Under UCP600 guideline, there shouldn't be any provisional invoice or pro forma invoice in documentary credit presentation. The commodity unit pricing is fluctuating at point of documentary presentation and we (my company being the beneficiary) can't wait for the final price to finalize before making documentary presentation to nominated bank as that would mean having to wait/exceed the agreed payment term of BL + 30. In short, final price finalize only after BL + 30.
As such, would it be acceptable to submit a provisional invoice by invoking article 2 under UCP600? Documentary credit field 45 to explicitly mention provisional invoice allowed.
Final Price Finalize Only After BL + 30 And Provisional Invoice
-
CDCS2015
- Posts: 27
- Joined: Sun May 17, 2015 12:15 pm
- First Name: Alex
- Last Name: Soon
- Organization: Oil MNC
- Filter: Two Plus Two =: 4
- Location: Singapore
-
picant
- Posts: 2026
- Joined: Wed Aug 20, 2008 1:49 pm
Provisional invoice
Hi Pal,
one question? How much do you get with provisional invoice from l/c?
The value of the provisional invoice, I think:
Difference, in any, positive or negative will be settled a part.
So, you may present an invoice, and in the underlying contract stated that difference will be regulated etc.
I think that UCP 600 wanted to point out that the invoice must be for a sale and not for an offer.
Other comments appreciated
Ciao
one question? How much do you get with provisional invoice from l/c?
The value of the provisional invoice, I think:
Difference, in any, positive or negative will be settled a part.
So, you may present an invoice, and in the underlying contract stated that difference will be regulated etc.
I think that UCP 600 wanted to point out that the invoice must be for a sale and not for an offer.
Other comments appreciated
Ciao
-
CDCS2015
- Posts: 27
- Joined: Sun May 17, 2015 12:15 pm
- First Name: Alex
- Last Name: Soon
- Organization: Oil MNC
- Filter: Two Plus Two =: 4
- Location: Singapore
Hi picant:
Very sorry for the late reply. The deal is over and the nominated bank, confirming bank and issuing bank had no issue with it. We received the provisional invoice payment and then claimed the differences (final invoice value > provisional invoice value).
And yes, the difference is settled outside the DLC as the DLC did not provide for the mechanism to effect refund or claim. One side thought i had was to include the necessary wordings inside the DLC to provide for any claims or refund once final price is released to avoid exposure.
Very sorry for the late reply. The deal is over and the nominated bank, confirming bank and issuing bank had no issue with it. We received the provisional invoice payment and then claimed the differences (final invoice value > provisional invoice value).
And yes, the difference is settled outside the DLC as the DLC did not provide for the mechanism to effect refund or claim. One side thought i had was to include the necessary wordings inside the DLC to provide for any claims or refund once final price is released to avoid exposure.