WHEN WORDS AND FIGURES DON’T AGREE: Is It a Discrepancy under UCP 600?

Intro

Differences between the amount in words and the amount in figures are among the most common issues encountered in document examination under letters of credit.

At first glance, such inconsistencies appear to be straightforward discrepancies.

However, practice shows that the answer is not always the same, particularly when a bill of exchange (draft) is involved.

While UCP 600 establishes the general rule on conflicting data, ISBP 821 provides specific examination guidance that may lead to a different conclusion for drafts.

The following Q&A clarifies how banks should treat this issue, distinguishing clearly between commercial invoices and drafts.

QUESTION

Dear Sir,

If the amount in words and figures differs in a commercial invoice and a bill of exchange, can we quote discrepancies regarding it?

Seek for your prompt response.

Regards,

Ranjana Pathak

TOC

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ANSWER

Dear Ranjana,

Thank you for your question.

As a general principle, UCP 600 sub-article 14(d) provides that data in a document must not conflict with data in that same document, any other stipulated document, or the credit.

Accordingly, a difference between the amount in words and the amount in figures normally constitutes a conflict of data and may give rise to a discrepancy.

However, for a bill of exchange (draft), ISBP 821 paragraph B14 provides specific guidance:

“The amount in words is to accurately reflect the amount in figures when both are shown, and indicate the currency as stated in the credit. When the amount in words and figures are in conflict, the amount in words is to be examined as the amount demanded.”

In line with this guidance, where the amount in words on the draft corresponds to the amount demanded under the credit, the draft need not be treated as discrepant, even if the amount in figures differs.

This approach is limited strictly to drafts.

For a commercial invoice, no equivalent provision exists in ISBP. Therefore, where the amount in words and figures on an invoice differ, this remains a conflict of data under UCP 600 article 14(d) and may be quoted as a discrepancy.

In summary:

• Bill of exchange (draft):

  No discrepancy, provided the amount in words matches the amount demanded under the credit (ISBP 821 B14).

• Commercial invoice:

  A discrepancy may be raised where the amount in words and figures conflict.

Best regards,

Mr. Old Man