Endorsement

Endorsement in foreign trade specifically refers to signing or stamping on the back of a negotiable instrument (such as a bill of exchange, promissory note, or check) or a document of title like a bill of lading, in order to transfer rights or grant certain rights to another party. It is commonly seen in the transfer of drafts under letters of credit and in the instruction delivery of bills of lading. Endorsement is divided into special endorsement (endorsement in full) and blank endorsement: a special endorsement requires naming the endorsee, while a blank endorsement only requires a signature, and the latter can be transferred by mere delivery, which carries higher risk. Points to note: endorsement must be continuous and authentic, otherwise the negotiability of the instrument is affected; endorsement of a bill of lading must comply with letter of credit requirements, otherwise the bank may refuse payment. Easily confused with 'endorsement' is 'confirmation', which is a bank's undertaking to pay under a letter of credit, whereas endorsement is an act of transferring rights. In addition, endorsement does not change the liability on the instrument itself, and the endorser bears the risk of being recourse. Foreign trade practitioners should strictly review the form of endorsement to ensure compliance with international practice and contractual terms.