12 Common LC Discrepancies and How to Catch Them Before the Bank Does
Most refused LC presentations fail on small, avoidable details. Here are the 12 discrepancies banks raise most often, what each costs you, and a check to catch them first.
An LC discrepancy is any point where your documents don't comply with the letter of credit, UCP 600 or each other. The most common ones are late shipment or presentation, an invoice description that doesn't correspond to field 45A, amounts or quantities outside tolerance, inconsistent data across documents, and a missing or wrongly issued document from field 46A. Nearly all of them are preventable with one check before you present.
A discrepant presentation doesn't automatically mean you won't be paid. But it does mean the bank is no longer obliged to pay. Your money now depends on the buyer agreeing to waive the discrepancies, usually after a fee and a delay, and sometimes after a price renegotiation you didn't plan for.
What happens when documents are discrepant
Under UCP 600, the bank has up to five banking days after presentation to examine the documents. If it finds discrepancies, it must send a single notice of refusal listing all of them. From there, three things usually happen:
- The bank contacts the buyer (the applicant) to ask whether they'll accept the discrepancies.
- The buyer accepts, often after inspecting the goods or the documents, and the bank pays less a discrepancy fee.
- Or the buyer refuses, and the documents become a collection. Payment now relies on the buyer's goodwill, not the bank's undertaking.
The fee is usually a flat charge per discrepant presentation, set by the issuing bank and typically deducted from your proceeds. The bigger cost is time: weeks of delay while goods sit at the destination port.
The 12 discrepancies banks raise most often
1. Late shipment (field 44C)
The on-board date on the bill of lading falls after the latest shipment date in LC field 44C. No document fix is possible. If production slips, ask the buyer for an amendment before the date passes.
2. Late presentation (field 48)
Documents reach the bank after the presentation period, which is 21 calendar days after shipment if field 48 is silent. Courier time and slow certificates of origin are the usual culprits.
3. Credit expired (field 31D)
Even inside the presentation period, documents presented after the expiry date, or at the wrong place of expiry, are discrepant. Whichever of 48 or 31D comes first is your real deadline.
4. Goods description doesn't correspond to 45A
The commercial invoice must describe the goods in a way that corresponds with field 45A. Adding a different grade, dropping a model number, or abbreviating the wording can all be raised. Copy 45A exactly onto the invoice, then add your own detail underneath.
5. Invoice amount exceeds the credit
The invoice total is above the LC amount in field 32B, or above the tolerance in 39A. There's no automatic 10% leeway: it applies only where the credit says "about" or "approximately".
6. Quantity or unit price outside tolerance
A 5% quantity tolerance applies only to bulk goods not counted in units, and never lets you exceed the credit amount. Counted goods (cartons, pieces) get no tolerance unless the credit allows it.
7. Data conflicts between documents
Gross weight on the packing list differs from the bill of lading, or the number of packages differs between invoice and packing list. UCP 600 doesn't need documents to be identical, but data must not conflict. This is the discrepancy that keeping the invoice and packing list in sync prevents.
8. Wrong ports or route (44E / 44F)
The bill of lading shows a different port of loading or discharge than the credit names, or shows transhipment the credit doesn't allow in 43T.
9. Bill of lading not clean or not on board
A clause noting damaged packaging makes the transport document unclean. A received-for-shipment B/L without a dated on-board notation doesn't prove shipment.
10. Missing document or wrong issuer (46A / 47A)
A certificate of origin issued by the exporter when the credit asks for a chamber of commerce, or an inspection certificate that simply isn't there. Field 47A conditions, such as quoting the LC number on every document, sit in the same category.
11. Insurance document problems
Cover below 110% of the CIF or CIP value, a policy dated after shipment, the wrong currency, or a cover note instead of a certificate or policy. See marine insurance certificate vs policy.
12. Bill of exchange drawn incorrectly
Wrong drawee, a tenor that doesn't match field 42C, an amount that differs from the invoice, or a missing signature or endorsement. Our guide to drawing a bill of exchange under an LC walks through each field.
A pre-presentation check that catches most of them
- Dates: on-board date vs 44C; presentation date vs 48 and 31D; insurance date no later than shipment.
- Amounts: invoice total vs 32B and 39A; draft amount equals invoice amount.
- Description: invoice goods description copied from 45A.
- Data consistency: packages, weights, marks and consignee identical across invoice, packing list, B/L and certificate of origin.
- Documents: every 46A item present, in the right number of originals, from the right issuer.
- Conditions: every 47A clause ticked off one by one.
Run the check against the credit, not against your usual template. The letter of credit documents checklist gives you the full list to work from.
Frequently Asked Questions
What is a discrepancy in a letter of credit?
A discrepancy is any way a presented document fails to comply with the terms of the credit, the applicable rules (usually UCP 600) or the other documents in the set. A discrepant presentation releases the bank from its obligation to pay.
How much is an LC discrepancy fee?
It varies by issuing bank. It's usually a flat fee per discrepant presentation, deducted from the exporter's proceeds, plus any extra correspondent charges. Check field 71D and the bank's tariff.
Can a discrepant LC still be paid?
Yes. The bank can ask the buyer to waive the discrepancies. If the buyer accepts, payment goes ahead, usually less a fee. If they refuse, the bank holds or returns the documents and payment depends on the buyer.
How long does a bank take to check LC documents?
Under UCP 600 Article 14, a maximum of five banking days after the day of presentation.
Bilexor generates your commercial invoice and packing list from one shipment record, so packages, weights and descriptions can't drift apart between documents, which removes the most common discrepancy before the bank sees it. Get early access. Informational only, not banking advice; confirm LC-specific requirements with your bank.
Informational only — not legal, banking, tax, or customs advice. Always verify document and LC requirements with your bank, CHA / customs broker, and buyer before presentation.