Letter of Credit Forum

Hi

I would like to draw your kind attention as when tolerance of -5% in amount of drawing is apply

This Tolerance level applies provided that;

1. If the credit stipulates the quantity of the goods such quantity of goods is shipped in full.
2. If the credit stipulates a unit price, such price is not reduced.

This what is called ancillary charges which is regard to insurance costs and freight charges and has noting to do with the quantity of goods.

For example , when the Importer agrees with the exporter to purshase goods CIF (at named destination) the price of goods is include the insurance cost and freight charges to the named destination which quite unknown to the exporter at the time of greement because the prices may changes at the time of shipment.

 If the price at the time of shipment reduced the exporter will reduce his commercial invoice of this reducation noting that the Exporter is not obliged to do so but he is doing this in order to keep the Importer as a customer.

Regards

Mohammed Imam

mohdimam@yahoo.com

Hi Friend,

Here a comment of G. Collyer

One of the purposes of sub-article 30 (c) is to
cover situations where freight and/or insurance may be estimated values
and the actuals are less than those agreed at the time of establishment
of the credit. The main criteria is that all the goods have been
shipped.

Other thoughts appreciated

Ciao