UCP 600

UCPDC 600 UCPDC 600

Md.Abu Zafar Md.Abu Zafar ShamsuddinShamsuddin

Article 1: Application of UCP

The The Uniform Customs and Practice for Uniform Customs and Practice for Documentary Credits, 2007 Revision, Documentary Credits, 2007 Revision, ICC Publication No. 600 ("UCP") are ICC Publication No. 600 ("UCP") are rules that apply to any documentary rules that apply to any documentary credit ("credit") credit ("credit") (including, to the (including, to the extent to which they may be applicable, extent to which they may be applicable, any standby letter of credit)any standby letter of credit) when the when the text of the credit expressly indicates text of the credit expressly indicates that it is subject to these rules. They are that it is subject to these rules. They are binding on all parties theretobinding on all parties thereto unless unless expressly modified or excluded by the expressly modified or excluded by the credit.credit.

Article 2: Definitions

For the purpose of these rules:For the purpose of these rules:• Advising bankAdvising bank means the bank that …… means the bank that ……

• ApplicantApplicant means the party on whose means the party on whose …………

• Banking dayBanking day means a day on which a means a day on which a ….….

• BeneficiaryBeneficiary means the party in means the party in whose….whose….


• Complying presentationComplying presentation means a means a presentation that is in accordance with thepresentation that is in accordance with the terms and conditions of the credit, the terms and conditions of the credit, the applicable provisions of these rules and applicable provisions of these rules and international standard banking practice.international standard banking practice.

• ConfirmationConfirmation means a definite means a definite undertaking of the..undertaking of the..

• Confirming bankConfirming bank means the bank ….. means the bank …..

• CreditCredit means any arrangement, however means any arrangement, however named or described, named or described, that is irrevocable and that is irrevocable and thereby constitutes a definite undertakingthereby constitutes a definite undertaking of the issuing bank to honour a complying of the issuing bank to honour a complying presentation.presentation.

• HonourHonour means:means: a.a. to pay at sightto pay at sight if the credit is if the credit is

available by sight payment.available by sight payment.b.b. to incur a deferred payment to incur a deferred payment undertaking and pay at maturityundertaking and pay at maturity if the if the credit is available by deferred payment.credit is available by deferred payment.c.c. to accept a bill of exchange to accept a bill of exchange ("draft") drawn by the beneficiary and ("draft") drawn by the beneficiary and pay at maturitypay at maturity if the credit is available if the credit is available by acceptance.by acceptance.

• Issuing bankIssuing bank means the bank means the bank that…………..that…………..


• NegotiationNegotiation means the purchase by the means the purchase by the nominated bank of draftsnominated bank of drafts (drawn on a bank other (drawn on a bank other than the nominated bank)than the nominated bank) and/or documents and/or documents under a complying presentation, by advancing or under a complying presentation, by advancing or agreeing to advance funds to the beneficiaryagreeing to advance funds to the beneficiary on on or before the banking day on which or before the banking day on which reimbursement is due to the nominated bank.reimbursement is due to the nominated bank.

• Nominated bankNominated bank means the bank with …… means the bank with ……

• PresentationPresentation means either the delivery of means either the delivery of documents..documents..

• PresenterPresenter means a beneficiary, bank or other means a beneficiary, bank or other party….party….


Article 3: Interpretations

For the purpose of these rules:For the purpose of these rules:• Where applicable, Where applicable, words in the singular words in the singular

include the plural and in the plural include the plural and in the plural include the singularinclude the singular [new][new]

• A credit is irrevocable even if there is A credit is irrevocable even if there is no indication to that effect [new]no indication to that effect [new]

• A document may be signed by A document may be signed by handwriting, facsimile signature, handwriting, facsimile signature, perforated signature, stamp, symbol or perforated signature, stamp, symbol or any other mechanical or electronic any other mechanical or electronic method of authentication.method of authentication.

• A requirement for a document to be A requirement for a document to be ……..certified or similar will be satisfied ……..certified or similar will be satisfied by any signature, mark, stamp or label on by any signature, mark, stamp or label on the document ……..the document ……..

• Branches of a bank in different countries Branches of a bank in different countries are considered to be separate banks.are considered to be separate banks.

• Terms such as "first class", "well known", Terms such as "first class", "well known", "qualified", "independent", "qualified", "independent", "official","competent" or "local" "official","competent" or "local" used to used to describe the issuer of a documentdescribe the issuer of a document allow allow any issuer any issuer except the beneficiaryexcept the beneficiary to issue to issue that document.that document.


• Unless required to be used in a Unless required to be used in a document, words such as "prompt", document, words such as "prompt", "immediately" or "as soon as possible" "immediately" or "as soon as possible" will be disregardedwill be disregarded [ISBP 23]. [ISBP 23].

• The expression "on or about" or similar The expression "on or about" or similar will be interpreted as a stipulation will be interpreted as a stipulation that that an eventan event is to occur during a period of is to occur during a period of five calendar days before until five five calendar days before until five calendar days after the specified date, calendar days after the specified date, both start and end dates included.both start and end dates included.


• The words "to", "until", "till", The words "to", "until", "till", "from""from" and and "between" when used to determine a "between" when used to determine a period of shipment include the date or period of shipment include the date or dates mentioned, and the words "before" dates mentioned, and the words "before" and "after" exclude the date mentioned.and "after" exclude the date mentioned.

• The words "from" and "after" when used The words "from" and "after" when used to determine a maturity date exclude to determine a maturity date exclude the date mentioned [ISBP 45, d]the date mentioned [ISBP 45, d]

• The terms "first half" and "second half" The terms "first half" and "second half" of a month shall be construed …..of a month shall be construed …..

• The terms "beginning", "middle" and The terms "beginning", "middle" and "end" of a month shall be construed "end" of a month shall be construed ……..……..


Article 4: Credits v. Contracts

• A credit by its nature is a separate A credit by its nature is a separate transaction from the sale or other transaction from the sale or other contract on which it may be contract on which it may be based………..based………..

• A beneficiary can in no case avail itself A beneficiary can in no case avail itself of the contractual relationships …..of the contractual relationships …..

• An issuing bank should discourage any An issuing bank should discourage any attempt by the applicant to include, as attempt by the applicant to include, as an integral part of the credit, copies of an integral part of the credit, copies of the underlying contract, proforma the underlying contract, proforma invoice and the like.invoice and the like.

LC ProcedureLC Procedure

Importer

Exporter

AdvisingBank

Issuing Bank

NominatedBank

Contract of Reimbursement

Purchase- SaleContract

Article 5: Documents v. Goods, Services or Performance

BanksBanks deal with documents and deal with documents and not with goods, services or not with goods, services or performance to which the performance to which the documents may relate.documents may relate.

Article 6: Availability, Expiry Date and Place for Presentation

• A credit must state the bank with A credit must state the bank with which it is available or whether it is which it is available or whether it is available with any bank. available with any bank. A credit A credit available with a nominated bank is available with a nominated bank is also available with the issuing bank.also available with the issuing bank.

• A credit must state whether it is A credit must state whether it is available by sight payment, deferred available by sight payment, deferred payment, acceptance or negotiation.payment, acceptance or negotiation.

• A credit must not be issued available A credit must not be issued available by a draft drawn on the applicant.by a draft drawn on the applicant.

Article 6: Availability, Expiry Date and Place…

• A credit must state an expiry date for presentation. An expiry date …… is last date for presentation.

•The place of the bank with which the credit is available is the place for presentation. … A place for presentation other than that of the issuing bank is in addition to the place of the issuing bank.

• Except as provided in 29 (a), a presentation must be made on or before the expiry date.

Article 7: Issuing Bank Undertaking

Provided that the stipulated documents are presented to the nominated bank or to the issuing bank and that they constitute a complying presentation, the issuing bank must honour if the credit is available by:

• sight payment, deferred payment or acceptance with the issuing bank……

• sight, deferred or acceptance with nominated bank and that nominated bank does not negotiate or pay or accept ……

• An issuing bank is irrevocably bound to honour as of the time it issues the credit.

• An issuing bank undertakes to reimburse a nominated bank that has honoured or negotiated a complying presentation and forwarded the documents to the issuing bank.

• Reimbursement for the amount of a complying presentation under a credit available by acceptance or deferred payment is due at maturity, whether or not the nominated bank prepaid or purchased before maturity.

Article 7: Issuing Bank Undertaking

Article 8: Confirming Bank Undertaking

Provided that the stipulated documents are presented to the confirming bank or to any other nominated bank and that they constitute a complying presentation, the confirming bank must:

• honour, if the credit is available by sight, deferred payment or acceptance with the confirming bank

• sight, deferred or acceptance with nominated bank and that nominated bank does not negotiate or pay or accept ……

• negotiate, without recourse, if the credit is available by negotiation …….

• A confirming bank is irrevocably bound to honour or negotiates of the time it adds its confirmation ..

• A confirming bank's undertaking to reimburse another nominated bank is independent of the confirming bank's undertaking to the beneficiary.

• If a bank is authorized or requested by the issuing bank to confirm a credit but is not prepared to do so, it must inform the issuing bank without delay and may advise the credit without confirmation.

Article 8: Confirming Bank Undertaking

Article 9: Advising Credits ……

• A bank utilizing the services of an advising bank or second advising bank must use the same bank

• If a bank is requested to advise a credit or amendment but elects not to do so……..

• If a bank cannot satisfy itself as to the apparent authenticity of the credit, the amendment or the advice, it must inform, without delay…………..

• If the advising bank or second advising bank elects nonetheless to advise the credit or amendment, it must inform the beneficiary or second advising bank that……

Article 9: Advising Credits and Amendments

• A credit and any amendment may be advised to a beneficiary through an advising bank. …

• By advising the credit or amendment, the advising bank signifies that ……

• An advising bank may utilize the services of another bank ("second advising bank") to advise the credit and any amendment to the beneficiary. By advising the credit or amendment, the second advising bank signifies that it has satisfied itself as to the apparent authenticity of the advice……… [new]

Article 10: Amendments

• A credit can neither be amended nor cancelled without the agreement of the issuing bank, the confirming bank, if any, and the beneficiary

• An issuing bank is irrevocably bound by an amendment as of the time it issues the amendment.

• A confirming bank may extend its confirmation or a confirming bank may, however, choose to advise an amendment without extending its confirmation and, if so, it must inform the issuing bank without delay and inform the beneficiary in its advice.

The terms and conditions of the original credit will remain in force for the beneficiary until the beneficiary communicates its acceptance of the amendment to the bank that advised suchamendment. The beneficiary should give notification of acceptance or rejection of an amendment. If the beneficiary fails to give such notification, a presentation that complies with the credit and to any not yet accepted amendment will be deemed to be notification of acceptance by the beneficiary of such amendment. As of that moment the credit will be amended.


• A bank that advises an amendment should inform the bank from which it received the amendment of any notification of acceptance or rejection [new]

• Partial acceptance of an amendment is not allowed and will be deemed to be notification of rejection of the amendment.

• A provision in an amendment to the effect that the amendment shall enter into force unless rejected by the beneficiary within a certain time shall be disregarded [new]


Article 11: Teletransmitted and Pre-Advised Credits and Amendments

• An authenticated teletransmission of a credit or amendment will be deemed to be the operative credit or amendment……

• If a teletransmission states "full details to follow" or states that the mail confirmation is to be the operative credit or amendment, ………...

• A preliminary advice of the issuance of a credit or amendment shall only be sent….. An issuing bank that sends a pre-advice is irrevocably committed to issue the operative credit………..

Article 12: Nomination

• Unless a nominated bank is the confirming bank, an authorization to honour or negotiate does not impose any obligation ……….

• By nominating a bank to accept a draft or incur a deferred payment undertaking, an issuing bank authorizes that nominated bank……..

• Receipt or examination and forwarding of documents by a nominated bank that is not a confirming bank does not make that nominated bank liable to honour or negotiate, nor does it constitute……..

Article 13: Bank-to-Bank Reimbursement Arrangements

• If a credit states that reimbursement is to be obtained by a nominated bank claiming on another party , the credit must state if the reimbursement is subject to the ICC rules for bank-to-bank reimbursements ineffect on the date of issuance of the credit.

• If a credit does not state that reimbursement is subject to the ICC rules for bank-to-bank reimbursements, the following apply:

• An issuing bank must provide a reimbursing bank with a reimbursement authorization……

• A claiming bank shall not be required to supply a reimbursing bank with a certificate………

Article 13: Bank-to-Bank Reimbursement…

• An issuing bank will be responsible for any loss of interest, together with any expenses incurred, if reimbursement is not provided on first demand ….

• A reimbursing bank's charges are for the account of the issuing bank. However, if the charges are for the account of the beneficiary, …… they shall be deducted

• An issuing bank is not relieved of any of its obligations to provide reimbursement if reimbursement is not made by a reimbursing bank on first demand.

Article 14: Standard for Examination of Documents

• Banks must examine a presentation to determine, on the basis of the documents alone, whether or not the documents appear on their face to constitute a complying presentation

• Bank shall each have a maximum of five banking days following the day of presentation……..

• Presentation not later than 21 calendar days after the date of shipment as described in these rules, but in any event not later than the expiry date of the credit.

Article 14: Standard for Examination….

• Data in a document, when read in context with the credit, the document itself and international standard banking practice, need not be identical to, but must not conflict with….

• In documents other than the commercial invoice, the description of the goods, services or performance, if stated, may be in general terms not conflicting with their description in the credit

• If a credit requires presentation of a document ………without stipulating by whom the document is to be issued or its data content, banks will accept the document if not conflicting

• A document presented but not required by the credit will be disregarded and may be returned……...

Article 14: Standard for Examination…..

• If a credit contains a condition without stipulating the document banks will deem such condition as not stated and will disregard it.

• A document may be dated prior to the issuance date of the credit……

• Addresses of the beneficiary and the applicant need not be the same ……., but must be within the same country…….. However, when the address and contact details of the applicant appear as part of the consignee or notify party details on a transport document……, they must be as stated in the credit

Article 15: Complying Presentation

• When an issuing bank determines that a presentation is complying, it must honour.

• When a confirming bank determines that a presentation is complying, it must honour or negotiate and forward the documents to the issuing bank.

• When a nominated bank determines that a presentation is complying and honours or negotiates, it must forward the documents to the confirming bank or issuing bank.

Article 16: Discrepant Documents, Waiver and Notice

• When a presentation does not comply, it may refuse to honour or negotiate.

• When an issuing bank determines that a presentation does not comply, it may in its sole judgement approach the applicant ..

• When decides to refuse, it must give a single notice to .........the presenter

• The notice must state: i. that the bank is refusing; and, ii. each discrepancy……………..; and iii. That…………….

Article 16: Discrepant Documents……

a)the bank is holding the documents pending further instructions from the presenter; or

b) the issuing bank is holding the documents until it receives a waiver from the applicant and agrees to accept it, or receives further instructions from the presenter prior to agreeing to accept a waiver; or

c) the bank is returning the documents; or

d) the bank is acting in accordance with instructions previously received from the presenter.

Article 16: Discrepant Documents…….

• Notice must be given by no later than the close of the fifth banking day following the day of presentation.

• after providing notice requiring by iii. a) b), return the documents to the presenter at any time.

• If an issuing bank or a confirming bank fails to act in accordance with the provisions, it shall be precluded from claiming that the documents are complying presentation.

• If banks have given notice in accordance with this article, it shall then be entitled to claim a refund, with interest, of any reimbursement made.

• Bearing apparently original signature, mark, stamp or lebel, unless indicates not original.

• Stating Original

• At least one original of each document

Article : 17 : Original Documents and Copies

• Must appear to have been issued by the beneficiary

• Must be in the same currency of credit

• Description of goods must be correspond to that in credit.

•Need not be signed

Article : 18 : Commercial Invoice

• Name of the Carrier and Signature• Goods have been dispatched, taken in Charge or shipped on board• Date of Issuance and On Board date • Place of dispatch and final destination• Sole original or full set• Meaning of “Transhipment”

Article : 19 : Transport Document Covering at least two different Modes of Transport

• Name of Carrier and Signature

• Shipped on board a named Vessel

• Date of Issuance and On Board date

• Port of loading and port of discharge

• Sole original or full set of original

• Terms and conditions of carriage• Meaning of Transshipment

Article : 20 : Bill of Lading

Same as Article - 20

Article : 21 : Non-Negotiable Sea Way Bill

• Contains an indication that it is subject to Charter Party and Must be signed• Shipped on Board a named vessel• Date of Issuance and On Board date• Port of Loading and Port of Discharge• Port of discharge may be a range of ports or a geographical area• Sole original or full set• Carter Party contract will not be examined, even it is required to be submitted.

Article : 22 : Charter Party B/L

• Name of Carrier and signature• Goods have been accepted for carriage• Date of issuance and actual date of shipment• Flight date is not date of shipment• Airport of departure and destination• Original for consignor• Terms and conditions of carriage• Meaning of Transhipment

Article : 23 : Air Transport Document

• Name of the Carrier and Signed• Receipt of goods by signature, stamp or notation• Date of shipment or received for shipment• Place of shipment and destination• In the absence of number of originals issued, the number presented will constitute a full set.

• Meaning of Transshipment

Article : 24 : RRI Transport Document

• Courier receipt evidencing receipt of goods

• Name of Courier service, stamped or signed

• Date of Pick-up and shipment

• Post receipt or Certificate of Posting evidences receipt of goods

• Stamped or signed and dated at the place of shipment and Date of Shipment

Article : 25 : Courier Receipt, Post Receipt or Certificate of Posting

• Must not indicate goods are or will be loaded on deck

• “Shipper’s Load and Count”, “Said to Contain” etc. are acceptable

Article : 26 : On Deck, Shipper’s Load and Count, Said by Shipper to Contain, Charges

Additional to Freight

• Bank will accept only “Clean” TD

• Meaning of “Clean”

• Word Clean need not appear

Article : 27 : Clean Transport Document

• Insurance Document means insurance policy, insurance certificate or a declaration under a cover note• Issued and signed by an insurance company, an underwriter or their agents

•If issued more than one original, all originals must be submitted

•Date of Issuance of Insurance Document• Same Currency as the credit• Amount and risk Coverage

Article : 28 : Insurance Document and Coverage

• If falls on a holiday, first following business day.

• Appropriate notation.

• Latest date of shipment will not be extended for holiday.

Article : 29 : Extension of Expiry Date or Last Day for Presentation

• 10% tolerance, if words like “about” or “approximate” are used in relation to amount, quantity or unit price.

• 5% tolerance in quantity is allowed, in no. of packets is not mentioned and drawing does not exceed credit amount.

• 5% less in credit in allowed, if shipped in full and unit price is not reduced, even when partial shipment is prohibited.

Article : 30 : Tolerance in Credit Amount, Quantity and Unit Prices

• Are Allowed

• Same means of conveyance and same journey

• Date of Shipment

• Post Receipts or Courier Receipts

Article : 31 : Partial Drawings or Shipments

Article : 32 : Installment Drawings or Shipments

Article : 33 : Hours of Presentation

Article : 35 : Disclaimer on Transmission and Translation

Article : 36 : Force Majeure

Article : 37 : Disclaimer for Acts of an Instructed Party

Article : 34 : Disclaimer on Effectiveness of Documents

• Meaning of Transferable Credit

• May be transferred either wholly or partly at the request of first beneficiary

• Meaning of Transferring Bank. Issuing Bank may be transferring Bank

• Transferring Bank can only transfer upto the extent allowed

• Cannot be transferred more than once.

Article : 38 : Transferable Credits

• Conditions of transfer and Exception – Amount, Unit Price, Expiry Date, Presentation Date, Latest Shipment Date any or all of which may be reduced, only insurance cover may be increased.• Substitution of the name of first beneficiary for that of applicant• Failure on the part of first beneficiary to present document and correct discrepancy

• Presentation of documents by second beneficiary must be made to transferring bank.

Article : 38 : Transferable Credits

Article : 39 : Assignment of Proceeds

Thank You

UCP 600

Documents

Transcript of UCP 600