ICC Digital Library Forum

Dear colleagues,
we would be very grateful for your opinion in the following matter:

we, as the advising bank, received from one of Spanish banks L/C with, among others, following terms:

- L/C available with the opening bank by payment
- L/C amount EUR 34.034,91
- percentage credit amt tolerance: 00/00 (field 39A)
- partial shipments: not allowed
- description of goods: 'cunas de madera'.

Beneficiary presented documents for EUR 33.589,71 and upon their receipt the opening bank sent us MT734 with the following discrepancy 'partial shipment not allowed'.

On our reply that the discrepancy is groundless in view of Art. 39B and par. 70 of ISBP, the opening bank sent us the following clarification of their position:
'...we confirm quoted discrepancy, so as per art. 39b of ucp500 'unless a credit stipulates that the quantity of the goods specified must not be exceeded or reduced...' the above mentioned l/c stipulated in field 39A (percentage credit amount tolerance): 00/00', so it was informed that credit amount did not accept any tolerance.'

In our opinion the opening bank misinterpret art.39B mixing two expressions: 'credit amount' and 'quantity of goods'. In the L/C there was not any stipulation regarding quantity of goods and if it was the opening bank's intention, they should have excluded art. 39B from L/C terms, otherwise this article remained in force. We rejected the discrepancy using the above arguments but, despite several tracers, have received neither their reply nor payment.

Thank you in advance for your comments.
Anna

Anna,

I think sub-Article 39(c) is actually more relevant here than 39(b). Neither you or the issuing bank can determine if a partial shipment even took place because the quantity of goods was not indicated in the LC. What you CAN determine, however, is that this is a partial DRAW, which is fine if it occurs within the conditions of 39(c). Up to 5% less is acceptable, and this draw falls within that parameter.

Thank you so much for your comment.
I agree with you as regards the more relevant sub-Article indicated by you, nevertheless it is obvious that the documents are issued in accordance with L/C and provisions of UCP500.

We have written to the opening bank so many times, eleven tracers remained unreplied till yesterday, cause today we received the following message
quote ' NEXT TO OUR MT734 DD. 061020 ABOUT DOCUMENTS FOR
EUR 33589,71 UNDER THE ABOVE MENTIONED L/C PLEASE
BE INFORMED THAT THE APPLICANT REFUSES THE PAYMENT
OF THE SAMES
DOCUMENTS AT YOUR DISPOSAL PENDING YOUR
INSTRUCTIONS
REGARDS unquote

As you can see the opening bank do not accept any arguments based on regulations and states 'applicant refuses the payment'.

Please, help us, what to do in such a situation?

If the ‘L/C [is] available with the opening bank’ why would you want to do anything? Surely this is the beneficiary’s problem, not yours?

Dear Anna,
Docs aren't discrepant and no partial shipment has been effected.You might send another mssg to issuing bank just quoting ucp500's art.39c and isbp's art.70
and also specifying that the quoted text is clear and as long as their l/c is subject to ucp500 they have to pay.Address your mssg to someone with a higher position in the issuing bank.
regards and good luck.
bogdan.

Field 39A has nothing to do with the quantity (see R365). So it is impossible to determine here that a partial shipment has been made (no quantity in the description) on the basis of the ampount of drawing. As it is impossible to deterrmine if a partial shipment has been made it is also impossible to raise a disrepancy.
Daniel

You might advise the issuing bank of the contents of this message board and you might consider requesting an ICC Opinion if they continue to refuse.