Notice of Refusal Under a Letter of Credit: What to Review
How to read a bank's notice of refusal under a Letter of Credit and check whether it meets UCP 600 Article 16.
Reviewed by LCCheck team (owner-approved) · 2026-10-12
Short answer
A notice of refusal is the bank's single message stating it will not honour or negotiate a Letter of Credit presentation. Under UCP 600 Article 16(c) and (d), it must state that the bank is refusing, list every discrepancy, say what it is doing with the documents, and be sent by telecommunication (or other expeditious means) no later than the close of the fifth banking day after presentation.
| Rule | UCP 600 Art. 16(c)–(d) |
|---|---|
| Deadline | Close of the fifth banking day after presentation |
| If defective | Bank precluded from claiming non-compliance (Art. 16(f)) |
What to review
- Sent on time?
- Lists all discrepancies in one notice?
- Clearly states the bank is refusing?
- States the documents' status: held, returned, held pending waiver, or per prior instructions?
- Each discrepancy actually supported by the credit or standard practice?
What to do next
- Correct and re-present if time allows.
- Contact the applicant about a waiver.
- Take specialist advice before disputing.
Sources
General guidance, not legal advice. Your bank examines documents independently.
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