Badr Alghamdi
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Lessons

Documentary discrepancies: a clean shipment, rejected on paper

The goods shipped on time and arrived in order, and the bank still refused. A bank examines documents rather than shipments, and the five days it is entitled to take can outlast the deadline you needed in order to fix anything.

Live result
Conflicts appear at 1 of the five checks, and a refusal may land 5 days after the last deadline.
  • Presentation date24 November
  • Latest possible refusal1 December
  • Binding deadline26 November
No day is left on which a corrected set could be presented.
Conflicts appear at 1 of the five checks, and a refusal may land 5 days after the last deadline.No day is left on which a corrected set could be presented.

The two document choices

Try a presentation

The packing list wording

The transport document

The presentation date

24 November

The weekday grid uses the stated banking-day pattern.

Shipped5 Nov
Earliest deadline26 Nov, the transport limit
Credit expires28 Nov
Presented24 Nov
Refusal may arrive1 Dec
Left to correctnone, 5 days past

The examination bench

Five comparisons
Five document comparisons on the examination benchEvery comparison and its current outcome is visible. Selecting a row changes the cited description below the bench.Packing list wordingCredit: stated wordingDocument: shorter, nothing contraryDiffers, and nothing in it conflictsInspection certificate issuerCredit: no issuer identifiedDocument: the beneficiary signsCompliant, and the assurance is thinNo setting in this row can conflictOriginCredit: origin is a condition onlyDocument: none is called forThe bank does not examine thisNo setting in this row can conflictThe extra documentCredit: the document is not called forSet: included anywayDisregarded, and may be returnedNo setting in this row can conflictTransport documentCredit: on board notationDocument: received for shipmentConflicts with the credit

This comparison is against the synthetic credit's own transport requirement, using the UCP 600 Article 14 examination standard. It does not state what a real presentation would establish.

The deadline chain

Calendar days and banking days
The deadline chain1 of the five things on the bench conflicts with the credit. Presented on 24 November, a refusal may arrive as late as 1 December, which is 5 days after 26 November, so there is no date left on which a corrected presentation could be made. Shipment 5 November, earliest deadline 26 November, refusal by 1 Dec, money due 1 Dec.Shipped5 Nov21 days for the transport documentThe credit expiresYou presentThe bank's five banking daysLeft to correct and present againWhen the money is due1 Dec

UCP 600 Articles 14(b) and 14(c) are cited for the five banking day examination period and the transport document presentation limit. The chart describes their timing and reproduces no rule text.

Three clocks run here and none of them starts the next one. The presentation window closes on 26 Nov. The examination may run to 1 Dec. The money falls due on 1 Dec, and that third date is set by the credit rather than by the second clock ending.

When you had to present

Days left to correct
When you had to present1 of the five things on the bench conflicts with the credit. Presented on 24 November, a refusal may arrive as late as 1 December, which is 5 days after 26 November, so there is no date left on which a corrected presentation could be made. The last presentation date with time to correct is 18 November. The cure window drops by three days from 14 to 17 November and again from 21 to 24 November.days left

What the bank is not looking at

The fixed example leaves the certificate issuer unnamed, states origin without a document and includes an unrequested document. Availability is at sight, and all originals remain with the bank.

Not the goods, not the vessel, not whether the shipment was any good. A bank examines the documents it was told to examine, against the credit and against each other, and it does this without knowing anything about the transaction that produced them. That is the point of the instrument rather than a flaw in it: it is what lets a bank in one country pay against a shipment it will never see.

Three consequences follow, and all three surprise people. Wording that differs from the credit can comply, because the standard is whether data conflicts and not whether it matches. A condition the credit states without naming a document to evidence it is treated as though it were not written, which is usually the applicant's most commercially important sentence. And a document nobody asked for is disregarded, so the contradiction you were worried about inside it was never going to be read.

If the bank refuses

A refusing bank sends one notice, and it has to carry the whole refusal: that it is refusing, every discrepancy it is relying on, and what it is doing with the documents. It may hold them for your instructions, hold them while it asks the applicant to waive the discrepancies, return them, or act on instructions you already gave. Article 16 sets that out, and the timing runs on the same five banking days as the examination itself.

Two practical readings of that. Because the notice must be single and complete, a second discrepancy raised after you have answered the first is a different kind of argument from the first one. And because the waiver route exists, a discrepancy is not always the end of the presentation: it moves the decision to the applicant, who may have every reason to take the goods anyway. What it does end is the certainty, which is the thing the credit was bought for.

How the counting works

Model version
1.0

The formula, in words

  • Three deadlines, and the earliest binds. The transport document limit runs 21 calendar days from shipment, the credit has an expiry, and the credit may set a shorter presentation period; a comfortable expiry does not make a comfortable deadline.
  • The settlement clock stands on its own. At sight it ends with the examination ceiling. On deferred payment it runs from the event and tenor the credit names, without borrowing a day from the presentation or examination clocks.
  • Two clocks counted two different ways. The beneficiary's limit is counted in calendar days and the bank's in banking days at the place the banking act happens, so weekends and local holidays move it and a calendar day assumption loses days that were never there.
  • The bank's five days sit after your deadline, not inside it. They do not extend your window and cannot repair a late presentation, so the only margin you have is the margin you built before presenting.
  • Compliance is not sameness. Data is read for conflict rather than for identity, which cuts both ways: wording that differs can pass, and a detail you volunteered inside a required document can be compared against everything else and fail.
T=5+21=26T=5+21=26
where TT is the transport limit, with dates on 5 November and 26 November and the interval in calendar days.
D=min⁡(26,28)=26D=\min(26,28)=26
where DD is the binding deadline, the earlier of 26 November and 28 November, on 26 November.
R=P+5R=P+5
where RR is the refusal date and PP the presentation date, with the interval in banking days.
W=26−RW=26-R
where WW is the cure window, from 26 November to the refusal date.

A worked example

Shipment 5 November, a Wednesday in this scenario. The transport document limit is 21 calendar days after shipment, so 26 November. The credit expires 28 November. Three deadlines exist and the earliest binds, which is 26 November, two days before the date most people would have written in the diary.

The third clock. At sight the money falls due at the examination ceiling, 1 December. Ninety days from presentation on 24 November lands on 22 February, while ninety days from shipment on 5 November lands on 3 February.

Presented 24 November, a Monday. The examination period is five banking days following presentation, and banking days are not calendar days: 25, 26, 27 and 28 November are four of them, 29 and 30 November are a weekend, so the fifth is 1 December. A refusal arriving that day is on time. It is also five days after the transport limit and three days after expiry, so a conflict that could have been repaired in an afternoon cannot be repaired at all. The shipment was never the problem and the calendar was.

Presented10 Nov Mon14 Nov Fri17 Nov Mon18 Nov Tue19 Nov Wed21 Nov Fri24 Nov Mon
Refusal by17 Nov21 Nov24 Nov25 Nov26 Nov28 Nov1 Dec
Left to correct95210−2−5

The two facts worth carrying. The last presentation date leaving any cure window at all is 18 November, eight days before the deadline. And the window does not fall one day per day: from Friday 14 November to Monday 17 November it drops from 5 to 2, three days gone over a weekend nobody spent, and the same three-day drop repeats from 21 to 24 November. Backward planning from expiry with calendar days silently destroys the chance to present again.

What this does not model

Bank holidays, a place of presentation different from the place of expiry, expiry falling on a non banking day, amendments, confirmation, transfer, assignment, partial shipment, instalments, insurance and transport articles beyond the on board question, the applicant's waiver decision, and every discrepancy that is not one of the five on the bench. The settlement clock does not model whether a bank will pay, a second notice, a waiver decision, a second calendar or any term beyond the availability, starting event and tenor shown.

Where this comes from

The standard cited first is the credit's own condition or the UCP article, and a practice guide is cited second as explanation of how the article is applied rather than as a rule of its own; this page follows that order everywhere and reproduces neither.

The citations are UCP 600 Articles 14(b), 14(c), 14(d), 14(g), 14(h) and 16. ISBP is cited as practice guidance for documentary examination, not as a separate term of the synthetic credit. No wording from either publication is reproduced.

Article 16 is cited for the single notice, its contents and the four dispositions, and the ICC's practitioner collection on UCP 600, Publication 682, is cited for the reading that the examination period is a ceiling rather than a payment date. Both are named and neither is reproduced.

UCP 600 and ISBP are cited as published sources; this lesson describes their examination framework and reproduces none of their text. Every document, date and figure shown here is synthetic. The page describes how five document mechanics and one calendar behave, and it does not determine whether any real presentation complies, whether a refusal is effective, or what a bank or applicant will do.

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