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....)
[3]
This interpretation is my based on my understanding of UCP, Article 30. Error,
if any, may please be pointed out for rectification.]
Thank you for the wonderful interpretation . Very helpful .
ReplyDelete- a novice banker