Quantity Tolerance in Field 39C – Is It Valid?

✅Question

Dear Mr. Old Man,

Hope this email finds you well.

Would like to seek your opinion regarding the below scenario.

• LC Field 45A contains three goods and the quantities are specified in pieces (pcs).

• LC specifies a 10 pct tolerance in Field 39A.

• LC Field 39C states: “Variance in Quantity of Screws shipped”.

• LC Field 47A does not specify any quantity tolerance.

One of the goods is overshipped.

The LC quantity is 45,000 pcs, whereas the shipped quantity is 45,200 pcs.

Does the wording in Field 39C establish a quantity tolerance? If so, what is the percentage?

Is the overshipment a valid discrepancy, or should a quantity tolerance be applied?

Regards,

Priya
______

✅Answer

Dear Priya,

Thank you for your question.

In my opinion, a quantity tolerance may be stated in Field 39C. The SWIFT MT700 format does not contain a specific field dedicated to quantity tolerance. Therefore, whether the quantity tolerance appears in Field 45A (Description of Goods and/or Services), Field 47A (Additional Conditions), or even Field 39C (Additional Amounts Covered), it is acceptable and forms part of the credit terms.

However, the wording must clearly specify the extent of the permitted variance. Examples would be:

• Quantity 10 pct more or less allowed; or

• Shipment quantity may vary by ±10%.

In the scenario presented, the wording in Field 39C is stated only as:

“Variance in Quantity of Screws shipped”

While this wording suggests that a quantity variance may be contemplated, it does not specify the permissible percentage or extent of the variance. Therefore, by itself, it does not establish a measurable quantity tolerance.

Field 39A specifies a 10 pct tolerance. Under SWIFT practice, Field 39A is generally intended for tolerance in the credit amount. The wording in Field 39C does not clearly indicate that the 10 pct tolerance in Field 39A is also intended to apply to quantity.

Accordingly, I would be reluctant to interpret the wording “Variance in Quantity of Screws shipped” as establishing a 10% quantity tolerance for the goods.

My answer would therefore be:

• Yes, a quantity tolerance may validly be stated in Field 39C.

• No, the wording “Variance in Quantity of Screws shipped” does not, by itself, clearly establish a quantity tolerance or its extent.

• Therefore, the shipment of 45,200 pcs against an LC quantity of 45,000 pcs may constitute an overshipment discrepancy because no specific quantity tolerance has been stated.

As a drafting recommendation, quantity tolerances should preferably be stated in Field 45A (Description of Goods and/or Services) or Field 47A (Additional Conditions), where there is less risk of ambiguity. For example:

• Quantity: 45,000 pcs ±10%; or

• Quantity 10 pct more or less allowed.

Such wording leaves no doubt that the tolerance applies to quantity and avoids differing interpretations by banks examining documents.

Kind regards,

Mr. Old Man