Field 47A (Additional Conditions) in Letter of Credit (L/C)

Field 47A in LC

Last updated on June 3rd, 2021 at 05:13 am

This is an optional field in the MT700 type SWIFT message of a documentary Letter of Credit (L/C).

These are the conditions that are added by the buyer/applicant or the issuing bank providing further instructions to comply.

Additional conditions include the information that should be mentioned in commercial documents (commercial invoice, packing list), email or fax instruction, signature requirement, discrepancy handling charge, etc.)

The beneficiary must make a presentation by confirming these additional conditions.

Let’s bring one example UPAS L/C for our analysis

Field 47A (Additional Conditions)

clause 1 in field 47A

1 APPLICANT DETAILS

Here the detailed applicant address is written. In the case of including applicant detail in documents, these addresses should be followed. In F50 (Applicant) only the Applicant name is written but due to space limitation detailed address cannot be mentioned, so here the detail address is written.

clause 2 in field 47A

2 COMMERCIAL INVOICES, BILL OF LADING, CERTIFICATE OF ORIGIN, AND PACKING LIST MUST INDICATE THE FOLLOWING

A) LCAF NO

B) IRC NO

C) TAX IDENTIFICATION NO

D) BIN

E) H.S. CODE

F) APPLICANT BANK BIN

These are the norms that should be included in CI, BL, COO, and PL.

IRC is the Import Registration Certificate

BIN is the Business Identification no.

clause 3 in field 47A

3 DRAFTS AND ALL DOCUMENTS UNDER THIS CREDIT MUST QUOTE THIS CREDIT NO. WITH DATE

Letter of Credit (L/C) number and opening date should be mentioned in the draft (Bill of Exchange) and other documents.

clause 4 in field 47A

4 EACH PRESENTATION OF DOCUMENTS CONTAINING DISCREPANCY WILL INCUR A SPECIAL HANDLING CHARGE FOR USD 75.00 AND ANY OTHER ASSOCIATED CHARGES WILL BE DEDUCTED FROM THE PROCEEDS.

The discrepancy charge which shall be deducted in applicable cases is mentioned. Sometimes related cable charge is also mentioned for transparency.

clause 5 and 5 in field 47A

5 DOCUMENTS EVIDENCING SHIPMENT MUST NOT BE ISSUED EARLIER THAN THIS CREDIT

The seller cannot make shipment and prepare documents before the L/C opening. This is a standard practice in commercial L/C. So, the exporter can make shipment only after the LC is opened.

6 ALL DOCUMENTS MUST BE PRESENTED IN ENGLISH LANGUAGE

This says that the documents must contain the English language, no local language is applicable. This is an international business between cross borders so English is the common language to be followed by both the applicant and the beneficiary.

clause 7 in field 47A

7 INVOICE MUST CLEARLY SHOW THE PRICE OF THE GOODS AND FREIGHT CHARGE SEPARATELY OR A SEPARATE FREIGHT CERTIFICATE FROM BENEFICIARY MUST ACCOMPANY THE DOCUMENTS

This is the rule of Bangladesh central bank (Bangladesh Bank) that the goods price and freight charge should be mentioned separately in commercial invoice.

According to that information, they prepare the import data. Two common forms are being used by the bank IMP Form and T/M Form and filled up by the applicant to report to Bangladesh bank.

clause 8 in field 47A

8 THE APPLICANT BANK BIN  AND APPLICANT’S VAT NO MUST BE MENTIONED IN ALL DOCUMENTS

This indicates that the applicant’s bank’s VAT and BIN number should be mentioned in all documents.

clause 9 in field 47A

9 PLUS/MINUS 10 PERCENT TOLERANCE IN BOTH AMOUNT AND QUALITY PER SIZE ARE ACCEPTABLE, BUT TOTAL AMOUNT AND QUANTITY SHOULD BE WITHIN THE LC TOLERANCE

For some material (here Steel) the tolerance is applicable. Ten percent tolerance for quantity and the total invoice value will be agreed upon by the applicant. While submitting a commercial invoice the value cannot exceed 10% more than the L/C value.

There’s another optional field is in LC which F39A (Percentage Credit Amount Tolerance). If you specific tolerance in F39A then, clause F47(9) is not required.

clause 10 in field 47A

10 DESPITE THE TENOR OF THIS CREDIT (180 DAYS FROM THE DATE OF NEGOTIATION) THE APPLICANT BANK, OFFSHORE BANKING UNIT, WILL REMIT PROCEEDS AT SIGHT UPON PRESENTATION OF CREDIT COMPLIED DOCUMENTS

Actually, this example is based on UPAS L/C (Usance Payable At Sight). As per UPAS LC rules, the beneficiary will get payment on sight basis though the applicant will pay after 180 days to the applicant bank hence the Financing bank (OBU of the applicant bank).

Read also:  Field 50 Applicant in Letter of Credit (LC)

4 thoughts on “Field 47A (Additional Conditions) in Letter of Credit (L/C)

  1. Hallo,

    need your help to adv detail instruction on field 78 for UPAS LC,
    or may I get general MT700 for UPAS LC field.

    Thank You

    1. Hi Dean,
      Thanks for your comment. In F78 (Instructions to the Paying/Accepting/Negotiating Bank) the LC opening bank write instruction about the documents to be submitted for payment. In UPAS LC instruction is mentioned for the discounting bank where the documents have to be submitted for payment. here’s an example of F78 in UPAS LC:
      1)ALL DOCUMENTS MUST BE SENT TO (DISCOUNTING BANK SWIFT) BANK LIMITED, BRANCH, COUNTRY.
      2)UPON RECEIPT OF FULL SET OF DOCUMENTS IN STRICT COMPLIANCE
      WITH THE TERMS AND CONDITIONS OF THE CREDIT, WE WILL ADVISE
      ACCEPTANCE TO (DISCOUNTING BANK NAME), (SWIFT) AND
      THE BENEFICIARY’S BANK WILL BE PAID IN DOCUMENTARY CREDIT’S
      ISSUING CURRENCY AT 30 DAYS FROM B/L BY (DISCOUNTING BANK), (SWIFT).
      Feel free to contact me directly through the contact page for further clarification.

    1. Hi Rajendra,
      Thanks for your question. If the shipment is FOB then LC value should be FOB. Can you share exactly what clause is there in 47A and which incoterm is mentioned in 45A?

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