DC Variance On Transferable DC's
DC Variance On Transferable DC's
Can the First Beneficiary change the variance of the DC amount and quantity. Example the master DC calls for $xxxx with a variance of +/- 10 pct. and the First Beneficiary request to Transfer DC for $xxxx with no variance or reduce the variance to +/- 5 pct. If so where is it covered under UCP 500 under Art. 48.
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JudithAutié
- Posts: 195
- Joined: Fri Apr 05, 2019 5:20 pm
DC Variance On Transferable DC's
In my opinion and without responsibility
Although Art 48 does not specifically cover this point, I consider that reducing in the transferred credit the tolerance allowed under the original credit terms could come under Paragraph H which allows reduction of the amount of the credit.
One of the basic ideas behind the transfer of a credit is that requirements of the original terms contained in paragraph H can be reduced or curtailed, so I would see no problem in reducing such tolerances as far as the amount / quantity is concerned.
However I would be interested in seeing other member’s view on a subsidiary question :
Would reducing the tolerance as far as quality is concerned be acceptable ?
For example, if a credit allowed for a maximum of 5 percent of broken grains, would a transfer allowing only 4 percent brokens be acceptable?
Judith
Although Art 48 does not specifically cover this point, I consider that reducing in the transferred credit the tolerance allowed under the original credit terms could come under Paragraph H which allows reduction of the amount of the credit.
One of the basic ideas behind the transfer of a credit is that requirements of the original terms contained in paragraph H can be reduced or curtailed, so I would see no problem in reducing such tolerances as far as the amount / quantity is concerned.
However I would be interested in seeing other member’s view on a subsidiary question :
Would reducing the tolerance as far as quality is concerned be acceptable ?
For example, if a credit allowed for a maximum of 5 percent of broken grains, would a transfer allowing only 4 percent brokens be acceptable?
Judith
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PGauntlett
- Posts: 153
- Joined: Fri Apr 05, 2019 5:25 pm
DC Variance On Transferable DC's
I would agree that Art 48h allows this change as it's clearly a reduction in the amount of the l/c.
Judith, as regards your second point, such a change is obviously outside UCP and, even though there appears to be no risk in accepting beneficiary's request, I would prefer not to do so.
Phil
Judith, as regards your second point, such a change is obviously outside UCP and, even though there appears to be no risk in accepting beneficiary's request, I would prefer not to do so.
Phil
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
DC Variance On Transferable DC's
Essentially Art 48 h deals with the curtailment of value and dates. It does not allow for variation of goods descriptions or quantities. Thus Judith'd example of reduction from 5 to 4 % broken grains would not be acceptable.
Regarding % variation, this is not specifically covered in the UCP because it is covered by default - the only changes allowed are relating to value, dates and bene name. Therefore no other changes are allowed.
Laurence
Regarding % variation, this is not specifically covered in the UCP because it is covered by default - the only changes allowed are relating to value, dates and bene name. Therefore no other changes are allowed.
Laurence