ShankuChakraKnowledge & Industry Hub

ShankuChakra Protocol

SCP-008 — LC Document Verification Protocol

Revision date: 2026-09-01

ShankuChakra recommended operational protocol — this is not an official government or international standard.

Purpose

To verify that documents presented under a Letter of Credit comply exactly with the LC's terms and with UCP 600 / ISBP 745 practice, reducing the risk of payment delay or refusal due to discrepancies.

Scope

Applies to every shipment financed by a Letter of Credit, from review of the draft LC through to final document presentation.

Definitions

Discrepancy
Any inconsistency between the documents presented and the LC's terms, or between the documents themselves, that a bank may cite as grounds to refuse payment.
UCP 600
The ICC's Uniform Customs and Practice for Documentary Credits, the standard rules governing Letters of Credit.

Required Information

  • Draft or issued LC text in full
  • Underlying sales contract terms for comparison
  • Full set of documents intended for presentation
  • Shipment and presentation deadlines stated in the LC

Procedure

  1. Review the draft LC (before issuance, where possible) against the sales contract for consistency in product description, quantity, price, Incoterm and shipment period.
  2. Check that shipment and presentation deadlines are realistic given actual production and transit timelines — flag unworkable dates for amendment before the LC is issued.
  3. On receipt of the final issued LC, re-check it in full again, as issued LCs sometimes differ from the agreed draft.
  4. Before presentation, check every document against the LC's exact wording — descriptions, quantities, amounts, party names, and required certificates — and against each other for internal consistency.
  5. Resolve any identified discrepancy with the buyer or issuing bank before presenting documents, where possible, rather than presenting and risking refusal.
  6. Present documents within the LC's stated presentation period.

Checklist

  • Draft LC reviewed against sales contract before issuance
  • Shipment and presentation deadlines confirmed as workable
  • Issued LC re-checked in full on receipt
  • All documents checked against LC wording and against each other
  • Any discrepancies resolved before presentation where possible
  • Documents presented within the stated presentation period

Documents Required

  • Draft and issued LC
  • Full presentation document set
  • Discrepancy resolution correspondence, if applicable

Risks

  • Payment refusal due to a documentary discrepancy
  • Missing the presentation period due to underestimated processing time
  • Accepting unworkable LC dates that cannot realistically be met given production lead time

Common Mistakes

  • Not reviewing the LC in detail until shipment is already underway
  • Assuming the issued LC matches the negotiated draft without re-checking
  • Presenting documents with a minor inconsistency (e.g., quantity rounding, address formatting) that triggers a discrepancy

Verification Points

  • Has the LC been checked in full against the sales contract, both as a draft and as issued?
  • Are all shipment and presentation deadlines realistically achievable?
  • Do all documents in the presentation set match the LC's wording exactly and each other?

Disclaimer

This is a ShankuChakra recommended operational protocol, not an official government, regulatory, or international standard. It reflects common industry practice and should be adapted to the specific buyer, product, destination and contract. Always verify current legal, regulatory and customs requirements with the relevant authority before relying on this protocol for a commercial shipment.