Ucp 600
Meaning ~ Standardized set of international rules issued by the International Chamber of Commerce that governs the operation of letters of credit in global trade.
Discrepancy Notice
Meaning
Written notifications issued by a bank document the specific points on which presented shipping papers fail to match the conditions of a letter of credit. A discrepancy notice indicates that payment is suspended until the errors are resolved or waived. This communication lists each specific error identified by the examiner.
Bank Action
The document examiner lists every inconsistency found during the inspection of the shipping documents. This discrepancy notice is sent to the presenting bank or the beneficiary. It shifts the burden of correction onto the seller, who must decide whether to correct the errors or seek the buyer’s waiver.
Buyer Option
Importers have the right to accept or reject the flawed presentation. They can waive the inconsistencies to obtain the release of the shipping documents from the bank. However, waiving errors also means accepting any risk associated with the inconsistencies.
Financial Consequence
Receiving this notification causes delays in the transfer of ownership and payment. Each discrepancy notice usually incurs a flat processing fee from the bank. Furthermore, it halts the release of the bill of lading, which can cause demurrage fees to accumulate at the destination port as the ship lies waiting, thereby increasing the landed cost of the goods and delaying delivery to the distribution warehouse.