What is document consistency and how to effectively achieve document consistency?

What is document consistency?   

Consistency of documents means that all documents provided by the exporter must strictly comply with the requirements of the letter of credit issued by the importing bank, or that all documents related to the sale of the goods produced and provided by the exporter must fully comply with the requirements of the letter of credit applied for by the importing party, without contradiction.

What are the key points of document consistency?

To achieve consistency in documents, banks must carefully review all documents to ensure that the type, content, and number of documents submitted by the beneficiary are completely consistent with the provisions of the letter of credit, even if the actual shipment of goods or the contents of the contract and confirmation letter contradict the provisions of the letter of credit, the letter of credit must prevail.

Therefore, if the documents negotiated by the bank appear to match the letter of credit but the goods do not match, the bank will not be held responsible as it has no way of knowing; On the contrary, if the actual goods are correct but the documents appear to be inconsistent with the provisions of the letter of credit, the bank shall bear the responsibility, and the applicant for the letter of credit can refuse to redeem the payment based on this.

How to effectively achieve document consistency?

It is currently very common to settle in international trade by letter of credit. Therefore, Chinese enterprises should strictly abide by the principle of document consistency in export business. When receiving a letter of credit issued by a foreign buyer, they should carefully review the letter of credit to determine whether its provisions are consistent with the contract, whether there are soft terms in the letter of credit, and whether the seller has the ability to comply with the various provisions of the letter of credit.

Once any problems are discovered, the buyer should be promptly notified to modify the letter of credit, and must not hold any lucky mentality. If it is deemed that there are no issues after verification, the documents should be carefully prepared in accordance with the provisions of the letter of credit to ensure strict consistency, in order to avoid adverse situations, prevent them in advance, and effectively protect one's rights.