Do partial drawings and partial shipments have the same meaning?
Partial shipment and partial drawing terms are usually used with the same meaning in export and import transactions. But this is not necessarily the case in most instances especially in standby letters of credit and bank guarantees.
Letter of credit is silent in regards to the partial shipments and partial drawings. In these kinds of situations where L/Cs are silent about partial shipments and partial drawings, we need to look at the latest letter of credit rules. UCP 600, which is the latest set of letter of credit rules, tells us that partial shipments and partial drawings are allowed if the letter of credit is silent on partial shipments and drawings.
In the above example we see that the letter of credit is requesting a FCR (Forwarder’s Certificate of Receipt). FCR is not a transport document as a result you cannot make partial shipments under letters of credit which do not demand a transport document. But you can demand partial drawings from the issuing bank, confirming bank or the nominated bank.
In conclusion we say that if letters of credit do not request a transport document, you cannot make a partial shipment. Most of the stand-by letters of credit and bank guarantees do not require an original copy of the transport document. Other than that partial drawings are existed due to partial shipments of goods.
First of all I would like to make the definition of the partial drawing and later on try to explain the differences between partial shipments and partial drawing via examples.
Definition of a partial drawing: A presentation which is made for less than the full amount available will be defined as a partial drawing.
A letter of credit has been issued in SWIFT format, subject to UCP latest version, with the following details:
Important Note: Letter of credit silent about partial shipments and transhipments.
Field 45A: Quantity: 2,000 M/Ts Material: Hot Rolled Steel Plates -Size: -20.00MM x 2000 MM x 1000 MM - 500 M/Ts 25.00MM x 2000 MM x 1100 MM - 1500 M/Ts
Field 46A: Documents Required:
1 original signed commercial invoice and 1 copy.
1 original packing list and 1 copy.
1 original forwarder’s certificate of receipt issued to the name of the issuing bank bearing a clause that goods have been assumed control by the named forwarder with irrevocable instructions to be forwarded to the consignee and marked freight payable at destination.