AbstractMuch has changed in the four decades since United City Merchants v Royal Bank of Canada, in which Lord Diplock established the fraud exception in transactions financed by documentary credit. In particular, the introduction of the UCP 600, case law on nullity documents and amendment to the American fraud exception justify a reconsideration of both the policy arguments underpinning Lord Diplock's rule and the fate of documents known to be forged or null at the time of presentation. Accordingly, two arguments are made in this paper. First, a consideration of the broader exception in the US should prompt a modern Supreme Court to re-examine his Lordship's insistence that a narrow exception was required to preserve the efficiency of the credit mechanism. In addition, it further argues that banks should be entitled to reject known nullities and forgeries as non-complying. This argument would reinstate the doctrine of strict compliance, which was overlooked in United City Merchants, and is based on the clarified definitions in the UCP 600, more recent judicial consideration of nullities and the existence of the ICC's International Maritime Bureau.