The first time you receive a letter of credit, it looks like someone filled out a tax form in a foreign language. Field numbers instead of headings. Codes where you'd expect words. Entire paragraphs of conditions crammed into a single text block with no formatting.
The second time isn't much better.
LCs follow the SWIFT MT700 message format — a structured template that banks use worldwide to issue documentary credits. Every field has a number, a name, and a purpose. The trouble is, nobody explains them in terms that relate to what you're actually trying to do: ship goods, prepare documents, and get paid.
So here's the practical version. Not every field in the MT700, but the ones that will directly affect your work.
Field 20 — Documentary Credit Number
This is the bank's reference number for the LC. You'll put it on every document you prepare — the invoice, the packing list, the certificate of origin, the bill of exchange. If you get this wrong on any document, it's a discrepancy.
Sounds simple. It is simple. People still get it wrong — usually because the LC has been amended and a digit changed somewhere, or because someone copies it from memory instead of from the document.
Write it down. Copy and paste it. Check it twice.
Field 31D — Date and Place of Expiry
Two pieces of information in one field. The date the LC expires and the location where documents must be presented. After this date, the LC is dead. No presentation will be accepted, no matter how clean your documents are.
The place matters too. If the LC expires at a bank in London, presenting documents to a bank in Singapore on the expiry date won't save you, even if Singapore is technically still the same calendar day.
Field 32B — Currency Code and Amount
The total value of the LC, stated in a specific currency. This is the maximum amount the bank will pay. Your invoice cannot exceed this figure unless the LC includes a tolerance (see Field 39A below).
Watch the currency code. If the LC is in USD and your invoice is in dollars but doesn't state "USD" explicitly, some banks will flag it. Spell it out, every time.
Field 39A — Percentage Credit Amount Tolerance
This field specifies how much the final invoice amount can vary from Field 32B. A tolerance of "5/5" means you can invoice up to 5% above or 5% below the LC amount.
If this field is blank, UCP 600 Article 30(a) allows a 5% tolerance in quantity for goods not packed in individual units — but the total drawn amount still can't exceed the LC amount. It's a common trap. You shipped a bit more, the quantity tolerance allows it, but the invoice total now exceeds Field 32B. Discrepancy.
Field 41D — Available With... By...
This tells you which bank you present documents to and how the LC will be settled. "By payment" means you get paid on presentation of compliant documents. "By negotiation" means a nominated bank can buy your documents. "By acceptance" or "by deferred payment" means you'll wait — 30, 60, 90, sometimes 180 days after shipment.
Read this field early. It determines your cash flow timeline for the entire transaction.
Fields 44A/44E and 44B/44F — Ports and Places
44A or 44E is the port of loading or airport of departure. 44B or 44F is the port of discharge or destination. These must match your transport documents exactly.
"Any port in China" gives you flexibility. "Shanghai, China" does not. If the LC says Shanghai and your bill of lading says Ningbo because the shipping line changed the route, you need an amendment before you ship — not after.
Field 44C — Latest Date of Shipment
The hard deadline for getting goods on the vessel. Your bill of lading's "on board" date must be on or before this date. Not the date you delivered cargo to the port. Not the date the vessel sailed. The date stamped on the BoL.
This is one of the most common discrepancy triggers in trade finance. Treat it as immovable.
Field 45A — Description of Goods and/or Services
This is the big one. The goods description in Field 45A must appear on your commercial invoice exactly as worded. Not paraphrased. Not abbreviated. Not reordered.
If the LC says "1,000 cartons of Grade A frozen chicken drumsticks, net weight approximately 20 metric tons," then your invoice must say exactly that. Changing "cartons" to "ctns" or "approximately" to "approx" is enough for a refusal.
Other documents (packing list, certificate of origin) can use a general description that's consistent with the LC, but the invoice gets no such flexibility. UCP 600 Article 18(c) is explicit about this.
This is the single field most worth reading three times.
Field 46A — Documents Required
The list of documents you must present. Bill of lading, commercial invoice, packing list, insurance certificate, certificate of origin — whatever the LC requires, it's listed here.
Each document will have specific requirements: how many originals, who must sign it, what information it must contain. Read every word. A requirement for "full set of clean on board ocean bills of lading made out to order and blank endorsed" contains about six separate compliance points, each one capable of generating a discrepancy on its own.
Field 47A — Additional Conditions
This is the field that causes the most trouble. It's where banks put everything that didn't fit neatly into the structured fields above: special certifications, additional document requirements, clauses about transshipment, conditions about packaging, inspection requirements, beneficiary statements.
Field 47A is free text. There's no standard format, no character limit that anyone seems to respect, and no guarantee that the conditions are even achievable. I've seen LCs with 47A conditions that contradicted Field 46A. I've seen conditions that required documents from entities that don't exist.
Read this field first, not last. If there's a problem with the LC, this is where it usually lives.
Field 48 — Period for Presentation
How many days after shipment you have to present documents to the bank. If this field is blank, UCP 600 defaults to 21 calendar days. If the LC specifies a shorter period — 14 days, 10 days, even 7 days — that's your deadline.
Calendar days, not business days. The clock starts on the shipment date shown on your transport document. If your BoL is dated a Friday, and you have 14 days, your deadline is a Thursday — even if you don't receive the BoL from your freight forwarder until the following Wednesday.
Build your entire post-shipment timeline around this number.
Field 49 — Confirmation Instructions
Whether the advising bank has been asked to add its confirmation. "Confirm" means your advising bank guarantees payment independently of the issuing bank. "May add" means it's optional. "Without" means no confirmation.
If you're trading with a buyer whose bank is in a country with currency restrictions or political instability, confirmation matters a great deal. It's the difference between relying on one bank or two.
The takeaway
An LC is a contract written in shorthand. Every field is a clause, and every clause is a potential discrepancy if your documents don't match it precisely.
The first thing to do when you receive an LC — before you manufacture, before you ship, before you touch a single document — is to read it field by field and ask yourself: can I actually comply with all of this? If the answer is no, request an amendment now. Not after shipment, when your only leverage is already on a container ship.
David Berney is the founder of SmartLC, a trade finance platform for managing the Letter of Credit lifecycle. He builds software for the people who actually prepare, check, and present trade documents.