Who Pays Letter of Credit Bank Charges: Applicant or Beneficiary?
How field 71D and UCP 600 Article 37 decide who pays Letter of Credit bank charges.
Reviewed by LCCheck team (owner-approved) · 2026-10-12
Short answer
Field 71D of the MT700 states which charges are for the beneficiary's account; a common wording is that all charges outside the issuing bank's country are for the beneficiary. Under UCP 600 Article 37(c), a bank instructing another bank is liable for that bank's charges, but if the credit states charges are for the beneficiary and they cannot be collected, the applicant remains liable.
| Field | 71D Charges |
|---|---|
| Rule | UCP 600 Art. 37(c) |
| Common wording | Charges outside issuing country for beneficiary |
What to check
- Read 71D before accepting the credit.
- Compare with what the sales contract agreed.
- Ask for an amendment if it differs.
Typical split
- Applicant: issuance and issuing-bank fees.
- Beneficiary: advising, confirmation, negotiation, discrepancy and own-bank fees.
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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