Daniel,
To my mind “drawing” under 39c refers to the “invoice amount’’ rather than the amount claimed.
Regards, Khalid
Para 64
Para 64
Khalid,
It might be so, but why did they not put that way in the first place then
Regards
Daniel
It might be so, but why did they not put that way in the first place then
Regards
Daniel
Para 64
Dear Daniel and Khalid,
In my opinion, the amount of a drawing is represented by the value of the goods shipped and invoiced under one and same presentation of docs. Art.39c of UCP500 applies to this value.
ISBP's 64 allows a deduction from this value. The deduction is made from the value of the drawing and the net amount claimed doesn't represents the value of the drawing, but only the amount claimed.
Regards,Bogdan
In my opinion, the amount of a drawing is represented by the value of the goods shipped and invoiced under one and same presentation of docs. Art.39c of UCP500 applies to this value.
ISBP's 64 allows a deduction from this value. The deduction is made from the value of the drawing and the net amount claimed doesn't represents the value of the drawing, but only the amount claimed.
Regards,Bogdan
-
KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Para 64
Dear All,
Interesting discussion. I have always hated article 39 – and now I surely know why
With the risk of confusing the discussion even more I offer my view on this:
Technically speaking I would think that article 39,c would apply to this case – even though I agree with Khalid that the “purpose” of the article is another one.
I think that “drawing” refers to the amount that is being drawn under the LC (!!). There may well be situations where there is a difference between the amount drawn and the invoice amount – like the scenario in article 37,b.
I also think that ISBP paragraph 64 does not “overrule” 39,c – so even though paragraph 64 is being “activated” by e.g. “a discount” the relevant UCP articles as well as LC stipulations should still be complied with.
So from a very strict reading I would consider the documents discrepant. That being said I think that the beneficiary (or perhaps the nominated bank) has been caught in the “LC trap”: It seems to me that full quantity of goods has been shipped – but the benni claims less than he is entitled to – and the applicant pays less than the value of the goods. So in any case I would be very reluctant to use this “technical discrepancy” to refuse the documents.
Best regards
Kim
Interesting discussion. I have always hated article 39 – and now I surely know why
With the risk of confusing the discussion even more I offer my view on this:
Technically speaking I would think that article 39,c would apply to this case – even though I agree with Khalid that the “purpose” of the article is another one.
I think that “drawing” refers to the amount that is being drawn under the LC (!!). There may well be situations where there is a difference between the amount drawn and the invoice amount – like the scenario in article 37,b.
I also think that ISBP paragraph 64 does not “overrule” 39,c – so even though paragraph 64 is being “activated” by e.g. “a discount” the relevant UCP articles as well as LC stipulations should still be complied with.
So from a very strict reading I would consider the documents discrepant. That being said I think that the beneficiary (or perhaps the nominated bank) has been caught in the “LC trap”: It seems to me that full quantity of goods has been shipped – but the benni claims less than he is entitled to – and the applicant pays less than the value of the goods. So in any case I would be very reluctant to use this “technical discrepancy” to refuse the documents.
Best regards
Kim
Para 64
Kim,
You do not add confusion, you sum the matter up. Technically speaking it is discrepant but in the real world I admit it is a cock-and-bull story.
Daniel
You do not add confusion, you sum the matter up. Technically speaking it is discrepant but in the real world I admit it is a cock-and-bull story.
Daniel
Para 64
Dear Kim,
look another example than the one discussed here:
goods description "pipes" (no quantity and no unit price stipulated under l/c). l/c amount is eur 1,000.00. partial shipment not allowed.
invoice shows:
pipes 10mt
total goods value eur 1,000.00
advance payment: eur 10.00
balance to be paid under l/c: eur 9,990.00.
.
it is or it isn't discrepancy ?
regards to all of you,
bogdan
look another example than the one discussed here:
goods description "pipes" (no quantity and no unit price stipulated under l/c). l/c amount is eur 1,000.00. partial shipment not allowed.
invoice shows:
pipes 10mt
total goods value eur 1,000.00
advance payment: eur 10.00
balance to be paid under l/c: eur 9,990.00.
.
it is or it isn't discrepancy ?
regards to all of you,
bogdan
Para 64
Kim,
I revert:
l/c amount is 1,000.00
advance paym is 100.00 and balance to be paid under l/c is 900.00.
sorry
bogdan.
I revert:
l/c amount is 1,000.00
advance paym is 100.00 and balance to be paid under l/c is 900.00.
sorry
bogdan.
Para 64
Dear All,
I think a reading of R367 may help in clarifying the interpretation/purpose of sub art 39(b).
Regards Khalid
I think a reading of R367 may help in clarifying the interpretation/purpose of sub art 39(b).
Regards Khalid
-
KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Para 64
Dear Khalid and Bogdan,
I know it is Friday – but I am not sure that I can follow you:
Bogdan: In the example that you mention. How much is shipped?
Khalid: Thanks for sharing. Is there an argument here that I have missed?
I would think that question “2” in R 367 would refer to situations like the one in question here – where the LC should allowed in specific that the amount vary in excess of the 5% mentioned in article 39.
As mentioned I always have problems with article 39, but my “rule of thumb” is:
A – Deals with “approx” meaning +/- whatever it refers to
B – You ship less and receive less and receive less – or ship more and receive more.
The variation refers to quantity and usually a bulk situation
C- You ship what you are to ship – but receive less.
The variation refers the amount and usually in a CIP/CIF situation where the amount includes an estimated freight amount/insurance premium.
Have a nice weekend.
Best regards
Kim
[edited 3/23/2007 3:06:07 PM]
I know it is Friday – but I am not sure that I can follow you:
Bogdan: In the example that you mention. How much is shipped?
Khalid: Thanks for sharing. Is there an argument here that I have missed?
I would think that question “2” in R 367 would refer to situations like the one in question here – where the LC should allowed in specific that the amount vary in excess of the 5% mentioned in article 39.
As mentioned I always have problems with article 39, but my “rule of thumb” is:
A – Deals with “approx” meaning +/- whatever it refers to
B – You ship less and receive less and receive less – or ship more and receive more.
The variation refers to quantity and usually a bulk situation
C- You ship what you are to ship – but receive less.
The variation refers the amount and usually in a CIP/CIF situation where the amount includes an estimated freight amount/insurance premium.
Have a nice weekend.
Best regards
Kim
[edited 3/23/2007 3:06:07 PM]