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Overdrawn ?

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Fri, 05/14/2010 - 09:36
kktan1119
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Hi, 

i have a question here,OIL LC, LC ISSUED AMT IS USD10 MILLION, PRICE ESCALATION CLAUSED not AVAILABLE, PROVISIONAL INVOICE IS ALLOWED. NO TOLERANCE ON CREDIT AMT.

FIRST NEGO UNDER PROVISIONAL INVOICE FOR USD9.5 MIO

FINAL INVOICE FOR USD1MILLION

IS THIS CONSIDER OVERDRAWN FOR USD0.5MILLION ? OR BECAUSE PROVIONAL INVOICE IS ALLOWED THEREFORE ALTHOUGH TOTAL FINAL INVOICE + PROVISIONAL INVOICE > USD10MILLION IS ACCEPTABLE ?

Thanks in advance for your help.

.

Regards

Scorpion

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Sun, 09/05/2010 - 11:03
#1
gulgi
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Thu, 08/19/2010 - 00:57
#2
Champ
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Fri, 05/14/2010 - 16:19
#3
Abrar
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Overdrawn LC

Absence a tolerance on LC value, it most certainly is a discrepancy.

Where the final invoice exceeds the provisional invoice value, the difference would usually be paid outside the LC.

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Fri, 05/14/2010 - 17:15
#4
kktan1119
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overdrawn

hi abrar,

Thanks for your advise, but for this case, LC did indicate that the difference between provisional and final invoice will be settled within LC.  So what is your view on this case ?

.

Regards

Scorpion.

 

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Sun, 05/16/2010 - 08:00
#5
Abrar
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overdrawn LC

If the difference was to be settled within the LC value, I would still maintain that the normal rules still apply:

1. Difference to be paid against a documentary submission of the final invoice

2. Presentation to be made within expiry (and possibly within latest presentation period)

3. Absent a tolerance provision. LC cannot be overdrawn

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Fri, 05/14/2010 - 21:30
#6
bob_exports
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overdrawn

In the absence of any tolerance allowed, or instruction that the L/C may be overdrawn by an amount up to the difference between the provisional and final invoice, then it is still a discrepancy.

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Sun, 05/16/2010 - 09:12
#7
kktan1119
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OVERDRAWN

Hi, 

i have a question here,OIL LC, LC ISSUED AMT IS USD10 MILLION, PRICE
ESCALATION CLAUSED-INCREASE OR DECREASE IS ALLOWED, PROVISIONAL INVOICE IS ALLOWED. TOLERANCE +/- 10 % IS ALLOWED.

COMMECIAL INVOICE PRESENTED FOR NEGOTIATION FOR USD12 MIO. IS THIS CONSIDER AMT OVERDRAWN FOR USD1MIO OR THE PRICE ESCALATION CLAUSE WILL COVER THE OVERDRAWN ?

.

rEGARDS

SCORPION

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Sun, 05/16/2010 - 09:51
#8
Abrar
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Tolerance

In this case, the provision of the price escalation/de-escalatiion clause is limited by the LC tolerance of +/- 10%. Therefore, the LC would still be overdrawn.

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Mon, 05/17/2010 - 09:27
#9
kktan1119
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overdrawn ?

Thanks Abrar !!

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