Meaning of 10/10 Tolerance

sunil · Post by **sunil** » Sat Sep 15, 2012 6:37 am

Dear experts

LC allows F39 as 10/10 and under F45a states "20MT Toulene "

how tolerance works on the above.

Regards
sunil

picant · Post by **picant** » Sat Sep 15, 2012 1:04 pm

Hi Pal,

field 39 refers only to the l/c amount, but I think art 30 b UCP is applicable as the quantity is not stated in number of packing unit or individual items.
So it is possible to have an availment of 110% and 19MT Toulene or 90% and 21TM Toulene.
Other comments very very appreciated
Ciao

ucp800 · Post by **ucp800** » Mon Sep 17, 2012 9:50 am

Dear Ciao,

The meaning of “10/10” in field 39A of the SWIFT MT700 allow the amount that can be drawn under the credit within 10 percent variance. I.e. “plus and/or minus 10 percent to be applied to the credit amount”

Referring ICC opinion R689,

Quote :
Conclusion
By the wording of the SWIFT handbook, the use of “00/00” in field 39A of the SWIFT MT700 has no effect on the amount that can be drawn under the credit. The completion of figures within this field are to denote the plus and/or minus percentage to be applied to the credit amount…….

Referring SWIFT CODE :
39A Percentage Credit
Amount Tolerance

DEFN: This field specifies the tolerance relative to the
documentary credit amount as a percentage plus
and/or minus that amount.

Quantity allowance is not related to this field.

By applying UCP 600 Art. 30b.
A tolerance not to exceed 5% more or 5% less than the quantity of the goods is allowed.

i.e. a tolerance of 1 MT only, plus and/or minus 5 percent to be applied to
the quantity in MT.

Regards,
ucp800

Navi · Post by **Navi** » Mon Sep 17, 2012 2:44 pm

Hi pals,
.
Lets change the case a bit.
LC amount: 100.000.-
39A: 10/10
45A: 100 MT xsubstance
price: 1000/MT
.
Can't we apply 10% tollerance to quantity of goods here although tolerance only mentioned for LC quantity?

abrar · Post by **abrar** » Mon Sep 17, 2012 10:19 pm

The LC value is subject to tolerance of 10%
The unit price is fixed, but by virtue of sub-art. 30 (b) the quantity is subject to a default tolerance of 5%.
Therefore, since the quantity has not been made subject to tolerance of 10%, the LC can only be effectively drawn up to $105,0000, and not up to $110,000

sunil · Post by **sunil** » Tue Sep 18, 2012 6:22 am

hi pals

if issuing bank in its MT700 says as below

quote:
Lets change the case a bit.
LC amount: 100.000.-
39A: 10/10
45A: 100 MT xsubstance
price: 1000/MT
unquote

then we need to ask a clarification to issuing bank its contradictory with art 30 b ? please confirm me whether i am in right path!

regards
sunil

Navi · Post by **Navi** » Tue Sep 18, 2012 1:46 pm

Hi Sunil
.
In my case, since unit price is fixed, in order us to apply tolerance for LC amount, we have to apply tolerance to quantity also. No other way and I am not sure whether we need clarification.
I remember an official opinion for similar case but cannot remember its number, stating that..... it is obvious that the issuer aim to apply tolerance for quantity also..... and consider a document complying. I hope I will find and share it or someone other remember it before.
.
Best regards

nesarul · Post by **nesarul** » Wed Sep 19, 2012 10:49 am

Dear Navi,
Probably you are trying to refer Official Opinion R293 – 1997.
.
But to me, there is an implied tolerance in quantity i.e. Plus minus 5 pct. on the other hand, according to LC, the tolerance amount is plus minus 10 pct.
.
Hence Maxinum permitted drawings amount would be:
(Quantity+ Quantity*5pct) * unit price = total amount.
.
Regards
Nesar

adonisjaved · Post by **adonisjaved** » Sun Jan 31, 2016 8:09 pm

Dear Sir,

i am little confused on 1 point please see the important clauses which i written below to understand the case , if there is any one who could inform me

The matter is

L/c in my Hand is by total amount 1,86,000 rs

39A:- Percentage Credit Amount Tolerance
00/00
43P:- Partial Shipments
Not Allowed
45A:- Description of Goods and /or Services
Supply of Gabro at Unit Price 31 Rs per ton

Now my Question is .

total Shipment Price became 1,798,000 rs because the total quantity was let suppose 60,000 ton @ 31 rs per ton, but actually loaded 58,000 @ 31 rs per ton, THIS minus TOLERANCE OF APPROX 3.3% will it accepted by the l/c issue bank or no.please do let me know thanks

nttung27 · Post by **nttung27** » Thu Oct 27, 2016 2:36 pm

adonisjaved wrote:Dear Sir,

i am little confused on 1 point please see the important clauses which i written below to understand the case , if there is any one who could inform me

The matter is

L/c in my Hand is by total amount 1,86,000 rs

39A:- Percentage Credit Amount Tolerance
00/00
43P:- Partial Shipments
Not Allowed
45A:- Description of Goods and /or Services
Supply of Gabro at Unit Price 31 Rs per ton

Now my Question is .

total Shipment Price became 1,798,000 rs because the total quantity was let suppose 60,000 ton @ 31 rs per ton, but actually loaded 58,000 @ 31 rs per ton, THIS minus TOLERANCE OF APPROX 3.3% will it accepted by the l/c issue bank or no.please do let me know thanks

The presented doc is considered to be accepted. UCP 600 Art 30 b says clear about this

A tolerance not to exceed 5% more or 5% less than the quantity of the goods is allowed, provided the credit does not state the quantity in terms of a stipulated number of packing units or individual items and the total amount of the drawings does not exceed the amount of the credit.

Meaning of 10/10 Tolerance

Meaning of 10/10 Tolerance

IMHO

allowance

What if unit price also mentioned?

Tolerance

tolerance

Cannot we apply 30a?

tolerance

39A Percentage Credit Amount Tolerance 00/00