Letter of Credit Costs: Fees Exporters Should Understand
The bank fees that commonly arise in a Letter of Credit transaction and how to plan for them.
Reviewed by LCCheck team (owner-approved) · 2026-10-12
Short answer
A Letter of Credit carries several bank fees: issuance (usually paid by the buyer), and on the seller's side advising, confirmation, negotiation or payment, amendment, courier and discrepancy fees. Who pays each is set in field 71D of the MT700. Amounts vary by bank and country, so check each bank's current tariff.
| Where charges are allocated | MT700 field 71D |
|---|---|
| Usually buyer side | Issuance, issuing-bank amendment fees |
| Usually seller side | Advising, confirmation, negotiation, discrepancy fees |
Typical fees
- Issuance — percentage of the credit amount, often per quarter.
- Advising — flat fee.
- Confirmation — percentage reflecting bank and country risk.
- Amendment — per amendment.
- Negotiation or payment — percentage or flat fee.
- Discrepancy — per discrepant presentation.
- Courier and SWIFT charges.
How to control costs
- Agree charge allocation in the sales contract.
- Check 71D before accepting the credit.
- Avoid amendments by reviewing the draft.
- Avoid discrepancy fees with a pre-presentation check.
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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