DOCUMENT CHECKING FEE

QUESTION

Good day, Mr. Old Man.

We have an LC opened in our favour that allows partial shipments. Every time we present a drawing the confirming bank will find a discrepancy or two even though our bank (the advising Bank) would have assured us there were no discrepancies.

The applicant ( buyer) always accepts the discrepancies (since sometimes the goods would have arrived at the port by then) and we would get paid even though with a lot of delays.

We have noticed that we are incurring cost for document examination without any benefits and have told our bank that we do not require their document examination services any longer. They (our bank) insist that document examination is mandatory under international LCs.

Could I have your opinion on this matter, please.

Thanks and best regards.

Steve
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ANSWER

Hi,

For export letters of credit, some exporter’s banks would charge document checking fee while some others including my bank would not, but banks would collect export bill handling charge, which would range from 0.125% – 0.150% of bill value.

If you do not want to pay for your bank’s document examination services, you may request them to forward the documents as received (without checking) to the confirming bank/issuing bank for payment.

Kind regards,

Mr. Old Man