Understand the Limits | Rarely Used in Modern Trade | SWIFT MT700 Format Possible

⚠️ Beware: Can Your Buyer Cancel the LC Without Warning?

A Latin American exporter once relied on a Revocable LC without knowing the risk. Three days before shipment, the buyer’s bank revoked the LC. No payment. The deal collapsed. Since then, they only use Irrevocable LCs with NNRV.

• 🧠 “We learned the hard way. With NNRV’s advice, we only accept secure, non-revocable LCs.” – Juan C., Leather Exporter

What is a Revocable Letter of Credit (LC)?

A Revocable LC is a documentary credit that can be modified or cancelled by the issuing bank at any time—without prior consent of the seller. It exposes the exporter to major risk, making it an outdated and rarely used option in international trade.

At NNRV Trade Partners, we do not recommend Revocable LCs for any transaction unless both parties require full flexibility and acknowledge the risk. We always structure more secure alternatives like Irrevocable or Confirmed LCs.

• 🧠 “Revocable LCs are like unsecured promises. If you’re serious about payment security, don’t use them.” – Hakeem S., Logistics Operator

Key Characteristics of Revocable LC

⚠️ Can Be Canceled Anytime – Issuing bank can withdraw or amend the LC without notice.

⚠️ No Bank Guarantee – Not legally binding once revoked.

⚠️ High Risk for Seller – No assured payment even if documents are compliant.

⚠️ Not UCP 600 Standard – Only usable under outdated conditions or for very specific trade models.

✅ Rare Use Cases – May be used in intra-group trades, small pilot orders, or highly flexible B2B trials.

How Does a Revocable Letter of Credit Work?

1. Buyer Requests a Revocable LC – Issued under MT700 format but flagged as “revocable.”

2. Bank Issues the LC – Without commitment to honor payment.

3. Seller Ships Goods – At their own risk.

4. Bank May Revoke LC – Even after goods are in transit.

5. Payment Not Guaranteed – Seller may not receive funds.

📂 Documents Usually Required (When Accepted)

Due to its risky nature, very few financial institutions support Revocable LCs. Still, some clients may request it in niche contexts. In such cases, these documents are typically requested:

📌 Sales Agreement – With explicit acceptance of revocable terms.

📌 Proforma Invoice – Describing trade value and delivery conditions.

📌 Company KYC & Registration Docs – For verification purposes.

📌 Buyer Bank Instruction – Confirming request for revocable format.

📌 Internal Justification – Why revocable LC is chosen over irrevocable LC.

🏦 Detailed Banks (Very Limited Availability for Revocable LCs)

Although the vast majority of international banks discourage this instrument, the following may issue Revocable LCs under strict compliance and internal validation:

(📩 Issuance only in highly specific cases—speak to our experts.)

🎯 Why Avoid a Revocable LC?

🛠️ Our 5-Step Protocol (If Revocable LC is Still Required)

1. Client submits formal justification

2. NNRV assesses risk & alternatives

3. We issue clear warnings & structure LC

4. Buyer bank confirms acceptance of revocable terms

5. Issuance via MT700 (Revocable clause clearly stated)

🔍 Revocable LC vs Other Instruments

Why Choose NNRV Trade Partners for LC Structuring?

🔒 We educate and protect clients from high-risk instruments
📄 Full LC Drafting Transparency – You see all terms upfront
📁 Legal Structuring Expertise – ICC-compliant teams
✅ Alternative LC Options Always Offered – Based on your goals
🌍 Global Advisory Across 40+ Countries

💲Important Fee Notice

Due to its risk profile, very few institutions support Revocable LCs. Fees depend on:

• Rationale and jurisdiction

• Bank appetite for non-binding trades

• Deal size and sector

🔹 Speak to our LC desk to explore safer alternatives.

🧠 Real Testimonials

• “We lost money due to a revoked LC—never again. Thanks to NNRV for showing us the difference.”

  – Rafael D., Paper Goods Exporter – Brazil

• “They helped us convert a risky revocable LC request into a secure confirmed LC.”

  – Sonia E., Textile Wholesaler – Spain

📚 What Makes Us Different?

✔️ Risk Prevention Approach
✔️ Transparent LC Structuring
✔️ Irrevocable-First Policy
✔️ Clear Client Education
✔️ Niche Trade Support When Needed

📌 From $100K to $5M+, we guide exporters away from avoidable risk

❓ Top 5 FAQ – Answered by Experts

1. Is a Revocable LC legal under UCP 600? Technically allowed but not standard. Highly discouraged.

2. Can the bank cancel even after shipment? Yes. That’s why it’s high risk.

3. Is it ever useful? Possibly in intra-group deals or B2B samples. Always risky.

4. What’s safer? An Irrevocable LC—even better with confirmation.

5. Can NNRV issue Revocable LCs? Yes, but only after signed risk disclosure and internal clearance.

🔗 Related Services

• Irrevocable LC
• Confirmed LC
• SBLC Advisory
• LC Structuring & Draft Review
• UCP 600 Training

📖 Strategic Blog Posts

• 5 Reasons to Avoid Revocable LCs in Modern Trade
• What Buyers & Sellers Must Know About LC Amendments
• Revocable vs Irrevocable LC: The Hidden Trap

🚀 Get Clarity on LC Structures Today

Avoid unexpected surprises. Speak to NNRV for risk-proof trade finance solutions.

📩 Book a Free Trade Security Consultation
☎️ Talk to an Expert | 🌍 100% Neutral Advice | ✅ SWIFT MT700 LC Drafting