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Jane Fennelly, an attorney with the law firm of Creim, Macias & Koenig, LLP, put together this checklist to help you avoid some of the more common LC pitfalls.
1. Do we have all original documents? LC? LC amendments, etc.?
Yes______
No _______
If not, who has them? _______________
2. Do we have all shipping, invoices or other documents needed to comply with the LC requirements?
Yes______
No______
If not, what's missing? _______________
3. Who is preparing the sight draft?
We are______
Our attorney is______
4. Who is preparing the draw letter, which must "mirror" LC language exactly, including any punctuation?
We are______
Our attorney is ______
5. Do the invoices exceed the face amount of the LC?
Yes_______
No______
(It is up to the discretion of the issuing bank to honor the LC if it exceeds the invoice amount and the account party does not agree.)
6. Do the invoices, etc. comply with the Uniform Customs and Practices for Documentary Credits (UCP) requirements for this type of document and the draw terms?
Yes_______
No_______
7. Have we allowed plenty of time for mistakes?
Yes______
No_______
The bank has seven (7) days to examine and return for discrepancies. We do not want the LC to expire if there are problems.)
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