Intro  Letters of Credit sometimes contain additional conditions that blur the line between presentation by the beneficiary and document handling between banks. When such clauses are poorly drafted, the question inevitably arises: can an issuing bank turn an internal routing instruction into a discrepancy? The following Q&A addresses one such situation involving Fields 47A and 48. QUESTION Dear Sir, LC …

Intro Differences between the amount in words and the amount in figures are among the most common issues encountered in document examination under letters of credit. At first glance, such inconsistencies appear to be straightforward discrepancies. However, practice shows that the answer is not always the same, particularly when a bill of exchange (draft) is involved. While UCP 600 establishes …

INTRO In practice, bank guarantees are often treated as if they must be issued or advised through a local bank in the beneficiary’s country. This assumption frequently leads to confusion between legal possibility and market or tender requirements, especially when physical bank guarantees are involved. The following question raises a simple but important issue: Can a bank issue a physical …

Intro  Time calculations under Letters of Credit often look simple, yet the word “within” continues to cause confusion — especially when readers focus on the example given in ISBP 821 paragraph A14(b)(i) and wonder whether the permitted period should extend both before and after the shipment date.  The following Q&A addresses a very practical question: When an LC requires documents …

Intro From time to time, beneficiaries find themselves facing draft Letters of Credit containing conditions that appear unnecessary, impractical, or even deliberately risky. Are these merely poor drafting practices, or are they “discrepancy traps” waiting to happen?  In the following exchange, Mr. Old Man shares his views on how sellers should respond when confronted with such LCs — and why …

Intro In documentary credit practice, mismatches between Incoterms® rules and LC document requirements are a frequent source of confusion — and disputes. One such classic mismatch arises when a credit issued under EXW Incoterms nevertheless requires the presentation of an air waybill (AWB). Is this automatically wrong? Or merely risky?  A reader raised the issue bluntly — and rightly so. …

(This Q&A is excerpted from a discussion by the Trade Services Update editors (LCM_QUERY 2026-01) Intro In documentary credit practice, the loss of an original bill of lading after a complying presentation has been made often gives rise to confusion between payment obligations under a letter of credit and the practical arrangements required to obtain delivery of the goods. Parties …

Intro One of the core principles of a documentary credit is that payment depends solely on complying documents, not on disputes arising from the underlying commercial contract. From time to time, however, beneficiaries encounter LCs that attempt to dilute this principle by inserting clauses linking payment to buyer–seller disputes. The following Q&A addresses such a case and explains why these …

Intro Drafts (bills of exchange) are among the most misunderstood elements in documentary credit practice. Although UCP 600 and ISBP 821 provide guidance, inconsistent LC drafting and legacy habits continue to cause confusion—especially when drafts are mentioned in some fields of the LC but not listed as required documents. In the Q&A below, Mr. Old Man responds to a set …

  Intro In LC practice, refusals often arise not because a document is missing, but because banks read documentary requirements in isolation rather than in context. One recurring issue is whether supporting evidence attached to a required document must independently comply with a general condition such as “all documents must show contract number and date”. The following Q&A illustrates why …