Professional Documents
Culture Documents
Preventing Discrepancies
Preventing Discrepancies
1. Fax the buyer the terms of the letter of credit, which should
conform to the underlying contract of sale between the exporter and
importer.
5. The exporter should discuss the INCO terms in the L/C with its
freight forwarder to insure that the proper shipping documents can
be provided with the shipment along with the required signatures if
necessary.
Common discrepancies
1. The draft refers to the letter of credit; specifying issuing bank and
its L/C reference number, and is phrased according to the L/C terms.
5. The tenor of the draft (at sight or some days after sight or bill of
lading date) conforms to the terms of the L/C.
Invoice
3. Purchase order numbers agree with the L/C if they are listed.
4. The invoice must list the prices and unit prices and various
charges/expenses if required by the L/C.
10. The invoice must show all the clauses, certifications, and/or visa
requirements following the exact the terms of the L/C.
Insurance Documents
4. Under UCP Article 34.f. the insurance must cover the CIF or CIP
value plus 10 percent, if the value can be determined. (This article
should be read in detail to understand its implications.)
Transport Documents
The following articles in the UCP deal with transport documents. This
area is one where discrepancies commonly occur. The exporter
should carefully review these sections in consultation with its freight
forwarder to insure that transport document discrepancies do not
occur.
The exporter should make sure that its freight forwarder has a copy
of the L/C before the forwarder books the freight and obtains the
B/L. This should help eliminate obvious discrepancies concerning
markings on the B/L, ports of loading and discharge, shipping terms
and description of goods.
Since we can not go into great detail on any one subject, only a few
items on Marine Bills have been listed below as examples that you
should be familiar with:
8. The B/L should be consigned exactly as per the L/C terms and
endorsed properly, if required.
9. The “notify party” is specified on B/L exactly as per the L/C terms.
10. The B/L should show the loading and discharge ports as
specified in the L/C.
Again, we have only provided you with some examples of areas that
can cause possible problems with export documents that may slow-
down or prohibit you being paid in accordance with the terms of an
L/C. If you are going to be involved in either import or export of
merchandise on a regular basis, you should buy a copy of the UCP
500 and review it thoroughly.
Discrepancy Reason Responsibility
Inconsistent data Different information Exporter
between the different
Documents.
Absence of documents Documents required by the Exporter
letter of credit are missing
Other Other documentation Exporter; any third party
reasons not specifically e.g. PSI company, carrier
noted
Late presentation Documents presented later Exporter
than 21 days after
shipment
or after the number of days
stipulated in the letter of
credit
Carrier not named and The name of the carrier on The transport provider
signing capacity the airway bill is missing
or
not signed on behalf of the
carrier
Incorrect data Information on the set of Exporter
documents is not in
conformity with the letter
of
credit
Letter of credit expired Documents presented after Exporter
the letter of credit has
expired
Incorrect goods description The goods description on Exporter
the documents differs from
that on the letter of credit
Incorrect or absence of The bills of lading, Exporter or insurance
endorsement insurance certificate or bill company
of exchange not endorsed
by the exporter or other
party
Late Shipment Goods shipped after the Exporter/carrier
last
date given for shipment