The Discrepancy Letter of Credit is a crucial document in South African international trade finance, used when documents presented under a Letter of Credit contain discrepancies that would otherwise prevent payment. This document becomes necessary when the bank identifies inconsistencies or irregularities in the trade documentation and requires formal acknowledgment from the beneficiary before proceeding with payment. Operating within South Africa's hybrid legal system, which combines Roman-Dutch civil law and English common law, the document must comply with both local banking regulations and international standards such as UCP 600. It serves as a legal record of the beneficiary's awareness of the discrepancies and their request to proceed with payment despite these issues, while providing necessary indemnification to the banking institutions involved.
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1. Letter Header: Bank's name, address, date, reference numbers (L/C number), and subject line
2. Opening Salutation: Formal greeting to the appropriate bank department/officer
3. L/C Reference Details: Specific details of the Letter of Credit including number, date, amount, and parties involved
4. Document Presentation Reference: Details of when and how the documents were presented
5. Discrepancy Acknowledgment: Clear listing and acknowledgment of each discrepancy identified by the bank
6. Indemnification Statement: Statement indemnifying the bank against any consequences of paying despite the discrepancies
7. Payment Request: Formal request for the bank to process the payment despite the discrepancies
8. Closing: Professional closing statement, signature block, and contact information
1. Previous Communication Reference: Include when there have been prior communications about the discrepancies that need to be referenced
2. Corrective Actions: Include when describing any corrective actions taken or proposed to address the discrepancies
3. Beneficiary Declaration: Additional declarations or confirmations as may be required by the specific bank or jurisdiction
4. Time Sensitivity Notice: Include when there are urgent timing considerations or expiry dates approaching
1. List of Discrepancies: Detailed appendix listing each discrepancy with specific reference to the relevant UCP 600 articles
2. Copy of Original L/C: Attachment of the original Letter of Credit for reference
3. Bank's Discrepancy Notice: Copy of the bank's formal notice outlining the discrepancies
4. Supporting Documents: Copies of relevant correspondence or documents supporting the payment request
Relevant legal definitions
Letter of Credit
Discrepancy
UCP 600
Issuing Bank
Advising Bank
Beneficiary
Applicant
Presentation
Documents
Indemnity
Banking Day
Complying Presentation
Credit
Negotiation
Original Documents
Documentary Requirements
Shipping Documents
Commercial Invoice
Bill of Lading
Certificate of Origin
Non-Compliant Documents
Examination Period
Notice of Refusal
Payment Undertaking
Reimbursement
Discrepancy
UCP 600
Issuing Bank
Advising Bank
Beneficiary
Applicant
Presentation
Documents
Indemnity
Banking Day
Complying Presentation
Credit
Negotiation
Original Documents
Documentary Requirements
Shipping Documents
Commercial Invoice
Bill of Lading
Certificate of Origin
Non-Compliant Documents
Examination Period
Notice of Refusal
Payment Undertaking
Reimbursement
Clauses
Reference Details
Documentary Presentation
Discrepancy Acknowledgment
Payment Request
Bank Indemnification
Document Examination
Notice and Communications
Authorization
Undertaking
Compliance with UCP 600
Banking Instructions
Document Release
Reimbursement
Governing Law
Liability
Force Majeure
Representations and Warranties
Contact Information
Documentary Presentation
Discrepancy Acknowledgment
Payment Request
Bank Indemnification
Document Examination
Notice and Communications
Authorization
Undertaking
Compliance with UCP 600
Banking Instructions
Document Release
Reimbursement
Governing Law
Liability
Force Majeure
Representations and Warranties
Contact Information
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Agriculture and Agribusiness
Mining and Resources
Retail
Wholesale
Logistics and Transportation
Energy
Commodities Trading
Relevant Teams
Trade Finance
International Banking
Documentary Credits
Export Operations
Import Operations
Treasury
Financial Control
Banking Operations
Trade Compliance
Legal and Regulatory
Relevant Roles
Trade Finance Manager
Export Manager
Import Manager
Documentary Credits Specialist
International Trade Compliance Officer
Banking Operations Manager
Letter of Credit Specialist
Trade Operations Manager
Financial Controller
Treasury Manager
Relationship Manager - Trade Finance
Chief Financial Officer
Trade Documentation Officer
Export Documentation Specialist
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