Definition
An LC amendment is a formal modification to the terms of an existing letter of credit. It requires the consent of all parties — the applicant (buyer), the beneficiary (seller), the issuing bank, and any confirming bank.
Why it matters for traders
LC amendments are common but costly. Each amendment incurs bank fees (USD 50-200+), causes delays, and introduces the risk of miscommunication. Tracking amendments is critical for audit and cost control.
Common reasons for LC amendments
- Extension of shipment or expiry dates
- Change in shipment quantity or value
- Modification of required documents
- Change in port of loading or discharge
- Correction of errors in the original LC
- Addition or removal of confirming bank
The amendment process
- Applicant requests amendment from the issuing bank
- Issuing bank issues the amendment and transmits it to the advising bank
- Advising bank notifies the beneficiary
- Beneficiary accepts or rejects the amendment
- If accepted, the LC terms are updated
Operational example
An LC was issued for shipment by March 31, but the supplier needs until April 15. The buyer requests an amendment to extend the shipment date. The issuing bank transmits the amendment, the beneficiary accepts, and the new date becomes the valid shipment deadline. Amendment fee: USD 75 charged to the applicant.