Penalty for late shipment

[hongvan]

I will very happy if someone can help me in following case:
Our bank have an export LC with stating the penalty clause: "IF B/L DATE IS LATER THAN THE LATEST SHIPPING DATE, DELAY PENALTY SHOULD BE DEDUCTED FROM GROSS INVOICE VALUE BASED ON 0.1 PCI PER DAY"
We suppose that the shipment was late by 7 days.
The invoices submitted show a deduction of the delay penalty amount for 7 days.
Since the delay penalty amount has been deducted from the gross invoice amount
-> Should we still quote the discrepancy “LATE SHIPMENT”?
Thanks so much!

[abrar]

Yes. The discrepancy remains unaltered and valid, and would require the bank(s) to examine for compliance under Art 14, and thereafter, follow the due process articulated under Art 16. The beneficiary however still suffers the financial penalty of late shipment by deduction of the charge on the invoice.

This means that in practice, the beneficiary has lost protection of the LC by virtue of a discrepant presentation, and will require waiver to be granted before payment is made. Moreover, as and when payment is authorised, they will in any case receive less than the face value of the invoice, whether the deduction is already shown onthe invoice, or whether the issuing bank deducts the amount from its payment authorisation.

[loankim]

Hi Van,

u can raise that discrepany, all is in yr hand!
welcome to our forum !


Rgds,

[hongvan]

Thank you, Ms Kim and Abrar, for yr support!

HongVan