What Is a Letter of Credit Discrepancy? Definition and Examples
What a discrepancy means under a Letter of Credit, why it matters for payment, and realistic examples of how one arises.
Reviewed by LCCheck team (owner-approved) · 2026-10-12
Short answer
A Letter of Credit discrepancy is any way the documents presented fail to comply with the terms of the credit, the applicable UCP 600 rules or international standard banking practice. When a presentation is discrepant, the bank is no longer obliged to pay and may refuse the documents, so the beneficiary loses the payment certainty the credit was meant to give.
| Compliance test | Terms of the credit + UCP 600 + ISBP 821 (Art. 2, Art. 14) |
|---|---|
| Data between documents | Need not be identical, must not conflict (Art. 14(d)) |
| If discrepant | Bank may refuse; applicant may waive (Art. 16) |
Why discrepancies happen
Documents are prepared by several parties — seller, carrier, insurer, inspection company — often under time pressure. Each works from its own records, so dates, weights, names and descriptions drift apart unless someone checks them against the credit.
Is every difference a discrepancy?
No. Banks examine documents on their face. A typing error that does not affect the meaning is often not a discrepancy, and data need only not conflict rather than match word for word. Whether a specific difference is discrepant is a judgement for the examining bank.
What happens next
- Correct and re-present documents before the deadline, if time allows.
- Ask the applicant to waive the discrepancy; the bank then decides whether to accept.
- Accept a collection basis, where payment depends on the applicant.
Before-presenting checklist
- Credit and every accepted amendment in hand.
- Every 46A document present, with the right number of originals.
- 47A conditions applied to each affected document.
- Shipment, presentation and expiry dates met.
- Amounts, quantities, ports and parties consistent.
Worked example (fictional)
A credit names the port of loading as "Any port in Brazil". The bill of lading shows Santos, and the certificate of origin also states Santos — compliant. If the packing list instead stated Paranaguá, the data would conflict and a bank could treat it as a discrepancy.
Sources
- ICC — UCP 600 (Uniform Customs and Practice for Documentary Credits)
- ICC Academy — avoiding Letter of Credit discrepancies
General guidance, not legal advice. Your bank examines documents independently.
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