When a bank refuses a documentary-credit presentation, the invoice for it rarely arrives in one place. The bank fee lands on a fee statement, the rework is hidden in the export team's week, and the late payment shows up as a slightly worse cash position nobody traces back to a packing list. This article puts the pieces into one model. The numbers are defaults, not facts about your business: the point is the structure, which you then fill with your own figures.
Four lines on the cost of one refusal
- Bank fee: the discrepancy fee your bank charges per refused presentation, plus courier or re-presentation charges where they apply.
- Internal rework: the hours spent reading the refusal notice, obtaining corrected documents, calling the bank and the buyer, and sending the set again.
- Delayed payment: the credit amount arrives later than it would have on a clean presentation. The money is late, not lost, but late money has a cost of capital.
- Deadline risk: if the correction cannot be made before the credit expires, payment depends on the buyer agreeing to waive the discrepancies.
The arithmetic, with the default numbers
On DocAccord's editable model the defaults are: a bank fee of EUR 75 per refused presentation, 3 internal hours at a fully loaded EUR 45 per hour, an average credit value of EUR 150,000, a payment delay of 7 days per correction cycle, and a cost of capital of 8% per year. Each of those is an assumption you are expected to overwrite.
- 1Bank fee: EUR 75.
- 2Rework: 3 hours x EUR 45 = EUR 135.
- 3Delayed payment: EUR 150,000 x 8% x 7 / 365 = EUR 230.14.
- 4Total for one refused presentation: 75 + 135 + 230.14 = EUR 440.14.
The delay line is simple interest on the credit amount for the days it arrives late, with no compounding, so it is easy to check with a calculator. Use the rate your treasury actually uses: the interest on the credit line the late payment keeps drawn, or your company's cost of capital. Seven days is a default, not a rule; the examination period alone allows each bank in the chain up to five banking days per presentation, and a corrected set is examined again.
A nominated bank acting on its nomination, a confirming bank, if any, and the issuing bank shall each have a maximum of five banking days following the day of presentation to determine if a presentation is complying.
Several discrepancies, one refusal
A refusal notice can list several discrepancies, and the model treats that the way it plays out: one refusal is one bank fee and one delay, however many discrepancies the notice lists, while the rework grows with each discrepancy that has to be fixed. With three discrepancies on the defaults: 75 + (3 x 135) + 230.14 = EUR 710.14 for that one presentation.
From one refusal to a year
The calculator on the DocAccord homepage starts from 4 presentations a month with 50% of them refused: 2 refused presentations x EUR 440.14 = EUR 880.27 a month, or EUR 10,563 a year. The 50% is the model's starting value, not a measurement. For comparison, ICC Academy estimates that 65-75% of documentary-credit presentations are refused on first presentation (ICC Academy, "11 Questions that will help you master documentary credits", updated 8 August 2024). Many of those refusals are resolved, but each still costs rework, fees and delay. Your own rate, taken from your own refusal notices, beats either number.
The line the model leaves out
Deadline risk has no default figure, because there is no honest one. A refusal that arrives with days left in the presentation period costs the three lines above. A refusal that arrives after the credit has expired, or after the period for presentation has run out, cannot be cured by correcting the documents. Payment then depends on the issuing bank asking the applicant for a waiver, and on the applicant agreeing. A buyer who wants the goods will usually agree; the point is that the decision has moved to them.
When an issuing bank determines that a presentation does not comply, it may in its sole judgement approach the applicant for a waiver of the discrepancies. This does not, however, extend the period mentioned in sub-article 14(b).
One refused presentation costs a bank fee, internal hours and the interest on money that arrives late: EUR 440.14 on the default assumptions, before any deadline risk. Multiply by your own refusals per year to see the line your finance team is already paying.
Rerun the arithmetic with your own figures in the calculator at docaccord.com/#cost-calculator: the bank fee from your fee statements, the hours from the people who do the rework, the rate from treasury. All figures here are model assumptions, not market data, and this article is not legal or financial advice.
This article sets out the rules as we understand them and is not legal advice. What governs is the wording of the specific credit, the applicable ICC rules as in force, and the determination of the examining bank or customs authority in the individual case.