I hope that you can help me.
I have a straight forward sight LC.
The invoice is issued in accordance with the goods description and amount.
However also mentioned in the invoice is:
QUOTE
“Payment: L/C at sight
Due date: 17/11-06
After due date, interest x,x% / months to be charged”
UNQUOTE
In addition to that the invoice contains the following clause:
QUOTE
Very important
Original bill of entry from destination to be returned to (beneficiary) by DHL maximum 30 days after arrival date destination port. If not returned, your company turns into responsible for pay-out of export subsidy if original bill of entry is returned later than 30 days, extra costs of USD XXX/fcl/months will be charged your account.
This delivery is subject to EU rules on export refunds. Consequently, the buyer undertakes to indemnify (beneficiary) for any loss suffered in consequence of nonconsumption of the products in the country of destination
UNQUOTE
Would you accept this? If not then why?
Thanks in advance
Kim
Interest and export subsidy clause in invoice
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Interest and export subsidy clause in invoice
Kim,
There is NO UCP Article to back up the rejection. It is acceptable (except otherwise prohibited by the L/C).
Note: Please see Article 3 if there any dispute.
Regards,
Albert
There is NO UCP Article to back up the rejection. It is acceptable (except otherwise prohibited by the L/C).
Note: Please see Article 3 if there any dispute.
Regards,
Albert
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JudithAutié
- Posts: 195
- Joined: Fri Apr 05, 2019 5:20 pm
Interest and export subsidy clause in invoice
Hi
I agree with Albert. I could find nothing in the UCP (old or new)which would make such a clause a basis for refusal of documents.
However, I also wonder how the beneficiary thinks he would be able to collect under such a clause if the buyer didn't return the required certificate.
I also know that whenever our bank prefinanced such an export (or gave an export guarantee bond) we would require that the forwarders undertake to provide such a certificate through their agents at disport.
Regards
Judith
I agree with Albert. I could find nothing in the UCP (old or new)which would make such a clause a basis for refusal of documents.
However, I also wonder how the beneficiary thinks he would be able to collect under such a clause if the buyer didn't return the required certificate.
I also know that whenever our bank prefinanced such an export (or gave an export guarantee bond) we would require that the forwarders undertake to provide such a certificate through their agents at disport.
Regards
Judith
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Interest and export subsidy clause in invoice
Dear Albert and Judith,
Thanks a lot. Very helpful.
Best regards
Kim
Thanks a lot. Very helpful.
Best regards
Kim
Interest and export subsidy clause in invoice
Kim,
A bit late in the day (been away), but see absolutely no basis for refusal.
Regards, Jeremy
A bit late in the day (been away), but see absolutely no basis for refusal.
Regards, Jeremy
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Interest and export subsidy clause in invoice
The following e-mail just ticked in:
....
Dear Kim,
Hi, my name is Cristian Dobre from Romania and I have recently subscribed to DC-PRO, on a trial basis.
I've seen your latest post with regard to interest to be charged in case of payment delay under a documentary credit.
Being a visitor on a trial basis I cannot post the reply on discussion forum and I would like to advise you following:
I do not endorse the oppinons posted by others that documents is under LC protection and would not be discrepant.
This is because:
1. The beneficiary interferes with the issuing bank undertaking to pay a CERTAIN MAXIMUM amount provided documents are compliant.
(this is also supported by article 3 para b : A Beneficiary can in no case avail himself of the contractual relationships existing between the banks or between the Applicant and the Issuing Bank.
2. In addition, banks are not concerned of the contractual relationship between applicant and beneficiary and also deals with documents and not with contracts and others. Hence the beneficiary may avail himself of claiming an amount not known by the applicant and can police the applicant prices
This is also supported by Article 3:
a. Credits, by their nature, are separate transactions from the sales of other contract(s) on which they may be based and banks are in no way concerned with or bound by such contract(s), even if any reference whatsoever to such contract(s) is included in the Credit. Consequently, the undertaking of a bank to pay, accept and pay Draft(s) or negotiate and/or to fulfil any other obligation under the Credit, is not subject to claims or defences by the Applicant resulting from his relationships with the Issuing Bank or the Beneficiary.
3. Beneficiary interferes once again between the issuing bank, reimbursing bank and claiming bank as there is a clear date of claiming the proceeds stated within the credit (i.e 3 working days from confirming docs compliance) . Hence he unilaterally change the nature of the credit.
I would be glad if you can post my oppinion on DC PRO so we can see other opinions as well.
best regards
Cristian Dobre
....
Dear Kim,
Hi, my name is Cristian Dobre from Romania and I have recently subscribed to DC-PRO, on a trial basis.
I've seen your latest post with regard to interest to be charged in case of payment delay under a documentary credit.
Being a visitor on a trial basis I cannot post the reply on discussion forum and I would like to advise you following:
I do not endorse the oppinons posted by others that documents is under LC protection and would not be discrepant.
This is because:
1. The beneficiary interferes with the issuing bank undertaking to pay a CERTAIN MAXIMUM amount provided documents are compliant.
(this is also supported by article 3 para b : A Beneficiary can in no case avail himself of the contractual relationships existing between the banks or between the Applicant and the Issuing Bank.
2. In addition, banks are not concerned of the contractual relationship between applicant and beneficiary and also deals with documents and not with contracts and others. Hence the beneficiary may avail himself of claiming an amount not known by the applicant and can police the applicant prices
This is also supported by Article 3:
a. Credits, by their nature, are separate transactions from the sales of other contract(s) on which they may be based and banks are in no way concerned with or bound by such contract(s), even if any reference whatsoever to such contract(s) is included in the Credit. Consequently, the undertaking of a bank to pay, accept and pay Draft(s) or negotiate and/or to fulfil any other obligation under the Credit, is not subject to claims or defences by the Applicant resulting from his relationships with the Issuing Bank or the Beneficiary.
3. Beneficiary interferes once again between the issuing bank, reimbursing bank and claiming bank as there is a clear date of claiming the proceeds stated within the credit (i.e 3 working days from confirming docs compliance) . Hence he unilaterally change the nature of the credit.
I would be glad if you can post my oppinion on DC PRO so we can see other opinions as well.
best regards
Cristian Dobre
Interest and export subsidy clause in invoice
Dear Kim,
I see nobody reminded art.15 of UCP500:"banks assume no liability or responsibility for the....or for the general and/or particular conditions stipulated in the document(s) or superimposed thereon..".
I think this art.clarify the issue.
Regards,
Bogdan
I see nobody reminded art.15 of UCP500:"banks assume no liability or responsibility for the....or for the general and/or particular conditions stipulated in the document(s) or superimposed thereon..".
I think this art.clarify the issue.
Regards,
Bogdan
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PradeepT_old
- Posts: 39
- Joined: Fri Apr 05, 2019 5:25 pm
Interest and export subsidy clause in invoice
Dear Kim,
I agree with Bogdan and others. There is absolutely no reason for rejection of documents as there is nothing in UCP that supports such a stance. Article 15 is abundantly clear in this regard. Sorry, Article 3 (b) as quoted by Cristian Dobre does not apply for the very reason that it is quoted, i.e., "A Beneficiary can in no case avail himself of the contractual relationships existing between the banks or between the Applicant and the Issuing Bank" EVEN IF(and I would read and interpret it this way) he attempts to do so by inserting or "super-imposing" a clause, as mentioned by you, in the invoice.
Regards,
Pradeep Taneja
Bahrain
I agree with Bogdan and others. There is absolutely no reason for rejection of documents as there is nothing in UCP that supports such a stance. Article 15 is abundantly clear in this regard. Sorry, Article 3 (b) as quoted by Cristian Dobre does not apply for the very reason that it is quoted, i.e., "A Beneficiary can in no case avail himself of the contractual relationships existing between the banks or between the Applicant and the Issuing Bank" EVEN IF(and I would read and interpret it this way) he attempts to do so by inserting or "super-imposing" a clause, as mentioned by you, in the invoice.
Regards,
Pradeep Taneja
Bahrain