A good, productive day in the office can soon be spoiled by one phone call from the bank advising that your latest Letter of Credit presentation contains discrepancies. If you are unable to rectify, your business could be exposed to delays, interest costs, high bank charges and ultimately the risk of non-payment.

Here is a list of common discrepancies and how to avoid them:

1. Late presentation of documents. Always check the credit upon receipt (field 48 of the SWIFT MT700 advice) for the period of presentation. According to UCP 600 (Article 14c), unless otherwise specified the accepted period is not later than 21 days after shipment, however the applicant may specify a reduced period, such as 10 or 14 days. Do ensure that this period provides you with sufficient time, particularly if you need to present third party or certified / legalised documents.

2. Goods description on invoice differs to the L/C. Article 18c of UCP 600 states that the goods description appearing on an invoice must correspond with that appearing in the credit. Ensure that you quote the description exactly as contained in the SWIFT MT700 advice (field 45a) and that you do not list any items that may be construed as not being covered by the credit.

3. Capacity of signatory on transport document is missing / incomplete / incorrect.This is an issue arising from the failure of the carrier or freight forwarder to sign a Bill of Lading, Air Waybill or other transport document in accordance with the provisions of the relevant article under UCP 600 (Articles 19 – 25). A transport document must always indicate the name of the carrier (or master) and be signed by the carrier (or master) or a named agent on behalf of the carrier (or master). It is therefore vital that your freight agent is aware that the related documents are linked to a Letter of Credit and that they are skilled and trained in preparing such documents.

4. Copy documents presented. Unless otherwise allowed in a credit, at least one original of each specified document must be presented. Often, when multiples of a document are presented and are identical (eg: invoice in triplicate) a bank document checker may be unable to determine if an original is included. If in doubt, simply stamp or mark at least one of the items as ‘original’.

5. Draft not presented / not drawn correctly. Letters of Credit often require a draft (bill of exchange) to be presented. A draft will be drawn on one of the banks at sight or tenor (30 days, 60 days from….. etc). Check the requirements under field 42c of the SWIFT MT700 advice.

To assist you, we have produced a guide to completing a Bill of Exchange / Draft. This can be downloaded for free from the Resources and Links page of our website:

Guide to Completing a Bill of Exchange / Draft

Please note that the above list of discrepancies is by no means exhaustive and is intended to be a brief initial guide.

Click here to learn more about:

– Letters of Credit Training Courses

– Incoterms 2010 Training Courses


Alternatively, please contact us on 0800 043 4052 or by email: info@mjhayward.co.uk