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Tolerance of Amount Drawn |
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Question from D.C.Y.:Dear Mr. Lee,
As a premium member, I have again to seek your guidance and expert opinion on this issue, primarily to have a better understanding of UCP Rules :-
Being responsible for the preparation of LC documents, I have received an L/C covering shipment of palm oil. The credit amount was US$833,500.00 with 2 % tolerance more or less and quantity was for 1200 M/Tons at US$694.58 per M/Ton. This L/C was to be confirmed. The confirming bank indicated that the credit amount has to be amended to US$833,496.00(the exact value of 1200 X US$694.58)before it is prepared to confirm the L/C.
As my "SIFU" I am asking for your comments to my argument that the credit amount is perfectly in order under UCP Article 30c as the US$4.00 difference is within the 2 percent tolerance permitted under the L/C terms. I do not understand why the bank would like the credit amount to be amended to US$833,496.00 . I hope you can throw some light on the stand taken by the bank.
As always, I look forward to your valuable comments and views.
Regards
D.C.Y.
1st Response from T.O. Lee:Dear Mr. Y.,
Your query involves a lot of different scenarios. I need to see the real wording in the LC in order to be able to provide a precise answer.
Please read ...
Further Query from D.C.Y.:Dear Mr.Lee,
Thank you so much for your prompt reply. As requested, I have provided below the exact wording in the L/C :-
Field 32B DC Amount: US$833,500.00
Field 39A Pct Cr Amt tolerance: 02/02
Field 45A Goods: 1200 MT crude palm oil at US$694.58 per MT
Field 47A: 2 percent more or less on quantity and value acceptableWith the above pertinent details, I hope you can let me have your learned views on the issue raised below.
Warmest Regards
D.C.Y.
2nd Response from T.O. Lee:Dear Mr. Y.,
The unit price ...
T. O.