Most letter of credit discrepancies on Egyptian produce shipments come from five places: a late presentation, a quantity that does not match the credit, a bill of lading that misses a required notation, a certificate dated after shipment, and a goods description that differs by a few words from the one in the credit. None of them has anything to do with the fruit. All of them can hold up payment while a reefer of perishable cargo sits at the destination port.

This note is written for importers who pay by documentary credit, and for their banks. PEI Trade is the exporter in these transactions, not a neutral party, so read it as the view from the documents desk at our end.

Why letter of credit discrepancies matter more on fresh produce

Under UCP 600, the issuing bank has up to five banking days after presentation to decide whether the documents comply. If it finds a discrepancy, it can approach the applicant for a waiver, which adds more days. On a dry cargo that is an inconvenience. On a citrus or pomegranate reefer arriving 7 to 14 days after sailing, a document set stuck at the bank means the buyer cannot take the original bill of lading to the carrier, free time runs out, and demurrage and plug charges start. The cargo does not wait for the paperwork.

The discrepancies we see most often

Late presentation

Unless the credit says otherwise, documents must be presented within 21 calendar days of the shipment date and before expiry. Produce credits are often opened with a short validity to match the season, and a vessel that rolls by a week can push presentation past expiry. Build at least ten spare days into the expiry date.

Quantity and the missing word “about”

A credit that asks for 1,540 cartons of Valencia oranges, 15 kg net, means exactly 1,540 cartons. The 5 percent quantity tolerance in Article 30 does not apply when quantity is stated in packing units. If the packhouse loads 1,512 cartons because the grading packout came in short, the invoice will not comply. Write “about” before the quantity and the amount, which allows a 10 percent tolerance either way.

Bill of lading notations

The bill of lading must show an on-board notation with a date, and it must be clean. Reefer bills sometimes carry the carrier’s temperature clause or a “shipper’s load, stow and count” wording, which is normal and acceptable, but any clause stating that the goods or packaging are defective makes the document unclean. Check the consignee and notify party lines against the credit letter for letter. Our reference on original, telex release and seaway bills explains which type suits which payment method.

Certificates dated after shipment

A phytosanitary certificate or certificate of origin issued a day after the on-board date is a frequent discrepancy when the credit requires documents issued on or before shipment. Egyptian control bodies usually issue on loading day, but not always. Ask for credit wording that accepts certificates issued after shipment, or remove the date condition.

Description of goods

The commercial invoice must describe the goods as the credit does. “Fresh Egyptian Navel oranges, Class I, count 72” on the credit and “Navel oranges, count 72/80” on the invoice is a mismatch. The other documents may describe the goods in general terms, but the invoice may not.

How to avoid them before loading

Send the draft credit to the exporter before it is issued. A ten-minute review of the draft catches almost every item above, and an amendment before shipment is cheap compared with a discrepancy fee, a waiver request and demurrage. Match the credit to the Incoterm you actually agreed: a CIF credit needs an insurance document dated no later than shipment, a CFR credit does not. For a comparison of credits against advance transfer and cash against documents, see our guide to payment terms on Egyptian produce exports.

If you are opening a documentary credit for a citrus, pomegranate or vegetable programme this season, send the draft to our documents desk on WhatsApp at +20 10 9911 1918 and we will return it marked up before your bank issues it.