ISBP 745 Section B: Invoice Amount vs Draft Amount

Introduction

Under documentary credits, the commercial invoice and the draft (bill of exchange) must present consistent amounts. ISBP 745 Section B establishes practice standards for commercial invoices, while UCP 600 governs drafts. When the invoice amount and the draft amount differ, the discrepancy raises questions about whether the presentation complies with the credit's amount requirement. This guide examines the relationship between the invoice amount and the draft amount, identifies common failure modes, and provides a resolution framework.

Failure Mode Analysis

FM1: Invoice Amount Exceeds Credit Amount

The credit is for USD 100,000. The invoice shows USD 105,000. Unless the credit includes an "about" or "approximately" tolerance, the invoice exceeds the credit amount. The draft drawn for USD 105,000 also exceeds the credit amount. Both are discrepant.

FM2: Invoice Amount Is Less Than the Draft Amount

The invoice shows USD 95,000, but the draft is drawn for USD 100,000 (the full credit amount). The draft amount exceeds the invoice amount. This creates a conflict because the draft should correspond to the value of the goods as shown on the invoice.

FM3: Invoice Amount and Draft Amount Are Both Correct but in Different Currencies

The invoice shows EUR 85,000 while the draft shows USD 100,000. If the credit is in USD, the invoice must show the USD value. If the credit permits multiple currencies, both must be consistent with the credit terms.

FM4: Invoice Shows a Discount or Rebate That Reduces the Amount Below the Draft

The invoice shows the gross value of USD 100,000 with a discount of USD 5,000, resulting in a net value of USD 95,000. The draft is drawn for USD 100,000. The discrepancy is whether the draft should correspond to the gross or net invoice value. Under UCP 600 Art 18(a)(iii), the invoice must show the value of the goods — the net value is the operative amount.

FM5: Invoice Amount Is Stated in Words That Do Not Match the Amount in Figures

The invoice shows "USD 100,000" in figures but "One Hundred and Ten Thousand USD" in words. Under ISBP 745, if both words and figures appear, the amount in words governs in case of discrepancy. However, this creates an internal inconsistency that may conflict with the draft amount.

Deterministic Resolution Architecture

Step 1: Read the Credit's Amount and Currency

Identify the credit amount, currency, and any tolerance provisions:
- Exact amount: USD 100,000.
- Tolerance: "about USD 100,000" (10% tolerance).
- Currency: USD.

Step 2: Read the Invoice Amount

Identify the total value shown on the invoice. If the invoice shows a breakdown (unit price × quantity), verify the total.

Step 3: Read the Draft Amount

Identify the amount drawn on the draft (bill of exchange). Verify it matches the credit amount or falls within the permitted tolerance.

Step 4: Compare Invoice Amount Against Credit Amount

Apply the tolerance provisions:
- No tolerance: Invoice amount must equal the credit amount.
- "About" or "approximately": 10% tolerance (ISBP 745 B12 for quantity; Art 30(a) for amount).
- 5% tolerance under Art 30(a): Invoice amount may vary by up to 5%.

Step 5: Compare Draft Amount Against Credit Amount

The draft must not exceed the credit amount (UCP 600 Art 6(a)). If the draft exceeds the credit amount, it is discrepant.

Step 6: Compare Invoice Amount Against Draft Amount

The invoice and draft amounts should be consistent. If they differ:
- Both must comply with the credit's amount requirement independently.
- A discrepancy between the two may indicate an error.

Step 7: Issue the Refusal Notice

If any amount discrepancy is found:
- State: "Invoice amount [X] does not match credit amount [Y], contrary to ISBP 745 B6 and UCP 600 Art 18(a)(iii)."
- Or: "Draft amount [X] exceeds credit amount [Y], contrary to UCP 600 Art 6(a)."

Conclusion

The invoice amount and the draft amount must both comply with the credit's amount requirement. While they need not be identical in all cases (e.g., when the draft is drawn for less than the full credit amount), they must not conflict with each other or the credit. ISBP 745 B6 and UCP 600 Art 18(a)(iii) govern the invoice; UCP 600 Art 6(a) governs the draft. Practitioners should verify that both amounts match the credit and each other before presentation.

FAQ

Q1: Can the draft be drawn for less than the invoice amount?

Yes, if the credit permits partial drawings. The draft may be drawn for a portion of the credit amount. However, the draft amount must not exceed the credit amount.

Q2: Does the 5% tolerance in Art 30(a) apply to the invoice amount?

Art 30(a) allows a 5% tolerance in the amount unless the credit excludes it. However, the tolerance applies to the amount of the goods or services, not to the credit amount itself. If the credit states an exact amount, the invoice must match.

Q3: Can the invoice show a different currency than the draft?

Only if the credit permits multiple currencies. If the credit is in USD, both the invoice and draft must be in USD. A currency mismatch is a discrepancy.

Q4: What if the invoice shows a net amount after deductions?

Under ISBP 745 B6, the invoice must show the value of the goods as stipulated in the credit. If the credit requires the gross value, deductions are not permitted. If the credit permits deductions, the net value is the operative amount.

Q5: Does the draft need to reference the invoice amount?

UCP 600 does not require the draft to reference the invoice amount. However, the draft amount must comply with the credit's amount requirement. The bank examines each document independently.

Source Notes

Context only — no direct article text was extracted from these sources during research:

• ICC Academy — A Guide to Types of Documentary Credit (ICC Academy, 2024)
• ICC Academy — 11 Questions That Will Help You Master Documentary Credits (ICC Academy, 2024)
• ICC Academy — Certified UCP 600 Specialist (CUCP) (ICC Academy, 2025)
• ICC — UCP 600 Including eUCP Version 2.1 (International Chamber of Commerce, 2023)
• ICC — ISBP 745: International Standard Banking Practice (International Chamber of Commerce, 2013, updated 2020)