Risks to beneficiary under Letter of Credit

1.Failure to comply with Letter of credit terms:
Letter of credit is a safeguard for payment to the beneficiary.
The main risk to beneficiary is that the negotiating bank or the issuing bank will refuse payment because the documents do not comply with LC terms. The beneficiary should read the LC carefully and request for amendment if any terms appear conflicting or the beneficiary would find it difficult to satisfy any of those conditions.

2.Failure of payment from issuing bank:
If the LC is irrevocable but unconfirmed the beneficiary faces the risk of issuing bank's failure and country risk related to the country issuing bank belongs to.
To safeguard such a risk, the beneficiary can obtain confirmation of LC by a bank in its own country.