Trade document examination is the review a bank carries out when documents are presented under a letter of credit, to decide whether they meet its terms and so oblige the bank to pay. Examiners compare each document, such as the commercial invoice, bill of lading, insurance document and certificates, with the credit, with the other documents and with the rules that govern the credit.
For a documentary credit subject to UCP 600, the rules of the International Chamber of Commerce, the bank judges compliance from the documents alone, on their face, and has a maximum of five banking days after presentation to decide. If the bank finds a discrepancy it may refuse, giving a single notice that lists every discrepancy, or ask the applicant for a waiver; this stage is covered under discrepancy handling. Examiners also screen the parties, goods and vessels for sanctions and trade-based money laundering risk.