Required Documents in LC Transactions
The Bill of Lading (B/L)
The most critical document in sea freight. It serves three functions:
- Receipt: Confirms goods were received by the carrier
- Contract of carriage: Evidence of the shipping contract
- Document of title: Whoever holds the original B/L can claim the goods
Types: Full set original (3/3 originals required), straight B/L (non-negotiable), order B/L (negotiable — endorsed in blank or to a named party).
Commercial Invoice
Must match the LC exactly in description of goods, unit price, total amount, currency, and Incoterm. The invoice amount cannot exceed the LC amount.
Packing List
Detailed breakdown of cartons, weights (gross/net), dimensions, and marks/numbers. Must be consistent with the invoice and B/L.
Certificate of Origin
Issued by the exporter's chamber of commerce or trade body. Declares the country where goods were manufactured. Critical for preferential tariff treatment under trade agreements.
Insurance Certificate / Policy
Required when LC calls for CIF or CIP Incoterms. Must:
- Cover at least 110% of the invoice value (per UCP 600 Article 28)
- Be in the same currency as the LC
- Be dated no later than the shipment date
- Cover the risks specified in the LC
Common Discrepancies to Avoid
| Discrepancy | Prevention |
|---|
| Late presentation (>21 days) | Ship and present documents promptly |
| B/L presented after LC expiry | Monitor expiry dates |
| Description of goods differs | Copy LC wording exactly |
| Partial shipments when prohibited | Ship full quantity in one consignment |
| Short-shipped quantity | Verify weight/quantity certificates |
| Insurance amount insufficient | Ensure 110% coverage minimum |