Your first presentation under a letter of credit is the moment the exporter's paperwork meets a bank examiner who reads nothing but that paperwork. You cannot talk the examiner round afterwards, so the checking has to happen before the documents leave. Start with the credit itself, usually a SWIFT MT700 message: field 46A lists the documents required, 47A any additional conditions, 45A the goods description, 44C the latest shipment date, 31D the expiry date and 48 the period for presentation. Then work through the list below.
The documents a credit usually asks for
- Commercial invoice: issued by you, the beneficiary, to the buyer, the applicant. Almost every credit requires one.
- Transport document: most often a marine bill of lading; for other modes an air waybill or a road, rail or multimodal document. It evidences shipment and its date.
- Insurance document: where the seller insures the goods, for example under CIF or CIP terms.
- Packing list, certificate of origin, inspection or analysis certificate: common additions, each only if field 46A asks for it.
Field 46A decides, not habit. A document the credit does not ask for is disregarded by the bank (Art. 14(g)), so adding one cannot cure anything, and a required document that is missing is a discrepancy on its own.
Five checks for every presentation
- 1Dates. Shipment on or before the latest shipment date in field 44C. Presentation within the period in field 48, or 21 calendar days after shipment if field 48 is silent and an original transport document is required, and in every case no later than the expiry date in field 31D (Art. 14(c)).
- 2Goods description. The invoice description corresponds with field 45A of the credit (Art. 18(c)). Other documents may describe the goods in general terms, as long as they do not conflict (Art. 14(e)).
- 3Names and addresses. The invoice is issued by the beneficiary and made out in the name of the applicant (Art. 18(a)). Addresses elsewhere may differ from the credit but must be in the same country; the applicant's details in the consignee or notify field of a transport document must be as stated in the credit (Art. 14(j)).
- 4On board notation. A bill of lading shows that the goods were shipped on board a named vessel at the port of loading in the credit, either by pre-printed wording or by a dated on board notation (Art. 20(a)(ii)).
- 5Amounts and tolerances. Invoice currency is the credit currency (Art. 18(a)). The amount stays within the credit amount; "about" or "approximately" allows 10% either way on the figure it qualifies (Art. 30(a)), and other tolerances follow Art. 30(b) and (c).
The rules behind each check
A presentation including one or more original transport documents under articles 19, 20, 21, 22, 23, 24 or 25 must be made by or on behalf of the beneficiary not later than 21 calendar days after the date of shipment as described in these rules, but in any event not later than the expiry date of the credit.
The description of the goods, services or performance in a commercial invoice must correspond with that appearing in the credit.
A commercial invoice: must appear to have been issued by the beneficiary (except as provided in article 38); must be made out in the name of the applicant (except as provided in sub-article 38 (g)); must be made out in the same currency as the credit; and need not be signed.
When the addresses of the beneficiary and the applicant appear in any stipulated document, they need not be the same as those stated in the credit or in any other stipulated document, but must be within the same country as the respective addresses mentioned in the credit. Contact details (telefax, telephone, email and the like) stated as part of the beneficiary's and the applicant's address will be disregarded. However, when the address and contact details of the applicant appear as part of the consignee or notify party details on a transport document subject to articles 19, 20, 21, 22, 23, 24 or 25, they must be as stated in the credit.
A bill of lading, however named, must appear to ... indicate that the goods have been shipped on board a named vessel at the port of loading stated in the credit by: pre-printed wording, or an on board notation indicating the date on which the goods have been shipped on board.
The words "about" or "approximately" used in connection with the amount of the credit or the quantity or the unit price stated in the credit are to be construed as allowing a tolerance not to exceed 10% more or 10% less than the amount, the quantity or the unit price to which they refer.
One more rule sits behind all five checks: data in different documents need not be identical, but must not conflict (Art. 14(d)). ISBP 821 A23 adds that a misspelling or typing error that does not affect the meaning of a word or sentence does not make a document discrepant. A wrong number is a different matter: a model number, quantity or date that differs between documents is a conflict of data, not a typo.
Time matters as much as content on a first presentation. The bank has up to five banking days to examine (Art. 14(b)), and if it refuses, its notice lists every discrepancy at once. A presentation made early in the period leaves room to correct those points and present again before the deadline. One made on the last day does not.
Read the credit first, then check five things on every set: dates, goods description, names and addresses, the on board notation, and amounts. Present early enough that a refusal still leaves time to fix it.
This checklist summarises general practice under UCP 600 and ISBP 821. It is not legal advice, and the terms of your own credit always come first.
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.