Presenting documents under Letters of Credit

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A common mistake by inexperienced exporters using Letters of Credit, is to present the documents required to the wrong branch of the bank, or even the wrong bank.

It must be remembered that the Letter of Credit is a direct contract between the Issuing Bank and the Beneficiary, regardless of any intermediary facilitating banks.  Therefore, regardless of a place of presentation and availability different from the Issuing Bank as stated on the Letter of Credit, the Beneficiary is at liberty to make a direct presentation to the Issuing Bank and the Issuing Bank is obliged to honour if the presentation is compliant.  This is detailed out in Article 6 d(ii) of UCP 600.

However, it is recommended that presentations direct to the Issuing Bank are only undertaken if

  • the Beneficiary is certain their documents are compliant
  • the payment is not via a Confirmed Letter of Credit
  • the Beneficiary does not wish to take advantage of the assistance of the Advising or Negotiating Bank with regards to submitting correct documentation.

Submission to the Issuing Bank can still be made under a Confirmed Letter of Credit, but by so doing the Beneficiary will still be liable for any charges relating to the Confirmation without any of the benefits.

All advising banks will send, along with the actual Credit, a letter stating where and when presentation of documents should occur.  It is very important that as much attention is paid to this Letter as the actual Credit itself, since it often contains very pertinent information about the the Credit as well as detailing out the exact address that the documents should be sent to.

Sending documents to the wrong address can cause unintentional delays in presentation (mainly because banking procedures today are not geared towards identifying incorrect presentations and returning them to the Beneficiary quickly) and even if the documents are compliant, there is always a possibility of late presentation, which is a discrepancy in its own right.

Usually beneficiaries will present documents to either the Advising, Negotiating, or if Confirmed, the Confirming bank, and these banks then check the documents, advise if any discrepancies need amending and will then send the documents to the Issuing Bank.

Occasionally it may not be possible to resolve the discrepancies, in which case the documents can either be sent in trust to the Issuing Bank, after the Beneficiary has obtained guarantees that the Applicant will accept discrepant documents, or documents are only released once an agreement has been reached.  The later case can mean a serious delay in the Applicant obtaining the documents, which they often need for their customs clearance procedures.  Any delay here could result in demurrage and/or storage being applied, something which should be avoided if at all possible, since the Applicant could, with some justification, pass on such charges back to the Beneficiary.

This is the eight article in the series of How to Get Paid using Letters of Credit.

Maria Narancic from Point to Point Export Services is an independent international trade adviser who assists organisations world wide with their international trade projects, documentation, Documentary Credits and import/export training. She is based in the United Kingdom. If you require any further assistance with the matters mentioned above, please do contact us by e-mail on or to access other articles on International Trade matters please do check out our website at

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