What should I do if a foreign related letter of credit is refused to be paid in a foreign bank?

First of all, look at the reason for the refusal given to you by the other party, analyze whether it is reasonable, if it is obviously unreasonable, you must immediately refute, if the other party is a well-known bank, he will not worry about his reputation and will no longer be entangled, and will agree to pay. If you are not a big bank, it may be a bit of a trick, so you should contact your customer as soon as possible while refuting with the bank.

If the chargeback reason is correct, then you can only contact your customer as well.

In conclusion, the attitude of your customers is very crucial. As long as your business is normal, there is no problem with the goods, and the customer generally does not cheat, he can apply to the bank to accept the discrepancies. At this point, you can safely collect your remittance.

The worst one is: the reason for the discrepancy is reasonable, and the customer does not want the goods, so you have to apply to the other party's bank to keep the documents, and then you see if you can resell the goods to others, and the business loses.

I passed netizens a few days ago. After receiving the letter of credit from the bank with a non-concretance message, you only need to do the following:

1. Check whether the discrepancy is really established, if it is not established or the ambiguous discrepancy requires your submitting bank to argue with the issuing bank;

2. If it is really a discrepancy, you can't recover it, immediately contact the L/C applicant or your customer to accept the discrepancy. Pay the ransom to its issuing bank.

Remember: as long as the applicant accepts the discrepancy documents, the issuing bank will not refuse to pay, but the issuing bank will definitely deduct the non-concrepancy fee.

Is the refusal of the issuing bank due to a discrepancy? You should have received a notice of discrepancies, which lists the details of the discrepancies, if the submission period has not passed, you can modify the documents and resend the documents to the issuing bank, if the documents are OK, the issuing bank will revoke the discrepancies. Another way is to go directly to your customer acceptance if you have a good relationship with the customer.

In short, in line with the principle of friendly negotiation to solve this problem, the general customer will accept the non-conforming point acceptance payment.

In general, the refusal of a letter of credit in a foreign bank will involve a discrepancy in the documents submitted by the exporter.

In this case, you can negotiate with the importer of the goods or the applicant to accept the discrepancy and notify the paying bank to release the loan.

Contact the customer. If the customer doesn't accept it, there will be no chargebacks

The issuing bank's notice of refusal to pay to the L/C must meet the requirements of calling the negotiating bank or the submitting bank or the confirming bank in time to express the refusal, and the reason for the refusal needs to be explained in order to be valid.

The general procedure for payment by letter of credit is:

1. The parties to the import and export double cherry blossom shouting and burying should be in the sales contract.

, clearly stipulate that payment shall be made by letter of credit;

2. The importer shall submit an application for issuance to the bank where it is located and fill in the application form for issuance.

and pay a certain deposit or provide other guarantees, and ask the bank (issuing bank) to issue a letter of credit to the exporter;

3. The issuing bank shall issue a letter of credit with the exporter as the beneficiary according to the content of the application, and notify the exporter of the letter of credit through its ** bank or correspondent bank (collectively referred to as the advising bank) where the exporter is located;

4. After the exporter ships the goods and obtains the shipping documents required by the letter of credit, he shall negotiate the payment with the bank where he is located (which can be the advising bank or other banks) according to the provisions of the letter of credit;

5. After the negotiating bank negotiates the payment, it shall indicate the negotiated amount on the back of the letter of credit.

The main reasons for the refusal of the issuing bank are the discrepancies, including the incomplete documents or the inconsistencies between the documents and the requirements of the L/C, otherwise the issuing bank must unconditionally pay the foreign exchange in the documents. Of course, if the country has a bad reputation, it is very likely that the issuing bank and foreign merchants will join forces to play scoundrels and refuse to pay for no reason.

Reasons for the bank's refusal to pay the letter of credit:

1. The information in the documents does not match the requirements of the letter of credit: the description of the goods in the documents, the type of documents submitted, and the number of documents submitted are inconsistent with the requirements of the letter of credit, so it is easy for the bank to refuse to pay the letter of credit, so it is best to prepare the relevant documents and information;

3. Expiration of L/C: When the buyer and seller reach an agreement to pay for the goods by L/C, the validity period of the L/C will be indicated, and the submission of scattered documents after the validity of the L/C is deemed invalid, so the bank will refuse to pay the L/C;

4. Overdue documents: Overdue documents refer to the failure to submit documents in time within the specified time.

The refusal of the issuing bank to pay the documents under the L/C indicates that the beneficiary's documents are inconsistent, and the issuing bank is relieved of its commitment to pay the beneficiary.

The question is: must the beneficiary first carefully check and verify whether there are any discrepancies in the documents submitted by him/herself. If so, then you should immediately get in touch with the applicant (customer) to explain the situation to the applicant, and ask the applicant to accept the discrepancy (also known as "waiver of discrepancies") and make a payment and redemption order to the issuing bank.

If there is no discrepancy in the beneficiary's documents as pointed out by the issuing bank, that is, the beneficiary's documents meet the requirements of the L/C for documents, and the issuing bank's reasons for the discrepancy are not established, then the beneficiary should refute the arguments of the issuing bank, point out the reasons for the inconsistencies, and require the issuing bank to make payment immediately.

Therefore, it is necessary to deal with it accordingly according to different situations.

1. The information in the documents does not match the requirements of the letter of credit: the description of the goods in the documents, the type of documents submitted, and the number of documents submitted are inconsistent with the requirements of the letter of credit, so it is easy for the bank to refuse to pay the letter of credit, so it is best to prepare the relevant documents and information; The information is inconsistent between the documents.

The description of the goods, the currency between the documents, the inconsistency of the marks between the documents, etc., may lead to the refusal of the bank to pay the letter of credit. 3. Expiration of L/C: When the buyer and seller reach an agreement to pay for the goods by L/C, the validity period of the L/C will be indicated, and the submission of documents after the validity of the L/C is deemed invalid, so the bank will refuse to pay the L/C.

4. Overdue documents: Overdue documents refer to the failure to submit documents in a timely manner within the specified time, and in any case, the documents shall be submitted no later than the maturity date of the letter of credit. The time for submission of documents is strictly stipulated, and if the time limit is exceeded, the letter of credit will be rejected.

5. Expired shipment: At present, most import and export enterprises are looking for freight companies to be responsible for the booking and shipment of goods. If the exporter does not pay attention to the operation process of the company in time.

For example, the arrival time of the container, the loading time, the confirmation of the bill of lading, customs declaration, etc., may delay the shipping schedule. In addition, whether it is a foreign trade enterprise or a factory foreign trade, due to a large number of orders, the salesman can not arrange the shipment period, the output can not be reached before loading, and it is bound to delay the shipping schedule, resulting in overdue shipments, and the bank will refuse to pay the letter of credit. 6. Insurance documents:

The insured amount and insurance rate do not match the letter of credit; The type of insurance insured does not match the letter of credit; The date of issue of the insurance document is later than the date of issue of the transport document. 7. Transport documents: unclean bill of lading; The freight is borne by the beneficiary, but there is no "freight prepaid" mark on the transport document; Violation of the "batch or transhipment" operation specified in the letter of credit; The place of departure and the port of destination are inconsistent with the letter of credit; A bill of lading issued not by each carrier or its **person but by the shipper**.

The bank has the right to refuse payment mainly because the beneficiary does not follow the requirements of the letter of credit, or there are discrepancies in the documents

In other words, only if the beneficiary fully complies with the provisions of the letter of credit, it is possible to get the payment smoothly

This is a way for banks to protect applicants

In fact, before delivery, you can let the customer change the shipping schedule on l c first, so that it is safer. Now, discuss with the customer and let the customer accept the discrepancies, and the bank should not not not pay!

Was the notice received through the negotiating bank? If so, then immediately notify the issuing bank through the negotiating bank to keep the documents on behalf of the issuer for disposal. At the same time, you should contact the customer immediately to explain that there is a discrepancy in the documents you submitted, and hope that the customer can accept the discrepancy and make a payment ransom.

But the question is, what type of discrepancies do you have? Is it just a discrepancy in the documents, or a discrepancy in the quality of the goods? If it is the former, there is a chance that the customer will be accommodating and paying the ransom bill; If it is the latter, the customer may refuse to be accommodating.

Therefore, depending on what kind of discrepancies in your documents are used, you should take different ways to explain them to the customer in order to achieve the best results. If it is a problem of goods or quality, the customer pays you nothing to consider, or find another customer in the local area to resell the goods; Either the goods are shipped back. Of course, there will be a loss, but it is better than running out of money.

As for the issuing bank, it is generally unlikely that the issuing bank will collude with the customer to take the goods away, because if the issuing bank releases the bill to the customer, then the issuing bank is tantamount to accepting the discrepancy and they must pay.

Banks guarantee their own creditworthiness and generally do not collude in fraud. If you have concerns, you can add confirmation to the letter of credit. The safest and safest way to collect foreign exchange by letter of credit.

The letter of credit is refused, indicating that the documents submitted by the beneficiary do not meet the provisions of the letter of credit, and the letter of credit is invalid, and the issuing bank thus releases the commitment to guarantee payment to the beneficiary, so it becomes a collection at this time - the consignor should quickly contact the consignee (issuing applicant) at this time, and ask them to go to the issuing bank to handle the payment and redemption of the bill, that is, accept the existing documents and make payment - but at this time, there is a risk, that is, if the issuing applicant is not in good business conditions at this time, or the market changes unfavorably, Then the applicant (consignee) may neither want the goods nor pay; In some cases, the consignee can coerce the consignor to demand a price reduction or discount; Of course, if the consignee is in excellent creditworthiness, it is entirely possible to go to the issuing bank to pay for the ransom.

Therefore, at this time, the beneficiary should contact the consignee (the applicant for issuance) as soon as possible, explain the situation, and ask them to go to the issuing bank to make payment and redemption - of course, at this time, it is necessary to say something that has cooperated well in the past and will continue to cooperate in the future, so as to impress the consignee (applicant for issuance) to achieve the purpose of collecting foreign exchange payment.

At the same time, inform the buyer of the areas in the letter of credit that need to be changed, and ask them to change it until you are satisfied. So said received. Then the bank refuses to pay for the goods, that is, the jargon "non-payment". Return the documents to the seller and the seller will dispose of them himself.

Identify the reasons for the rejection and see if it can be remedied.

Require the negotiating bank to return the bill to ensure the safety of the goods.

According to the UCP rules, the only reason for the refusal of the letter of credit is the non-conformity of the documents submitted, mainly due to the following problems:

There is a discrepancy in the document itself. For example, the type and number of documents are incomplete; The content is contradictory or inconsistent with the letter of credit and the terms of the applicable UCP.

The place and time of submission are not in accordance with the provisions of the letter of credit. For example, late delivery.