Field 39A Percentage Credit Amount Tolerance in Letter of Credit (LC)

Field 39A is the percentage credit amount tolerance mentioned in the MT700 SWIFT message of the Documentary Letter of Credit.

The tolerance is for both positive and negative amount or quantity

This is an optional field.

First, let’s check what UCP600 mentioned about this clause:

This tolerance can be for both quantity and credit amount. When the quantity change than the total amount also changed.

Tolerance 1: +10%

Tolerance 2: -10%

Let’s have an example:

LC opened for 100MT steel of 500 USD/MT. So the total value is 50,000 USD.

The tolerance mentioned in 39A is 10%. Partial shipment: allowed.

Scenario 1: The seller makes the shipment of 90MT steel in a single lot. The invoice value is now 45,000 USD.

This is within 10% tolerance. The bank will provide no discrepancy.

Scenario 2: The seller makes the shipment of 110MT steel in a single lot. .The invoice value is now 55,000 USD.

This is within 10% tolerance. The bank will provide no discrepancy.

Scenario 3: The seller makes the shipment of 85MT steel in a single lot. The invoice value is now 42,500 USD.

This is out of the 10% tolerance mentioned. The bank will provide discrepancy.

In that case, the LC needs to be amended.

Note that the tolerance issue is also validated by the customs server. If out our tolerance, then LC needs to be amended, otherwise, the customs processing will also halt. 

As I mentioned earlier, this is an optional field. In so many cases you will not find this Field 39 in the letter of credit.

In that case, there’s is no tolerance and the seller has to make shipment as per quantity and amount mentioned in the LC.

Here you can see above, there’s no field F39A and F39C. If the seller agrees, then you can also issue this LC.

Another way is to mention tolerance in the F47A (Additional Conditions) in documentary credit.

It looks like this:

If you mentioned tolerance in F47A (Additional conditions) then you can omit F39A and F39C.

You might have noticed another Field that is F39C (Additional Amount covered). This field describes the tolerance for any additional amount such as insurance, freight, etc. Also, it specifies the tolerance is for quantity and amount.

I hope you have a clear understanding of F39A (Percentage credit amount tolerance) in the Documentary letter of credit.

If you face any other experience on this, you can also share in comment or email to us. We will include that in this article. That will be helpful for our readers.