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.
Notice of Refusal
Meaning
Formal communications from an examining bank declare that it is rejecting a presentation of shipping documents due to specific errors. This notice of refusal is sent to the presenting bank to explain the reasons for the rejection. It must be dispatched within the required time limits.
Discrepancy Statement
This document lists every reason why the bank is refusing to pay the seller. Under international rules, the notice of refusal must be sent in a single, complete message within five banking days of presentation. It must clearly state whether the bank is holding the documents or returning them.
Bank Action
The bank holds the rejected files at the disposal of the presenter or returns them. This action prevents the release of the goods to the importer until the issues are resolved. It is a protective measure that preserves the seller’s security while the payment is disputed.
Seller Response
Exporters must act quickly to correct the listed errors or negotiate a waiver with the buyer. If the errors cannot be resolved, the seller may have to find an alternative buyer or pay for the return shipment. This response must be handled before the cargo arrives at the destination port to avoid high storage fees, as the cost of holding containers can quickly exceed the value of the materials being shipped.