Purpose of Letter of credit (“LC”) is to give payment security to the beneficiary The applicable rules of UCP A generic checklist is given below to assist parties involved in the transaction in . Certificate of Origin. An LC is a contract by which a bank agrees to pay the beneficiary upon the Credits (“UCP”) are international rules published . such as insurance documents and certificates. the LC. 2. Bills of lading are not clean – meaning they bear. As an exporter, how accurate are the letter of credit documents that Practice for Documentary Credits (UCP ), transport documents, A Certificate of Origin is a signed declaration stating the country of origin of the goods.

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The checklist designed for importers is to be used by purchasing staff when applying to local banks for letters of credit. We strongly recommend you provide your customers with copies of these guides to back-up your own discussions with them.

This checklist is intended primarily for use in export sales and shipping departments. It will also be of assistance to those involved in financial and credit management and in chedklist and supply.

To ensure a letter of credit is workable, trouble-free and provides security of payment, it is essential to take simple yet effective precautions at the start. Working through the checkpoints set out in the various sections of the guide will help reduce discrepancies and associated unplanned costs. Successive surveys by SITPRO and others have shown that well in excess of fifty percent of documents presented by exporters to banks for payment under letters of credit are rejected on first presentation.


This can cause expensive delays for both the exporter and the importer and may even result in a lesser payment or no payment at all. A great many of those rejections could be avoided if more care was taken to ensure that the documents called for in the credit are properly completed.

Letters of Credit – Checklist and Guide for Exporters

Any letter of credit requirements which are still not clear should be referred to your bank for clarification without delay. Having assured yourself on these points, proceed with the key checks. Bear in mind, as mentioned, credot over half of credit documents are rejected on first presentation to the banks. The main reason for this oritin matters that could have been put right, had the credit been checked early enough, were not put right.

Making these key checks on the day the credit arrives, consulting other departments accordingly and carrying out the more detailed checks immediately afterwards, ketter enable difficulties to be spotted in better time to take action. At an early stage, it will be in your best interests to send a copy of the credit to your forwarder or whoever will obtain the transport documents.

Letters of Credit – Checklist and Guide for Export Sales Executives

Similarly with your insurers if insurance is to be covered by you. Telephone instructions alone may easily result chscklist misspellings or other errors and consequent rejection by the bank, or even a wrong type of transport or insurance document may be provided.

When checking your credit under the headings below, remember that UCP will apply fully unless you have agreed different terms, which are reflected in the credit.

One or more of the following checkpoints may thus be overridden by conditions stipulated in your particular eltter.


If you are still unclear as to what the wording of the credit implies check what UCP has to say on the point and with the UK bank. It is recommended that the details of the credit be recorded at this point so that a progress check can be updated right through to presentation of the final documents to the bank for payment. Under UCPwhether a credit is available by sight payment, deferred payment, acceptance or negotiation, a credit can be available with any bank.

Unless you can correct discrepancies in time you will lose your right to payment under the credit and all the cost and effort to obtain security will have been wasted.

If the transport document involved is a full set of negotiable bills of lading, these measures normally retain your control over the goods as the buyer cannot take delivery without the documents, which are still in your control.

However, in other circumstances, the buyer can obtain the goods without the presentation of documents. Nevertheless, the buyer is in effect being asked whether, after all, they still want the goods and is prepared to crfdit the discrepancies in the documents.

Letters of Credit – Checklist and Guide for Export Sales Executives – Sit Pro

They are quite free to refuse. UCP contains the rules for the use of letters of credit. Where there are any inconsistencies with this guide, UCP will ldtter.