draft value

[POLTERD.]

hi there.
i do have a little issue:
lissuing bank instructed their amendment comm.to be deducted from invoice value and invoice to evidence so.
bnf presented invoice as per l/c indicating goods value,amndmt comm to be deducted and net value.
how the draft must be issue ? for goods value or for net value of the invoice ? (pls note l/c states draft to be issued for 100% invoice value).
best wishes,
bogdan.

[NigelHolt]

Net value of invoice, i.e. the amount being drawn.

[KimChristensen]

Dear Bogdan,

If someone ever said that there were no innovations within the LC area he or she should just look at all those strange texts that are “invented” and added to the LCs – apparently all the time

This is one of them! To me it seems very odd to “combine” the invoice amount with the banks amendment charges – and I just wonder what good explanation that lies behind this?

I would expect however that the amount drawn under the LC would be the net amount i.e. goods value less amendment commission (??), and it would seem natural for the draft to reflect that. The fact that the LC states that “drafts to be issued for 100% invoice value” supports this.

I would assume that the applicant is deducted the full goods amount, but only have an invoice showing the net amount (hmm). That is however “outside” the LC.

Best regards
Kim

[POLTERD.]

Thank you for your opinions.
I have to say that this kind of inventions never stop amusing me,even if my smile is a little bitter.
bogdan

[RolandLeupi]

There is absolutely no limit in stupidity. How can a bank request to indicate charges on an invoice ? What have charges to do with a price ?
No, I am sorry but this is not anymore documentary credit and such request should be drastically rejected.
Roland