is prepared on the
basis of the mate's receipt.
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11. Shipping Bill: Shipping bill is the main customs document, required by the customs
authorities for granting permission for the shipment of goods. The cargo is moved inside the
dock area only after the shipping bill is duly stamped, i.e. certified by the customs.
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Shipping bill is normally prepared in five copies:
Customs copy
Drawback copy
Export promotion copy
Port trust copy.
Exporter's copy

12. Letter of Credit: This method of payment has become the most popular form in recent
times; it is more secured as company to other methods of payment (other than advance
payment).
A letter of credit can be defined as an undertaking by importers bank stating that payment
will be made to the exporter if the required documents are presented to the bank within the
variety of the L/C.
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