What is a letter of credit used for?
A letter of credit is used when the seller cannot judge the buyer's credit but trusts the buyer's bank. The exporter gets a bank's promise of payment, and the importer pays nothing until the goods have shipped as agreed. The protection is real but it costs bank fees, and the documents take skilled preparation.
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Which documents does a letter of credit usually ask for?
The credit itself lists them. For goods coming into Kenya, ADL's advice is that the credit should ask for the documents Kenyan clearance needs, so the bank's check and the customs check line up: the commercial invoice, bill of lading or air waybill, packing list, Certificate of Origin, export declaration and, where the goods need one, the Certificate of Conformity.
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What is a discrepancy under UCP 600?
A discrepancy is any way a presented document fails to match the letter of credit: a misspelt name, a late shipment date or a goods description that differs from the invoice. The bank can hold payment until the documents are corrected and presented again, which costs time and fees. UCP 600 is the International Chamber of Commerce (ICC) rulebook for documentary credits.
Placeholder: confirm on ICC's UCP 600 the standard deadline for presenting documents after shipment
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