An L/C was opened in the about value. Delivery terms are FOB. The l/c requires legalization of com/inv and c/o. com/inv. shows additional amount of $750 being legalization charges, and the total amount is within the about value of the L/C. negotiating bank certifies compliance of docts. with L/C terms. openning bank considered the aditional $750 as a discrepancy. The negotiating bank rejected the discrepancy on the basis of articles A10 and B10 of incoterms 2000.
May we have your attitude regarding this matter and if the said articles of incoterm 2000 are applicable .
regards.
additional charges shown on com/inv.
-
larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
additional charges shown on com/inv.
Both A10 & B10 apply in this case, but in fact both confirm the responsibility of the buyer to pay charges for legalisation. This of itself, does not answer the question as to discrepancy in the DC. However, as the DC calls for legalisation under the FOB term, the charges for this are payable by the buyer. One could argue that this charge is separately payable (outside of the DC) by the buyer, but as the DC brings together the requirement for legalisation and the FOB term, it is reasonable to expect the charge for legalisation to be included. Therefore my opinion is that there is no discrepancy.
Laurence
Laurence
additional charges shown on com/inv.
Without liability responsibility, my personal views are:
What Incoterms 2000 does or does not say is irrelevant to the compliance of the documents, as the credit is not subject to Incoterms 2000 but to UCP500. What matters is that the drawing is within the credit amount and the invoices simply show a total amount that is expressed to be 'FOB', the components that are expressed to make up this total being of no concern to the banker unless the credit expressly stipulates otherwise. (I believe this view is supported by the last two sentences of para 69 of v4 of the draft ISBP; we’ve still to get the final version!) Given that the credit actually stipulated that invoices are legalised I find the attitude of the issuing bank astonishing. I would also add that it is highly presumptuous of a 3rd party to assume that the buyer and seller have contracted on the standard contract terms contained in Incoterms 2000, unless there is a reference to Incoterms 2000 in the ‘goods description’ etc. Overall, this is definitely not a discrepancy based on the info given.
What Incoterms 2000 does or does not say is irrelevant to the compliance of the documents, as the credit is not subject to Incoterms 2000 but to UCP500. What matters is that the drawing is within the credit amount and the invoices simply show a total amount that is expressed to be 'FOB', the components that are expressed to make up this total being of no concern to the banker unless the credit expressly stipulates otherwise. (I believe this view is supported by the last two sentences of para 69 of v4 of the draft ISBP; we’ve still to get the final version!) Given that the credit actually stipulated that invoices are legalised I find the attitude of the issuing bank astonishing. I would also add that it is highly presumptuous of a 3rd party to assume that the buyer and seller have contracted on the standard contract terms contained in Incoterms 2000, unless there is a reference to Incoterms 2000 in the ‘goods description’ etc. Overall, this is definitely not a discrepancy based on the info given.
-
larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
additional charges shown on com/inv.
Jeremy,
please look to the right of this message & you will see a link to ISBP giving you the final version.
I hope this assists.
Laurence
please look to the right of this message & you will see a link to ISBP giving you the final version.
I hope this assists.
Laurence
additional charges shown on com/inv.
I agree that this is not discrepancy provided it is within FOB price on the invoice and complying with relevant ISBP requirement:
“Charges and costs must be included within the value shown against the stated trade term in the credit and invoice. Any charges and costs shown beyond this value are not allowed.”
Pavel Andrle
“Charges and costs must be included within the value shown against the stated trade term in the credit and invoice. Any charges and costs shown beyond this value are not allowed.”
Pavel Andrle