Lessons · Lesson 2 of 7
- 01 · The credit arrives, and it is a specification
- 02 · The amendment is the only fix, and three parties must agree
- 03 · What a discrepancy actually is
- 04 · Refusal, waiver, and the discrepancy you cannot cure
- 05 · Three dates, one calendar, and the document with the longest tail
- 06 · Confirmation is a product, and it has a price
- 07 · What a credit protects you against, honestly
The amendment is the only fix, and three parties must agree
Build one amendment request that can be accepted whole, and price the decision when the answer comes back carrying something you did not ask for.
Lesson 2 of 7 · 22 min
You cannot fix a credit by agreeing with your buyer
23 March. Yusra Rifaat has now read field 46A properly, and Qaitbay Garments has five problems with credit BCB/IL/0884. Her first instinct is the natural one. Telephone Brackenbury, explain, get an email confirming the sensible version, and carry on.
That instinct is wrong, for the reason lesson 1 gave. The credit is separate from the sale contract. An email from your buyer is evidence about the contract. It is not evidence about the credit. The bank that reads your documents in July has never seen it and cannot act on it. The only thing that changes a credit is an amendment issued by the issuing bank.
The chain of consent, and who can stop it
An amendment has to travel the same full circle the credit did.
- You ask. The beneficiary cannot instruct anybody's bank. So you write to the applicant, your buyer.
- The applicant instructs. Brackenbury must decide to ask Batinah Commercial Bank for the change. They are free to refuse, and nothing in the credit obliges them.
- The issuing bank issues. Batinah must be willing. Raising the amount, extending the expiry or relaxing a document all increase the bank's own risk on its customer, and the bank looks at it that way.
- The confirming bank, if there is one, must agree separately. It may pass the amendment on without extending its confirmation to it. You are then confirmed for the old terms and unconfirmed for the new ones, which is worth knowing before you ship.
- You accept. Until you do, the original terms stand as far as you are concerned.
Two things catch people out here. Silence is not a refusal. If you say nothing and later present documents that match the amendment, that presentation counts as your acceptance of it. So an amendment you dislike must be refused in writing, promptly. Ignoring it does not work.
And you cannot accept half of one. An amendment is accepted or refused as a whole. If it changes four things and you want three of them, you either take the fourth as well or go round the circle again for a second amendment. This is the most important practical fact about amendments, and it is what makes the next section a decision rather than a piece of admin.
Ask for everything at once
Yusra sent her request to Brackenbury on 23 March and copied Bahari Bank. It listed five changes in priority order, with the reason for each in one line. Priority order matters. It shows the applicant what is essential and what is negotiable, so they do not refuse the lot because of item five.
| Requested | Why | Outcome | |
|---|---|---|---|
| 1 | Delete the applicant's inspection certificate; substitute a certificate from Argosy Inspection Services | Not a document the beneficiary can produce | Granted |
| 2 | Extend expiry from 5 July to 20 July | The original left no room after presentation | Granted |
| 3 | Correct the goods description to 240 gsm | The credit and the PO disagree | Granted |
| 4 | Allow partial shipment | Protects the order if one colour runs late | Refused |
| 5 | Move charges outside Oman to the applicant's account | Worth asking; costs nothing to be told no | Refused |
Three out of five is a good result, and the two refusals were the two Yusra had marked as negotiable. Amendment 1 reached Qaitbay through Bahari Bank on 1 April, nine calendar days after the request.
Nine days is the number to remember. An amendment is cheap and slow. Bahari Bank charges Qaitbay USD 60.00 to advise one. That is their own published tariff for this account. Every rate in this course is a charge quoted by a named party, not a market figure you should expect to see. The cost is trivial. The time is not, and it is not under your control, because two of the five steps happen inside other companies.
The change nobody asked for
Amendment 1 also carried a fourth line. Field 44C, latest shipment date, 20 June changed to 13 June.
Nobody at Qaitbay asked for it. Brackenbury's own customer is an oilfield contractor with a plant shutdown starting on 31 July, and they had brought their delivery date forward. So Brackenbury added the change to the instruction they were already giving their bank. It was not sharp practice. It was efficient, and it was the only amendment they were going to pay for.
Qaitbay now has one decision with two options, because partial acceptance does not exist.
Accept the whole amendment. The inspection clause goes. The expiry moves out. The description is corrected. And the ex-factory date moves in by seven days. Qaitbay's production manager priced those seven days at USD 1,864.00 of overtime across the two lines running QG-2140, which is USD 0.129 a coverall.
Refuse the whole amendment. The shipment date stays at 20 June and the overtime is not spent. Field 46A item 5 also stays: a certificate of inspection signed by Mr R. Brackenbury or his authorised representative, with the signature to be verified by the issuing bank.
A second amendment, and the one nobody thought of
On 12 May the shipping line withdrew the nominated sailing. Brackenbury also changed the carton pack from 12 pieces to 10 for their customer's stores, which meant the packing wording in field 45A had to change too. Amendment 2 was requested on 13 May and advised on 19 May. Another USD 60.00, another six days.
Two amendments, USD 120.00, fifteen days of calendar. That is the whole cost of the amendment machinery on this order, and it is small.
Here is what nobody asked for in either round. Field 48, the presentation period, said 15 days after shipment date throughout. Extending it to 21 days would have cost the applicant nothing. It does not change their goods, their price, their delivery or their bank's risk by any amount they would notice, and it would have been granted for the asking. Everyone at Qaitbay pushed on the expiry date, because that is the date that looks like the deadline. Lesson 5 shows which of the two was actually binding, and lesson 4 prices the difference.
Check yourselfAn amendment arrives extending your expiry by two weeks and cutting the credit amount by 4%. You want the first and not the second. What can you do?Show the answer
Accept both or refuse both. There is no partial acceptance. If you refuse, the original credit stands in full, expiry included, so refusing is not a neutral act. The practical move is to refuse in writing, immediately and with the reason, and ask the applicant for a fresh amendment carrying only the expiry change. That costs another cycle of days. This is exactly why you ask for everything at once the first time, and why you check whether the amendment carries anything you did not request before you reply.