Examination of Documents
What Is Document Examination Under LC?
When a seller (beneficiary) presents documents to the bank under a Letter of Credit, the bank must examine them to ensure they strictly comply with the terms and conditions of the LC. This process is governed by the UCP 600 (Uniform Customs and Practice for Documentary Credits) issued by the ICC.
Key Documents Typically Examined
- Commercial Invoice
- Transport Document (e.g., Bill of Lading, Air Waybill)
- Packing List
- Certificate of Origin
- Insurance Document
- Inspection Certificate
- Any other document specified in the LC
Bank's Role
- Issuing Bank: Reviews documents to decide whether to honor or reject the payment.
- Confirming Bank (if any): Also examines documents before confirming payment.
- Negotiating Bank: May check documents before forwarding them to the issuing bank.
- Issuing Bank shall make the payment in the currency of the LC after settlement as per the terms and conditions of the LC.
Client should fill up the below mentioned form for settlement through copy or original documents along with all the documents called in the LC.