Letter of Credit with Tolerance Clause (+/-) – Flexible LC for Quantity or Value
Variations Built-In Adjustment Margins | MT700 SWIFT Format | UCP 600 Article 30 Compliant
⚠️ Shipments May Vary? Quantities or Final Values Might Fluctuate?
A French distributor ordered €2.5M in raw materials but allowed for +/-10% quantity variation due to supplier constraints. NNRV structured a tolerance LC under MT700. Final delivery was 92.3% of expected value—yet payment was still smooth.
🧠 “Thanks to the tolerance clause, we didn’t lose time renegotiating. NNRV locked it into the LC upfront.” – Samuel C., Materials Buyer
What Is a Letter of Credit with Tolerance Clause?
A Tolerance LC includes a +/- percentage margin on the quantity, value, or both, allowing payment flexibility if final shipment differs slightly from contract figures. This is defined under UCP 600 Article 30 and reflected in the MT700 LC fields.
At NNRV, we structure MT700 LCs that include exact tolerance margins (e.g., +/-5%, +/-10%) and verify that documents match adjusted amounts at the time of presentation.
🧠 “We supply liquids in drums—exact weights vary. Tolerance clauses in our LCs keep cash flow stable.” – Ali N., Chemical Supplier
Key Benefits of LC with Tolerance Clause
✅ Shipment Flexibility – Avoid LC rejection due to minor shipment differences.
✅ Supplier Accommodation – Useful for bulk, raw materials, or measured goods.
✅ Prevents Amendments – Built-in margin avoids LC revision delays.
✅ UCP 600 Article 30 Compliant – Accepted internationally by all SWIFT banks.
✅ Ideal for Commodities, Agro, Chemicals, Pharma, Energy
How It Works
Buyer & Seller Define Quantity/Value Margins – e.g., +/-10%.
LC Issued via MT700 – With tolerance noted in field 39A or 39C.
Seller Ships Goods – In line with agreed margins.
Documents Match Declared Tolerance – Bank checks compliance.
Payment Released – Within accepted tolerance range.
📂 Documents Required for Tolerance LC Issuance
To issue a tolerance-compliant MT700 LC, we require:
📌 Signed Sales Contract – With clause allowing +/- tolerance.
📌 Proforma Invoice – Including expected quantity and tolerance notation.
📌 Buyer/Seller KYC – For issuing and advising bank records.
📌 MT700 Draft – Specifying tolerance fields (Field 39A: quantity, 39C: value).
📌 Transport Docs – Showing actual shipped quantity.
🏦 Trusted Banks for Tolerance Clause LCs (MT700)
Here are examples of banks actively issuing MT700 LCs with quantity/value tolerance:
| Bank Name | SWIFT Code | Advantages | Disadvantages | Issuance Fees | Issuance Time | Min. Transaction | LC Types |
|---|---|---|---|---|---|---|---|
| HSBC Hong Kong | HSBCHKHHXXX | Easy tolerance field integration | Higher documentation accuracy needed | 1–9% | 2–5 days | $1M | Tolerance LC, Confirmed |
| BNP Paribas HK | BNPAHKHHXXX | Smooth acceptance of commodity fluctuations | Precise quantity limits enforced | 1–9% | 2–6 days | $1M | Tolerance LC, Transferable |
| Credit Foncier GmbH | CFEGDE82 | Strong EU legal coverage for +/- shipments | Slower updates for revised invoices | 1–9% | 2–7 days | $500K | Tolerance LC, Irrevocable |
| Standard Commerce USA | STDMDMDMXXX | Flexible MT700 tolerance terms | Requires clear documentation | 1–9% | 2–6 days | $500K | Tolerance LC, Confirmed |
| ABC Bank Mauritius | ABCKMUMU | Good for agro & bulk commodity LCs | Less use for high-tech products | 1–9% | 2–5 days | $250K | Tolerance LC, Usance |
🎯 Why Use a Tolerance LC?
| 🔒 Feature | ✅ Benefit |
| Accepts Shipment Variations | Prevents LC default over small changes |
| Reduces Amendment Requests | One LC covers ± differences |
| Faster Bank Processing | Bank knows limits before issuance |
| Ideal for Volume-Based Trades | Works in agro, raw materials, liquids |
| Full SWIFT + UCP Compliance | MT700 + Article 30 aligned |
🛠️ Our 5-Step Process
Draft contract with tolerance clause
Define field 39A (quantity) or 39C (value) % margins
Issue LC via MT700 with proper tolerance settings
Seller ships & provides documents within range
Bank releases payment accordingly
🔍 LC Tolerance vs Other LC Structures
| LC Type | Flexibility Level | Best Use Case | Risk Coverage |
| LC with Tolerance | High | Fluctuating quantity/value | 🔒🔒🔒🔒 |
| Fixed-Value LC | Low | Standardized contracts | 🔒🔒🔒 |
| Evergreen LC | Medium | Ongoing repeated shipments | 🔒🔒🔒 |
| Red Clause LC | Medium | Advance payment before ship | 🔒🔒 |
Why Choose NNRV?
🔒 MT700 + UCP 600 Structuring Experts
✅ Field 39A & 39C Drafting Support
📄 Commodity, Bulk & Measured Goods Experience
🌍 LC Structuring Across 40+ Countries
📁 End-to-End SWIFT & Compliance Handling
💲 Notes on Fees
Fees range between 1–9% depending on:
• Bank selected
• Margin size and sector
• Risk of variation tolerance
🔹 Get a tolerance LC structuring quote today.
🧠 Real Testimonials
“Our liquid bulk trades require tolerance—NNRV delivers the structure every time.”
– Marina P., Petrochemicals – UAE
“No shipment matches invoice 100%. The tolerance clause saves our cash flow.”
– Kojo M., Cocoa Exporter – Ghana
📚 What Makes Us Different?
✔️ Quantity & Value Tolerance Field Integration
✔️ Precision Drafting for Agro & Bulk Goods
✔️ UCP 600 Article 30 Compliance Engineering
📌 From $250K to $100M+ structured tolerance LCs executed
❓ Top 5 FAQ – Answered by Experts
What tolerance level is acceptable? UCP 600 allows +/-5% by default unless otherwise stated. We customize it.
Can I set different tolerances for value and quantity? Yes. Field 39A = quantity, 39C = value. You can set each independently.
What if shipment is under the minimum? Bank may refuse payment if outside the agreed margin. We help define limits.
Is tolerance allowed for confirmed LCs? Yes. The confirming bank must honor the agreed tolerance.
Do I need to restate invoices per shipment? Yes. We guide you to issue documents matching the actual shipped quantity.
🔗 Related Services
• Confirmed LC
• Irrevocable LC
• Commodity LC Structuring
• Agro & Measured Trade LC Support
📖 Strategic Blog Posts
• How to Structure LC Tolerance Fields in MT700
• UCP 600 Article 30: Quantity & Value Variance Explained
• Why Tolerance Clauses Matter in Commodities & Chemicals
🚀 Structure Your LC with Tolerance Now!
Protect your trade. Anticipate real-world shipment variances. Let NNRV build your tolerance LC.
📩 Book Your LC Structuring Call
☎️ Talk to Our MT700 Experts | 🌍 UCP 600 Compliant | ✅ 1–9% Fees Range