It is expected that letters of credit issued after that date will be subject to the ucp 600. Pdf ucp 600 rules changing letter of credit business. Aug 04, 2008 ucp 600 the latest revision of ucp is the sixth revision of the rules since they were first promulgated in 1933. It explains how the practices articulated in ucp 600 are applied by documentary practitioners. As a member of the icc consulting group on ucp 500 revision, i had the honour and privilege to work with a number of leading l c experts and to participate in the entire ucp revision.
A bank utilizing the services of another bank for the purpose of giving effect to the instructions of the applicant does so for the account and at the risk of the applicant. This publication and the ucp should be read in their entirety and not in isolation. An accompaniment to the ucp 600 is the international standard banking practice for the examination of documents under documentary credits isbp, icc publication 745. Language that was difficult to understand in the ucp 500 has been replaced with simple, precise and concise language in ucp 600, says richard m. Application of ucp the uniform customs and practice for documentary credits, 1993 revision, icc publication no. Another difference is that the original four types are changed into three categories. Ucp 600 articles article 3 to article 7 icc ucp, ucp 600, ucp 600 articles, ucpdc ucp 600 article 3 interpretations for the purpose of these rules.
May 07, 2015 this icc opinion r634638rev indicated that the drafters sought to clarify this type of scenario when ucp500 art. If a credit states that charges are for the account of the beneficiary and charges cannot be collected or deducted from proceeds, the issuing bank remains liable. Provided that the stipulated documents are presented to the confirming bank o. An issuing bank or advising bank assumes no liability or responsibility should the instructions it transmits to another bank not be carried out, even if it has taken the. Icc uniform customs and practice for documentary credits ucp 600 duration. A presentation consisting of more than one set of transport documents evidencing shipment commencing on the same means of conveyance and for the same journey, provided they indicate the same destination, will not be regarded as covering a partial shipment, even if they indicate. A presentation consisting of more than one set of transport documents evidencing shipment commencing on. Ucp 600 and letters of credit trade finance global. Ucp 600 key issues the ucp 600 became available for incorporation into letters of credit from 1st july 2007 and replaces ucp 500. Dear friends, ucp 600 article 35, if a nominated bank determines that a presentation is complying and forwards the documents to the issuing bank or confirming bank, whether or not the nominated bank has honoured or negotiated, an issuing bank or confirming bank must honour or negotiate, or reimburse that nominated bank, even when the documents have been lost in transit between the nominated. Insurance documents under documentary credits trade finance. Ucp 600 are the latest revision of the uniform customs and practice that.
Uniform rules for documentary credits icc knowledge 2 go. Credits that are issued and governed by ucp 600 will be interpreted in line with the. Still others note that it fails to distinguish between proposed amendments from the perspective of the beneficiary, using the term amendment in three or four different ways. Ucp600 article 1 is itself the scope provision of ucp600 and is so entitled. It is well recognized that ucp 600, a universally accepted set of governing rules on letters of credit, plays an essential role in international trade. The duty of a bank to make payment is subjected to compliance of exporters documents.
Uniform customs and practice for documentary credits 1993. Steps in lc transaction see slides on next two pages important articles article 1 application of ucp the uniform customs and practice for documentary credits, 2007 revision, icc publication no. A letter of credit lc, in international trade may be described as an instrument of. A nominated bank acting on its nomination, a confirming bank, if any, or the issuing bank may, after providing notice required by subarticle 16 c iii a or b, return the documents to the presenter at any time. The four position papers issued in september 1994 were issued subject to their application under ucp 500. A bank instructing another bank to perform services is liable for any. So, we should note that all lc are irrevocable under ucp600. Where applicable, words in the singular include the plural a.
The 39 articles of ucp 600 are a comprehensive and practical working aid to bankers, lawyers, importers, and exporters, transport executives, educators, and everyone involved in. Ucp 600 article 28 insurance document and coverage a. Sep 03, 2015 ucp 600 ucp 600 are the latest revision of the uniform customs and practice that govern the operation of letters of credit. A presentation consisting of more than one set of transport documents evidencing shipment commencing on the same. When a nominated bank acting on its nomination, a confirming bank, if any, or the issuing bank determines that a presentation does not comply, it may refuse to honour or negotiate. An insurance document, such as an insurance policy, an insurance certificate or a declaration under an open cover, must appear to be issued and signed by an insurance company, an underwriter or their agents or their proxies. Lcviews instalment drawing under article 32 of ucp 600. Applying for the letter of credit page 7 a does ucp 600 apply page 7 b revocableirrevocable page 9 c documentary instructions page 10 d nondocumentary requirements page 11 4. Ucp 600 subarticle 37 c clearly states that an amendment should not stipulate that the advising to a beneficiary is conditional upon the. Ucp 600 article 37 disclaimer for acts of an instructed party. It assists with understanding whether a document complies with the terms of letters of credit. Ucp 600 article 37 disclaimer for acts of an instructed party a.
Icc ucp, lc rules, letter of credit, ucp 600, ucp 600 articles, ucpdc ucp 600 article 8 confirming bank undertaking a. Protection to banks issuing bank is responsible for all bank charges and other costs at home or abroad even if they are supposed to be paid by other party art. Ucp 600 article 34 to article 39 icc ucp, lc rules, letter of credit, ucp 600, ucp 600 articles, ucpdc ucp 600 article 34 disclaimer on effectiveness of documents a bank assumes no liability or responsibility for the form, sufficie. Applicant is responsible for any adverse consequences of foreign laws art. Examination of documents page a basic principles including time page duty to examine on face page. This is now similarly worded to the new bill of lading article article 20 insofar as concerns signature and indication that the goods have been shipped on board a named vessel on a given date and at a port of loading stated in the credit. In fact, the dangers of having requested allrisk cover in the credit are pretty evident see ucp 600 subarticle 28 h. Assuming that the confirming bank cannot collect the confirmation fee from the beneficiary, it has the right to claim from the issuing bank in accordance with subarticle 37 c ucp 600 which says. This entry was posted in ucp articles and tagged article 30, ucp600. A bank instructing another bank to perform services is liable for any commissions, fees, costs or expenses charges incurred by that bank in connection with its instructions. Ucp 600 subarticle 37 c clearly states that an amendment should not stipulate that the advising to a beneficiary is conditional upon the receipt of charges. The reforms under the ucp 600 rules for lc tra nsactions have provided a mixed bag of positive and negative issues. The positive steps taken b y the icc to address some of t he.
The ucp remain the most successful set of private rules for trade ever developed. Ucp 600 how the new rules on documentary credits may af. The ucp 500 has not been repealed and as such and in principle, parties could still opt for the ucp 500. Pdf ucp 600 rules changing letter of credit business for. What is the effect of excluding article 37c of ucp600. What is the effect of excluding article 37 c of ucp600. Article 5 principle of autonomy indicates lc is separate from the underlying sale contract. Ucp 600 was formally approved by icc members in october 2006 and will become effective july 1, 2007. Ucp600 article 1 application of ucp the uniform customs and practice for documentary credits, 2007 revision, icc publication no. Unlike positive law, private rules of practice are applicable only to the extent to which they have been chosen and to which the applicable law gives effect to them. Article 1 of the ucp 600 has introduced a significant change to the applicability of the rules. Chip thomas, a noted training expert on letters of credit.
It is the fruit of more than three years of work by the iccs commission on banking technique and practice. Are you happy with the ucp600 article 10 amendments. Accordingly, when the letter of credit expressly states that it is governed by the ucp 600 the contracting parties are bound by the rules set out in the ucp 600 and may exclude or modify its. This expression is regularly used by the parties when they actually mean icc a cover. As in ucp 500, ucp 600 has a separate article article 21 dealing with nonnegotiable sea waybills. Uniform customs and practice institute of international banking. Cdcs video lectures ucp 600 article 31 partial drawings or. In 500, the art 2 gave the mean of credit and four types lc, and in art 6 the irrevocable and revocable lc were listed at the same time, however, in 600, the revocable lc has been deleted. A bank instructing another bank to perform services is liable for any commissions, fees, costs or expenses charges incurred by that bank. Practice for documentary credits, the ucp 600, by a unanimous vote. Furthermore, subarticle 37 c provides for the instructing bank to be liable for any commissions, fees, costs or expenses. Ucp 600 and the opinions and decisions of the icc banking commission. Ucp dc icc pub 600 refresher part 2 art 4 8 1 duration. While ucp600 article 1 indicates that the effect of.
1433 576 822 725 230 2 1206 1084 1256 343 1610 350 996 1313 1149 775 1219 29 625 1376 779 1118 1234 431 872 538 295 1117 1422 1101 195 183