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by Roy Becker
During my first few months on the job in the international department of a bank, the department had open positions due to an unmanageable workload as a result of the conclusion of a U.S. West Coast dock strike. The release of pent-up shipments resulted in daily deliveries of mail and couriered packages containing shipping documents for processing for payment against letters of credit.
Doug, the letter of credit supervisor, had hurriedly promoted administrative assistants to document examiners.
He hired me, and 12 days later hired another employee and asked me to train him. Doug's availability to handle problems and answer questions was scarce because he was busily answering the telephone eight hours a day counseling customers whose lives were complicated by the dock strike. This was the environment for my entry into a long banking career.
On my first day Doug gave me a set of self-paced training manuals. After reading the books I felt I had a pretty good handle on the topic, from a textbook perspective anyway. But I quickly learned how the textbook differs from the real world.
The first assignment I received from Doug was to examine a set of documents against a letter of credit that our bank had issued to pay for an importation of giftware from Japan. I checked the documents and found about eight discrepancies in them.
Since the textbooks hadn't covered anything like this, I didn't know what to do next. I waited until Doug paused between phone calls and told him that I had encountered a rare occurrence—eight discrepancies!
Since the importer had a high volume of transactions, Doug knew them well. He simply instructed me to call the treasurer of the importer and tell him all the discrepancies I had found in the documents. "He’ll waive the discrepancies," Doug said.
I called the treasurer and, true to Doug's prediction, the treasurer said, "I don’t care about the discrepancies, I just want the goods. Please make payment and send me the documents so I can clear the goods through customs." This illustrates normal bank operating procedure: to obtain the importer's approval prior to making payment when the documents contain discrepancies.
If the importer wants the goods, they'll authorize the payment. While a bank does have the right to refuse payment without consulting the importer, they normally will call the importer first. A bank does not want to stand in the way of international trade. If the buyer wants the goods, the bank will proceed with the transaction. A bank will only refuse payment if so instructed by the buyer or if the bank fears risk of the buyer becoming insolvent for some reason.
I went on to check my next set of documents and once again found a number of discrepancies that the importer also waived. I soon learned that I would probably find discrepancies in the majority of the documents I checked. If I didn't find discrepancies, I would check them again because I figured I must have missed something.
This lesson illustrates how a bank handles discrepancies. It acts in accordance with the guidelines set forth in the Uniform Customs and Practice for Documentary Credits (UCP) that says, "When an issuing bank determines that a presentation does not comply, it may in its sole judgement approach the applicant for a waiver of the discrepancies" (Article 16 b). A bank does not want to stand in the way of trade, but it has an obligation to protect the buyer against risk. If the buyer approves, so will the bank in most cases.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| NJ2313E NACHI | 65 | 140 | 48 |
| NJ2313 NACHI | 65 | 140 | 48 |