Discrepancy Fee

Discrepancy Fee refers to a fee charged by the issuing bank or nominated bank in international trade settlement under a Letter of Credit (L/C) when the documents submitted by the beneficiary are inconsistent with the L/C terms (i.e., there is a "discrepancy"). This fee is usually borne by the beneficiary, as discrepancies may lead to increased bank processing costs, payment delays, or the risk of refusal. It is commonly encountered in document presentation under L/Cs, especially in cases such as spelling errors in documents, late presentation, amount discrepancies, or missing required signatures. Points to note: The discrepancy fee is not fixed, and banks charge different rates (commonly USD 50–150); even if the issuing bank accepts the discrepancy and makes payment, the fee may still be deducted; if the discrepancy is serious, the bank may refuse payment and return the documents. Unlike an "amendment fee," a discrepancy fee arises after document presentation, whereas an amendment fee arises from amending the L/C before presentation. Exporters should scrutinize documents carefully to avoid discrepancies, thereby saving costs and reducing foreign exchange collection risks.