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In international trade, it's a term popularised by "joker brokers" usually on junk mail forums or fraudulent offers or similar.
These joker brokers, in their ignorance, imagine that random suspicious people clamber over tanks trying to poke little sticks into the fuel, in order to prove something or other.
In reality, a qualified independent and respected inspection agency such as S.G.S., carries out a series of complex analysis on the product with specialised equipment and facilities. The analysis is sent to the bank, who then compares the report to the criterias stipulated on the documentary letter of credit (LC).
If the report and other "Presentation Documents" are within the parameters on the LC, then it is collected upon successfully.
If the report is outside of the parameters on the LC, then collection is denied.
Of course it's far more complicated than this, but you get the idea.
Wiki User
∙ 12y ago
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