Mr A and Mr B

I will feel amply rewarded if this letter prevents an honest importer being a victim of a shrewd mode of deceit. An importer, Mr A, received a so-called indent order from an unscrupulous merchant, Mr B, who had an accomplice in a foreign country. Mr B contacted Mr A to import on his behalf a certain commodity from a country where Mr B's accomplice resided. Mr B was willing to pay a substantial commission in advance on the condition that Mr B might use Mr A's bank credit.

Mr A opened a letter of credit to Mr B's accomplice in the foreign country, and he paid 30 percent of the total amount of, say, US$1 million, which was promptly paid by Mr B plus the importer's commission. Mr B's accomplice in the foreign country received the full amount of $1 million cash against the submittal of the original shipping documents, consisting of the usual invoice, packing list and Bill of Lading. The bank in the foreign country readily paid the $1 million as all the shipping documents appeared to be in order. Naturally when Mr A's banker in Jakarta received the said documents, he immediately delivered them to Mr A and at the same time deducted the $1 million from Mr A's bank account.

When Mr A demanded payment from Mr B for the 70 percent balance, Mr B balked and told Mr A that the cargo he received was nothing but junk. Naturally Mr A was upset because the quality of the goods was nothing to do with him, and the shipper of the goods was unknown to him. He could only advise Mr B to take legal action against the shipper abroad. Mr B, who was not only an unsavory character but an accomplished actor as well, pretended to be outraged by this turn of events, and at the same time cajoled Mr A into waiting for the payment, as he himself had already lost $300,000.

However, the real fight has to be fought between two honest parties, Mr A against his bank which opened the letter of credit. His bank could not be held responsible, because it paid against the submittal of the shipping documents and it goes without question that a bank has no way of checking the contents of a shipment. It was indeed a tragedy that in this instance, Mr A had to become the victim of a refined way of deceit. Meanwhile, B and his accomplice divided the loot on a fifty-fifty basis.

A. DJUANA

Jakarta