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Discrepancy Letter Of Credit for Malaysia

Discrepancy Letter Of Credit Template for Malaysia

A Discrepancy Letter of Credit document under Malaysian jurisdiction is a formal written acknowledgment and request issued by the beneficiary (typically an exporter) to a bank, addressing discrepancies identified in documents presented under a Letter of Credit. The document operates within Malaysia's legal framework, particularly under the Financial Services Act 2013 and in accordance with UCP 600 international standards. It serves as a crucial instrument in international trade transactions, enabling the beneficiary to proceed with payment collection despite documentary discrepancies, while providing necessary indemnification to the banking parties involved.

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What is a Discrepancy Letter Of Credit?

The Discrepancy Letter of Credit is essential in international trade finance when documents presented under a Letter of Credit contain discrepancies that could otherwise result in payment rejection. Operating within Malaysia's robust financial services framework, this document is typically used when minor documentary inconsistencies are discovered during the bank's document examination process. It provides a formal mechanism for the beneficiary to acknowledge these discrepancies while requesting the bank to proceed with payment processing. The document must comply with both Malaysian banking regulations and international banking practices (UCP 600), making it particularly important in Malaysia's trade-focused economy where Letters of Credit are commonly used in cross-border transactions. It includes specific indemnification clauses protecting the banks involved and must be properly authorized by the beneficiary's representatives.

What sections should be included in a Discrepancy Letter Of Credit?

1. Letter Header: Company letterhead, date, reference numbers, and addressee details

2. LC Reference: Clear identification of the Letter of Credit number, date, and issuing bank

3. Transaction Details: Details of the underlying transaction including amount, shipment details, and document presentation date

4. Discrepancy List: Detailed enumeration of all discrepancies found in the documents

5. Acknowledgment: Formal acknowledgment of the discrepancies listed

6. Payment Request: Formal request for the bank to process the payment despite the discrepancies

7. Indemnification: Statement indemnifying the bank against any claims arising from paying against discrepant documents

8. Signature Block: Authorized signature, name, title, and company stamp

What sections are optional to include in a Discrepancy Letter Of Credit?

1. Waiver of Protest: Additional waiver of right to protest if payment is refused - used when dealing with particularly significant discrepancies

2. Amendment Request: Request for LC amendment if applicable - used when discrepancies could be resolved through an amendment

3. Previous Communication Reference: Reference to any prior communications regarding the discrepancies - used when there have been previous discussions

4. Time Extension Request: Request for extension of time for document presentation - used when documents are being presented near expiry date

What schedules should be included in a Discrepancy Letter Of Credit?

1. Copy of Letter of Credit: Complete copy of the original LC and any amendments

2. List of Presented Documents: Detailed list of all documents presented under the LC

3. Bank's Discrepancy Notice: Copy of the bank's formal notice listing the discrepancies found

4. Supporting Correspondence: Copies of any relevant prior correspondence regarding the discrepancies

5. Authorization Evidence: Evidence of signatory's authority to sign the discrepancy letter on behalf of the beneficiary

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions

























Clauses















Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Agriculture and Food

Oil and Gas

Electronics and Semiconductors

Textile and Apparel

Commodities Trading

Logistics and Shipping

Import/Export

Wholesale Distribution

Relevant Teams

Trade Finance

International Banking

Documentary Credits

Export Operations

Import Operations

Treasury

Compliance

Legal

Finance

International Operations

Risk Management

Documentary Collections

Relevant Roles

Trade Finance Manager

Export Manager

Import Manager

Documentary Credit Specialist

International Trade Specialist

Banking Operations Manager

Letter of Credit Officer

Compliance Officer

Trade Documentation Officer

Finance Director

Treasury Manager

Banking Relationship Manager

Trade Finance Analyst

Chief Financial Officer

International Business Development Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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