Export
Letters of Credit
A letter of credit pays against documents, not against cargo. The bank checks the presentation, and any discrepancy entitles it to refuse.
The sequence that gets you paid
UCP 600 governs most credits and sets out how banks examine documents. The rules favour precision over intent.
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Read the draft
Ask your buyer for the draft credit before the issuing bank releases it. Amending a draft costs an email. Amending an issued credit costs a bank fee and your buyer's cooperation.
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Check what you cannot do
Credits routinely demand a shipment date you cannot meet, a document no issuer provides, or an inspection certificate from a body that does not operate in your state. Find those before the goods move.
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Match the description word for word
The goods description on your invoice matches the credit exactly, including punctuation. Banks reject on a changed word, and they are entitled to.
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Build the document set
Bill of lading, commercial invoice, packing list, certificate of origin, insurance certificate and inspection certificate as the credit calls for them. Each one dated inside the window.
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Present inside the period
The credit sets a presentation period, and 21 days after the bill of lading date applies where it stays silent. Late presentation kills a clean set of documents.
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Handle the discrepancy notice
Banks issue a refusal within five banking days. We work the correction or arrange presentation on approval basis while the goods keep moving.
Discrepancies we see repeatedly
- Bill of lading dated one day outside the latest shipment date
- Invoice describing goods correctly and the credit describing them differently, and no one amends the credit
- Insurance certificate covering less than 110% of invoice value where the credit demands that figure
- Notify party named on the credit but absent from the bill of lading
- Partial shipment made where the credit prohibits it
Why we read the credit early
Around half of first presentations get refused somewhere in world trade. Correcting a document before shipment costs nothing. Correcting one after the vessel sails means courier time, bank fees and a buyer holding the advantage over a shipment already on the water.
Related
Next step
Tell us what you are moving.
Send the commodity, the weight and dimensions, the origin and destination, and your target sailing. That gives us enough for a firm quote.