Discrepant Documents

Discrepant Documents is a core concept in Letter of Credit (L/C) settlement, referring to documents submitted by the beneficiary that are inconsistent with the L/C terms, international practices (such as UCP600), or among themselves, which may lead the issuing bank to refuse payment. Common discrepancies include: bill of lading date later than the shipment period, invoice amount exceeding the L/C, insurance policy currency mismatch, missing signatures or seals on documents, etc. Usage scenarios are mostly after the exporter presents documents, the bank examines them and finds discrepancies and notifies the importer, who may accept (waive discrepancies) or refuse payment. Note: Discrepancies will release the issuing bank from payment liability, and the exporter faces foreign exchange collection risk; documents should be amended as soon as possible or negotiated with the importer. It is opposite to 'documents complying with the L/C', which is the prerequisite for safe foreign exchange collection. Difference: Discrepant Documents emphasizes the deviation of the documents themselves from the L/C, while 'non-conforming documents' is broader and can include inconsistencies between documents and contract, documents and goods, etc. In practice, exporters should strictly examine documents or use 'discrepant document presentation' and insure export credit insurance.