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An amendment will generally arise following a request made by the beneficiary to the applicant. This will, as an example, be due to:

• an inappropriate or incorrect term, condition or document stated in the documentary credit;
• the applicant not completing the documentary credit application form according to the terms and conditions that were agreed in the sale contract, proforma invoice or purchase order;
• a need for an extension to the expiry date and/or latest shipment date to accommodate a delay in the production, manufacture or shipment of the goods;
• the applicant requiring additional goods of the same or different type;
• change of issuer of a required document.

If the applicant is in agreement, it will issue an amendment request to the issuing bank. It should be noted that the issuing bank is under no obligation to agree to that request.

However, an issuing bank is bound by the terms of an amendment as of the time it issues it.

When issuing an amendment, care should be taken to ensure that all terms and conditions of the documentary credit that are affected by the amendment are catered for. 

This subject is covered in far greater detail within our training module ‘documentary credits in practice' which can be purchased at https://www.tradefinance.training/shop/

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