Sunday, November 06, 2016

Decoding UCP Article 30 on LC amount, quantity and unit price

Decoding UCP Article 30 on LC amount, quantity and unit price [1]
Rupnarayan Bose[2]

Article 30, UCP 600[3]
We are aware that if a beneficiary is to get his documents negotiated under a letter of credit, he must conform strictly to the terms of the credit. Compliance with the terms includes, among others, compliance with amount and quantity of goods being shipped. Under certain conditions, the UCP permits variations in both the amount and the quantity. These conditions are spelt out in Article 30 of UCP 600.
This article addresses the issues regarding variations in the quantity of the goods shipped, the amount of presentation under documentary credits vis-à-vis the amount and quantity for which a particular credit may have been issued. These are critical issues for the beneficiary, as also for a bank that issues a credit and later has to examine the documents presented for compliance. This is primarily because the exchange control regulations of some countries do not permit import of goods for values that exceed (even by a small margin) the amount stated in the credit. On his part, the buyer too may not wish to accept excess drawing or excess shipment. It is, therefore, necessary to understand the provisions of Article 30 that permit variations, and the circumstances under which it does so. Do note carefully the instances where 10% and 5% variations apply.
Variation in Amount, Quantity or Unit Price
Article 30(a) stipulates that (contd....)

[This article is continued in the book 'Beyond Trade Finance', published on 13-Apr-2021 by Notion Press, and available at 




[1] First published in LCM-Trade Services Update, Volume 15, Issue 1, January - February 2013.
[3] This interpretation is my based on my understanding of UCP, Article 30. Error, if any, may please be pointed out for rectification.]

1 comment:

  1. Thank you for the wonderful interpretation . Very helpful .
    - a novice banker

    ReplyDelete