Understanding ‘Full Set Less One’ & Discrepancy Fee Claims After Reimbursement

Dear Mr. Old Man,

We would appreciate your comments on the following:

Question 1:

The letter of credit states in Field 46A:

“Full set less one original bill of lading.”

If the bill of lading indicates that it was issued in 3 originals (e.g., 3/3), would the presentation of 2 original bills of lading be considered compliant with the credit terms?

Question 2:

The LC was issued by Bank I and includes the following in Field 78:

“Negotiating bank is to send documents to Bank I and claim reimbursement from Bank R. Reimbursement will be made by Bank R after three banking days from the date of receipt of the reimbursement claim.”

Following these instructions, the negotiating bank (Bank N) forwarded the documents to Bank I and claimed reimbursement from Bank R. Bank R duly reimbursed Bank N without raising any discrepancy deduction.

However, a few days later, Bank I sent Bank N an MT 791 message, advising of discrepancies and requesting payment of a USD 50 discrepancy fee.

We find this confusing. If Bank I allowed the reimbursement to proceed, why is it now claiming a discrepancy fee?

Is Bank I correct in doing so?

Thank you and best regards,

BD

———-

Hi,

Question 1:

A full set of bills of lading usually consists of three originals, unless otherwise stated on the bill of lading itself. If the bill of lading shows “3/3”, then presenting 2 original bills of lading complies with the LC requirement of “full set less one original”.

Yes, this presentation would comply with the LC condition under Field 46A.

Question 2:

A negotiating bank should only claim reimbursement from the reimbursing bank when it determines that the documents appear to comply with the credit. If discrepancies are found, the negotiating bank must seek the issuing bank’s authorization before claiming reimbursement.

A reimbursing bank, on the other hand, is not concerned with document compliance; it acts only on the reimbursement instructions provided by the issuing bank.

In your case:

• Bank N presented documents to Bank I and claimed reimbursement from Bank R.

• Bank R reimbursed Bank N according to Bank I’s instructions — meaning Bank I must have authorized or pre-approved that reimbursement (explicitly or by default).

• Afterward, Bank I identified discrepancies and claimed a USD 50 discrepancy fee.

While it may seem inconsistent, it is not unusual under UCP practice: Bank I can still claim discrepancy fees even if reimbursement has already been effected.

So, is Bank I correct?

Yes — if valid discrepancies exist , Bank I is entitled to claim that fee even after reimbursement has occurred. They could have refused the documents entirely, which would have been a more serious issue.

It was fortunate that Bank I accepted the documents and only claimed the fee.

Best regards,

Mr. Old Man