I previously wrote about What to do when an Original Bill of lading is lost..
One of the questions that came up after that was, if a shipper is submitting a bank guarantee, how long is the guarantee valid because he cant afford to keep money held up for this..
Generally all that the bank needs to know before they cancel the guarantee, is that the cargo is being released to the rightful owner/consignee of the cargo..
The general process to be followed by the shipper (or the entity that put up the bank guarantee) is :
1) Get confirmation from the consignee of the bill of lading in writing on their letter head that
- That they have received the cargo covered under the bill of lading in full
- That they have paid the shipper of the cargo all their monies
- They are relinquishing any further claim on the cargo in full or part
2) Upon receipt of this confirmation, the bank that issued this guarantee will have to
- Verify that the letter is indeed authentic and has been issued by the actual consignee/receiver of the cargo
- The bank will have to verify this properly as different types of bills of lading will have different consignees (Direct, To Order (of Shipper), To Order of Bank etc)..
- Where the bill of lading is consigned To Order (of Shipper) or To order of Bank, the actual receiver/buyer of the cargo will have to be verified basis the contract or purchase order exchanged between the Seller and Buyer..
Needless to say, each bank will have their own working policies, but this would be the general route to follow..
In essence, once both buyer and seller have confirmed that the deal has been concluded and they have received the cargo and money respectively, the bank guarantee can be cancelled by the bank..