sub-Art 30(c) / ISBP para 60

[NigelHolt]

I shall be most grateful for your views personally regarding the interplay of ISBP681 para 60 and UCP600 sub-Art. 30(c).

Say:

1. one has a credit for GBP100,000.00 where:
A. partial shipments are not allowed.
B. a specific tolerance is not stipulated.
C. an expression referred to in sub-Article 30(a) is not used.
D. a unit price is not stated.
E. no deduction nor discount is required to be shown in documents presented.

2. documents for GBP90k are presented under the credit and the invoice shows a 10% deduction in respect of a discount.

Would the presentation be discrepant by reason of the transgression of UCP600 sub-Art. 30(c)? I look forward to hearing your views and thank you in advance for letting me have them.

[asamaha]

Hi Jeremy,

I would refuse the documents as I think that the net drawing amount i.e. after the 10 pct deduction should be within the range of GBP 95000 to 100000.

Regards
Antoine

[GlennRansier_]

Hi Jeremy,
The key is that a "full shipment" had to have occurred and I would have the beneficiary attest to this on their invoice. As ISBP para. 60 reflects, a discount not stated in a LC may still be accommodated.
Best Regards

[DanielD]

Jeremy,

The invoice shows a discount not stated in the credit. According to par. 60 in fine no problem and no issue.
Par. 66 states that if no quantity is stated in the credit, the invoice will be considered to cover the full quantity. I assume no quantity is specified in the credit, otherwise you would not ask. Therefore, the presentation does not comply with par. 66 and art 30c in connection with the 5%.
Regards
Daniel

[NigelHolt]

Thanks Antoine, Glenn and Daniel.

My intention is that as part shipments are not allowed the documents presented have to be regarded as a full shipment.

Anyway, for the avoidance of doubt, let us assume that from the invoice details it is apparent a full shipment has taken place.

[DanielD]

If a full shipment has taken place, the presentation is discrepant.
Regards
Daniel

[asamaha]

Hi Again,
A credit is supposed to be issued for the NET amount to be drawn by the beneficiary and the NET amount of invoice is supposed to be the drawing amount, unless otherwise stated in the credit. Therefore, any discount shown on the invoice, whether required in the credit or not, does not reduce the credit amount for same.
Regards
Antoine

[GlennRansier_]

There should be no discrepancy because the beneficiary provided a discount. ISBP Article 60 protects beneficiary's for claiming less and in this case we have confirmed that a full shipment occurred. Imagine going to court and telling the judge: "I refused payment because the beneficiary shipped the goods but offered a discount".
Jemery, generally, in the situation described, I seek the beneficiary's written confirmation where it is not ironclad that the full shipment was effected and assure that the discount/rebate is the only amount that will be claimed against the LC.

[DanielD]

Glenn,
A credit is issued for 100.--
If the net invoice value (as Antoine puts it) and the drawing is 50.--. it does not work, even if a judge is puzzled by the fact.
The CD should have been opened for 50 and the invoice could have stated goods 100 less discount 50.-net invoice value 50.-- and drawing made for 50.--
I assume that full shipment was made.
Regards
Daniel

[GlennRansier_]

Daniel,
LC issued for $100 covering 100 chairs @ $1.00 per chair no mention of anything else.
Invoice received:
Shipped 100 chairs @ $1.00 per chair total invoice value $100.00, less 30.00 discount amount claimed $70.00.

What is the discrepancy?