How to Avoid LC Discrepancies: The 15 Most Common Rejections

Every rejected LC presentation costs money, delays payment and chips away at the relationship with the applicant. The good news is that discrepancies cluster - the same 15 errors account for the overwhelming majority of rejections year after year. This guide walks through the top 15 in the order they appear in an ISBP 821 examination, with the fix for each.

The 15 most common LC discrepancies

1. Late presentation - documents presented after the 21-day post-shipment window (or the shorter window specified in the LC). Fix: build a presentation calendar from the on-board date the moment the B/L is issued.
2. Missing on-board notation - transport document does not evidence loading on board. Fix: request a dated on-board endorsement from the carrier before pickup.
3. Description of goods inconsistent - invoice uses different wording from the LC's Field 45A. Fix: copy-paste the exact Field 45A description into the invoice.
4. LC amount exceeded - invoice or drawing is larger than the LC value, without a 5 or 10 percent tolerance clause. Fix: split the shipment or amend the LC before presenting.
5. Expired LC - presentation date is after the expiry in Field 31D. No fix without applicant waiver.
6. Insurance amount insufficient - policy value is below 110 percent of CIF as required by UCP 600 Article 28. Fix: instruct the insurer to endorse the correct value at issuance.
7. Insurance dated after shipment - policy effective date is later than the on-board date. Fix: request back-dated cover to the shipment date.
8. Missing or wrong signatures - documents that must be signed (invoice, packing list, certificate of origin) are unsigned or signed by the wrong party. Fix: checklist every document against ISBP 821's signature rules.
9. Bill of lading not marked "clean" - carrier has annotated damage or shortage. Fix: negotiate a clean B/L with the carrier or refuse the shipment.
10. Math errors on the invoice - unit price times quantity does not equal the total. Fix: automate totals from the source system.
11. Weight or measurement mismatch - B/L, packing list and invoice show different weights. Fix: base all three documents on the same measurement source.
12. Certificate of origin not legalised - the LC requires legalisation by an embassy or chamber and the document is only chamber-attested. Fix: read Field 46A carefully at LC receipt; legalisation can take a week.
13. Missing beneficiary declarations - LC asks for a signed statement (e.g. "goods are of X origin") that is not presented. Fix: extract every required declaration from Field 46A into your document checklist.
14. Draft drawn on wrong party - bill of exchange drawn on the applicant when the LC requires drawing on the issuing bank. Fix: use the drawee named in Field 42a.
15. Late or missing telex advice - LC requires shipment advice by SWIFT within X days of shipment and proof is not presented. Fix: send the advice on the day of shipment and file the acknowledgement with your presentation.

The pre-presentation drill

Before couriering documents, run one final examination:

1. Compare goods description across every document.
2. Verify dates: shipment, on-board, insurance, invoice.
3. Check totals arithmetically on every priced document.
4. Confirm every required signature is present and correct.
5. Match required document count against Field 46A.

The LC Documents Checklist automates all five steps against the specific Field 46A wording of your LC and the general ISBP 821 rules. Its Draft Review tab also scans the MT700 for issuance-side traps that seed downstream discrepancies.