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

name

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lc-document-compliance-checker

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

# 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.