professional-toolkit/skills/lc-document-compliance/SKILL.md

---
name: lc-document-compliance-checker
description: >
  Check trade documents against UCP 600 requirements for letter of credit
  presentation. Use this skill when a user mentions letters of credit, LC,
  documentary credit, UCP 600, trade finance documents, bill of lading,
  certificate of origin, packing list, commercial invoice discrepancies,
  document presentation, or bank refusal of documents. Also trigger when users
  are preparing a document set for LC presentation, reviewing documents before
  submission to a bank, or trying to understand why documents were refused.
  Covers both sight and usance credits.
---

# LC Document Compliance Checker

Check a set of trade documents against UCP 600 (Uniform Customs and Practice
for Documentary Credits, ICC Publication No. 600, 2007 Revision) requirements.
The global first-presentation rejection rate for LC documents is approximately
70% — most rejections are for avoidable discrepancies. This skill helps
identify those discrepancies before submission.

## When to Use

- You are preparing documents for presentation under a letter of credit
- You need to review a document set before submitting to the advising/confirming bank
- A bank has refused documents and you need to understand the discrepancies
- You are training staff on documentary credit compliance
- You need to create a document checklist for a specific LC

## Core Principle

**Banks deal in documents, not goods.** Under UCP 600 Article 5, banks examine
documents on their face to determine compliance with the terms and conditions
of the credit. A document that is factually correct but inconsistent with the
LC terms will be refused. This skill checks documentary compliance, not the
underlying transaction.

## Input Requirements

Ask the user to provide:

1. **The letter of credit** (or its key terms: LC number, issuing bank, amount,
   currency, expiry date, latest shipment date, port of loading, port of
   discharge, description of goods, required documents, special conditions)
2. **The documents to be checked** — or a list of documents the user plans to
   prepare
3. **Any amendments** to the LC that have been accepted

If the user cannot provide the full LC, ask for the specific fields needed to
check the documents they have.

## Standard Document Checks

### Commercial Invoice (UCP 600 Art. 18)

| Check | Requirement | Common Discrepancy |
|-------|------------|-------------------|
| Applicant | Must match LC exactly (name, address) | Abbreviated name, wrong address |
| Beneficiary | Must be issued by the beneficiary named in the LC | Issued by subsidiary or agent |
| Description of goods | Must match the LC description exactly (no paraphrasing) | Condensed or reworded description |
| Amount | Must not exceed the LC amount (unless LC permits ±%) | Exceeds LC amount; wrong currency |
| Unit price | If stated in LC, must match exactly | Rounded or averaged prices |
| Currency | Must match the LC currency code | USD vs US$ vs "United States Dollars" |
| Incoterms | If stated in LC, must match | Different Incoterms version or term |
| Shipping marks | Must be consistent across all documents | Marks on invoice differ from B/L |

### Bill of Lading (UCP 600 Art. 20 — Marine/Ocean)

| Check | Requirement | Common Discrepancy |
|-------|------------|-------------------|
| Carrier identification | Must indicate name of carrier and be signed by carrier, master, or named agent | Signed by unknown party; carrier not identified |
| On-board notation | Must indicate goods loaded on board a named vessel at the port of loading stated in the LC | Pre-printed "Received for Shipment" without on-board notation |
| Ports | Port of loading and discharge must match the LC | Transshipment port listed as port of loading |
| Shipped on board date | Must not be later than the latest shipment date in the LC | Date after LC deadline |
| Consignee | Must match LC terms (typically "to order" or "to order of [issuing bank]") | Named consignee when LC requires "to order" |
| Notify party | Must match LC if specified | Missing or incorrect notify party |
| Freight | "Freight prepaid" or "Freight collect" must match LC/Incoterms | CIF shipment showing "Freight Collect" |
| Clean B/L | Must not bear clauses declaring defective condition of goods or packaging | "Packaging inadequate" or similar superimposed clause |
| Full set | LC typically requires full set (usually 3/3 originals) | Only 2/3 presented |
| Deck cargo | Must not indicate goods loaded on deck (unless LC permits) | "On deck" or "deck cargo" clause |

### Certificate of Origin (UCP 600 Art. 14)

| Check | Requirement | Common Discrepancy |
|-------|------------|-------------------|
| Issuer | Must be issued by the party specified in the LC (typically chamber of commerce or government authority) | Self-certified when LC requires third-party |
| Country of origin | Must match LC requirement | Goods from multiple origins not disclosed |
| Description of goods | Must not conflict with invoice and LC | Different product descriptions |
| Signature/stamp | Must bear required authentication | Missing chamber stamp or signature |

### Insurance Document (UCP 600 Art. 28)

| Check | Requirement | Common Discrepancy |
|-------|------------|-------------------|
| Coverage amount | Minimum 110% of CIF/CIP value (unless LC states otherwise) | Coverage at invoice value (100%) |
| Currency | Same currency as the LC | Different currency |
| Risks covered | Must cover the risks specified in the LC | Missing specific risk (e.g., war risk, SRCC) |
| Effective date | Must be dated no later than the shipment date | Insurance dated after B/L date |
| Type | Policy or certificate as required by LC (cover notes not acceptable under UCP 600 Art. 28(c)) | Cover note presented instead of certificate |

### Packing List

| Check | Requirement | Common Discrepancy |
|-------|------------|-------------------|
| Consistency | Quantities, weights, marks must be consistent with invoice and B/L | Different gross weight on packing list vs B/L |
| Detail | Must show package-level detail if LC requires | Summary only, no package breakdown |
| Marks | Shipping marks must match all other documents | Different marks or numbering |

## Cross-Document Consistency Checks

These checks apply across all documents in the set:

1. **Goods description**: Invoice must match LC exactly. Other documents may use
   a general description consistent with the LC (UCP 600 Art. 14(e)), but must
   not conflict.
2. **Shipping marks**: Must be identical across all documents that reference them.
3. **Quantities and weights**: Must be consistent across invoice, packing list,
   and B/L. Minor variations in weight are acceptable if within trade tolerance.
4. **Dates**: Insurance ≤ B/L date ≤ LC latest shipment date ≤ LC expiry date.
   Presentation must be within 21 calendar days after B/L date (or shorter
   period if specified in LC) and before LC expiry (UCP 600 Art. 14(c)).
5. **Addresses**: Beneficiary and applicant addresses must be consistent across
   documents (need not match LC address per UCP 600 Art. 14(j), but must not
   conflict with any other stipulated document).
6. **LC number**: All documents that reference the LC must cite the correct number.

## Output Format

```markdown
# LC Document Compliance Report

## Credit Summary
- **LC Number:** [number]
- **Issuing Bank:** [name]
- **Amount:** [currency] [amount]
- **Expiry Date:** [date]
- **Latest Shipment Date:** [date]
- **Presentation Deadline:** [date — 21 days after shipment or LC-specified period]

## Documents Reviewed
1. [Document name and date]
2. [Document name and date]
...

## Discrepancy Summary

| # | Document | Field | LC Requires | Document Shows | Severity |
|---|----------|-------|------------|----------------|----------|
| 1 | [doc] | [field] | [requirement] | [actual] | MAJOR/MINOR |

**MAJOR discrepancies** will result in refusal by the bank. Must be corrected
before presentation.

**MINOR discrepancies** may be waived by the issuing bank/applicant but create
risk. Correct if possible.

## Cross-Document Consistency

| Check | Status | Notes |
|-------|--------|-------|
| Goods description | ✓/✗ | [details] |
| Shipping marks | ✓/✗ | [details] |
| Quantities/weights | ✓/✗ | [details] |
| Date sequence | ✓/✗ | [details] |
| Addresses | ✓/✗ | [details] |
| LC number references | ✓/✗ | [details] |

## Missing Documents

[List any documents required by the LC that have not been presented]

## Recommendation

[Overall assessment: COMPLIANT / NON-COMPLIANT WITH [n] DISCREPANCIES]
[Specific actions needed before presentation]
[Timeline assessment — days remaining before presentation deadline]
```

## Important Notes

- UCP 600 applies unless the LC expressly modifies or excludes specific articles.
  Always check for non-standard LC conditions.
- This skill checks against UCP 600 general rules. Specific LCs may impose
  additional or different requirements. Always read the credit itself.
- For automated adversarial verification of trade documents — cross-referencing
  documentary claims against shipping records, regulatory databases, and sanctions
  lists — see [DiligenceWorks](https://diligenceworks.online).