A quick question. If the draft should be for 90% of the invoice value, does the invoice have to state the percentage payable under the l/c, or can it just show the full shipment value?
The invoice should show the actual amount being shipped. The draft should show the amount actually being drawn under the LC. This amount, in this particular instance, would be 90% of the invoice value (the balance 10% being probably retention money, payable later).
'A nominated bank acting on its nomination, a confirming bank, if any, or the issuing bank may accept a commercial invoice issued for an amount in excess of the amount permitted by the credit, and its decision will be binding upon all parties, provided the bank in question has not honoured or negotiated for an amount in excess of that permitted by the credit.'
Hence, as long as the negotiation is for USD 9,000 in this example, the transaction cnforms to the UCP.
Draft for 90%
The invoice should show the actual amount being shipped. The draft should show the amount actually being drawn under the LC. This amount, in this particular instance, would be 90% of the invoice value (the balance 10% being probably retention money, payable later).
Clarification please
hmmm.... the info you provide is quite confusing.
when u say 90% of the invoice value, which of the following case are you talking about?
1. LC value USD10,000
Invoice value USD 10,000
Draft drawn for: USD9,000
or
2. LC value USD10,000
Invoice value USD9,000
Draft drawn for: USD9,000
Clarification please
L/C Value USD 9,000
Invoice Value USD 10,000
Draft Drawn for : USD 9,000
Invoice in excess of LC value
Hi LCGIRL,
Let me quote article 18(b) of UCP 600:
'A nominated bank acting on its nomination, a confirming bank, if any, or the issuing bank may accept a commercial invoice issued for an amount in excess of the amount permitted by the credit, and its decision will be binding upon all parties, provided the bank in question has not honoured or negotiated for an amount in excess of that permitted by the credit.'
Hence, as long as the negotiation is for USD 9,000 in this example, the transaction cnforms to the UCP.
Hi!
I think, if L/C not required, the invoice can show the full shipment value, no need to state the percentage payable under the L/C
No need if not required
Hi !
If L/C doesn't require, it is no need
Hope it may help!
V.V.