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U
NIFORM
C
USTOMS AND
P
RACTICE
F
OR
D
OCUMENTARY
C
REDITS
 – UCP 500
1
U
NIFORM
C
USTOMS AND
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RACTICE FOR
D
OCUMENTARY
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REDITS
International Chamber of Commerce Publication No. 500, Effective January 1, 1994IntroductionThe UCP 500 is the world standard for managingDocumentary and Standby Letters of Credit between tradingpartners and their supporting banks and service companies.General Provisions and DefinitionsArticle 1Application of UCPArticle 2Meaning of CreditArticle 3Credits v. ContractsArticle 4Documents v. Goods/Services/PerformancesArticle 5Instructions to Issue/Amend CreditsForm and Notification of CreditsArticle 6Revocable v. Irrevocable CreditsArticle 7Advising Bank’s LiabilityArticle 8Revocation of a CreditArticle 9Liability of Issuing and Confirming BanksArticle 10Types of CreditArticle 11Teletransmitted and Pre-Advised CreditsArticle 12Incomplete or Unclear InstructionsLiabilities and ResponsibilitiesArticle 13Standard for Examination DocumentsArticle 14Discrepant Documents and NoticeArticle 15Disclaimer on Effectiveness of DocumentsArticle 16Disclaimer on the Transmission of MessagesArticle 17Force MajeureArticle 18Disclaimer for Acts of an Instructed PartyArticle 19Bank-to-Bank Reimbursement ArrangementsDocumentsArticle 20Ambiguity as the Issuers of DocumentsArticle 21Unspecified Issuers or Contents of DocumentsArticle 22Issuance Date of Documents Vs. Credit DateArticle 23Marine/Ocean Bill of LadingArticle 24Non-Negotiable Sea WaybillArticle 25Charter Party Bill of LadingArticle 26Multimodal Transport DocumentsArticle 27Air Transport DocumentArticle 28Road, Rail or Inland Waterway Transport Docs.Article 29Courier and Post ReceiptsArticle 30Transport Documents issued by Freight ForwardersArticle 31“On Deck, Shipper’s Load …, Name of Consignor”Article 32Clean Transport DocumentsArticle 33Freight Payable/Prepaid Transport DocumentsArticle 34Insurance DocumentsArticle 35Type of Insurance CoverArticle 36All Risks Insurance CoverArticle 37Commercial InvoicesArticle 38Other DocumentsMiscellaneous ProvisionsArticle 39Allowances in Credit Am., Quantity and Unit PriceArticle 40Partial Shipments/DrawingsArticle 41Installment Shipments/DrawingsArticle 42Expiry Date and Place for Presentation of Docs.Article 43Limitation on the Expiry DateArticle 44Extension of Expiry DateArticle 45Hours of PresentationArticle 46General Expressions as to Dates for ShipmentArticle 47 Date Terminology for Periods of ShipmentTransferable CreditArticle 48Transferable CreditAssignment of ProceedsArticle 49Assignment of ProceedsICC Arbitration
 
U
NIFORM
C
USTOMS AND
P
RACTICE
F
OR
D
OCUMENTARY
C
REDITS
 – UCP 500
2
GENERAL PROVISIONS AND DEFINITIONSARTICLE 1Application of UCP
The Uniform Customs and Practice for Documentary Credits,1993 Revision, ICC Publication No. 500, shall apply to allDocumentary Credits(including to the extent to which theymay be applicable, Standby Letter(s) of Credit) where they areincorporated into the text of the Credit. They are binding onall parties thereto, unless otherwise expressly stipulated in thecredit.
ARTICLE 2Meaning of Credit
For the purposes of these Articles, the expressions“Documentary Credit(s) and “Standby Letter(s) of Credit”(hereinafter referred to as “Credit(s)”),mean any arrangement,however named or described,whereby a bank (the “IssuingBank”) actingat the request andon the instructions of acustomer (the “Applicant”)or on its own behalf,i.is to make a payment toor to the order of a third party (the “Beneficiary”), or is to accept and pay bills of exchange(Draft(s)) drawn by the Beneficiary,orii.authorizes another bank to effect such payment, or toaccept and pay such bills of exchange (Draft(s)),oriii.authorizes another bank to negotiate, against stipulateddocument(s), provided that the terms and conditions of theCredit are complied with.For the purposes of these Articles,branches of a bank indifferent countries are considered another bank .
ARTICLE 3Credits v. ContractsA.
 Credits, by their nature,are separate transactions from the sales or other contract(s)on which they may be based andbanks are in no way concerned with or bound by suchcontract(s), even if any reference whatsoever to suchcontract(s) is included in the Credit. Consequently, theundertaking of a bank to pay, accept and pay Draft(s) ornegotiate and/or to fulfil any other obligation under the Credit,is not subject to claims or defenses by the Applicant resultingfrom his relationships with the Issuing Bank or theBeneficiary.
B
. A Beneficiary can in no case avail himself of thecontractual relationships existing between the banks orbetween the Applicant and the Issuing Bank.
ARTICLE 4Documents v. Goods/Services/Performances
In Credit operations all partiesconcerned deal with documents, and not with goods, services and/or otherperformances to which the documents may relate.
ARTICLE 5Instructions to Issue/Amend CreditsA
. Instructions for the issuance of a Credit, the Credit itself,instructions for an amendment thereto, and the amendmentitself, must be complete and precise.In order to guard against confusion and misunderstanding,banks should discourageany attempt:
i
. to includeexcessive detailin the Credit or in anyamendment thereto;
ii.
to give instructions to issue, advise or confirm a Credit byreference to a Credit previously issued (similar Credit) wheresuch previous Credit has been subject to acceptedamendment(s), and/or unaccepted amendments(s).
B.
All instructions for the issuance of a Credit and the Credititself and, where applicable, all instructions for an amendmentthereto and the amendment itself,must state precisely thedocument(s) against which payment, acceptance or negotiationis to be made.
FORM AND NOTIFICATION OF CREDITSARTICLE 6Revocable v. Irrevocable CreditsA
.A credit may be either
i.
 revocableor
ii.
 irrevocable.
B.
The Credit, therefore, should clearly indicate whether it isrevocable or irrevocable.
 
U
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 – UCP 500
3
C.
 In the absence of such indication the Credit shall bedeemed to be irrevocable.
ARTICLE 7Advising Bank’s LiabilityA.
A Credit may be advised to a Beneficiary through anotherbank (the “Advising Bank”) without engagement on the partof the Advising Bank, but that bank, if elects to advise theCredit, shall take reasonable care to check the apparentauthenticity of the Credit which it advises. If the bank electsnot to advise the Credit, it must so inform the Issuing Bank without delay.
B.
If the Advising Bank cannot establish such apparentauthenticity it must inform, without delay, the bank fromwhich the instructions appear to have been received that it hasbeen unable to establish the authenticity of the Credit and if itelects nonetheless to advise the Credit it must inform theBeneficiary that it has not been able to establish theauthenticity of the Credit.
ARTICLE 8Revocation of a CreditA.
 A revocable Credit may be amended or cancelled by theIssuing Bank at any moment and without prior notice to theBeneficiary.
B.
However, the Issuing Bank must:
i.
reimburse another bank with which a revocable Credit hasbeen made available for sight payment, acceptance ornegotiation – for any payment, acceptance or negotiation madeby such bank – prior to receipt by it of notice of amendment orcancellation, against documents which appear on their face tobe in compliance with the terms and conditions of the Credit;
ii.
reimburse another bank with which a revocable Credit hasbeen made available for deferred payment, if such a bank has,prior to receipt by it of notice of amendment or cancellation,taken up documents which appear on their face to be incompliance with the terms and conditions of the Credit.
ARTICLE 9Liability of Issuing and Confirming BanksA.
 An irrevocable Credit constitutes a definite undertaking of the Issuing Bank , provided that the stipulated documents arepresented to the Nominated Bank or to the Issuing Bank andthat the terms and conditions of the Credit are complied with:
i.
if the Credit provides forsight payment – to pay at sight;
ii.
if the Credit provides fordeferred payment – to pay on thematurity date(s)determinable in accordance with thestipulations of the Credit;
iii.
if the Credit provides foracceptance;
a.
by theIssuing Bank – to accept Draft(s) drawn by theBeneficiary on the Issuing Bank and pay them at maturity,or
b.
 by another drawee bank – to accept and pay at maturityDraft(s) drawn by the Beneficiary on the Issuing Bank in theevent the drawee bank stipulated in the Credit does not acceptDraft(s) drawn on it, or to pay Draft(s) accepted but not paidby such drawee bank at maturity;
iv.
if the Credit providesfor negotiation – to pay withoutrecourse to drawersand/or bona fide holders, Draft(s) drawnby the Beneficiary and/or documents(s) presented under theCredit.A Credit should not be issued available by Draft(s) onthe Applicant.If the Credit nevertheless calls for Draft(s) onthe Applicant, bank will consider such Draft(s) as anadditional document(s).
B.
A confirmationof an irrevocable Creditby another bank (the “Confirming Bank”)upon the authorization or request of the Issuing Bank , constitutes a definite undertaking of theConfirming Bank, in addition to that of the Issuing Bank,provided that the stipulated documents are presented to theConfirming Bank or to any other Nominated Bank and that theterms and conditions of the Credit are complied with:
i.
If the Credit provides for sight payment – to pay at sight;
ii.
if the Credit provides for deferred payment – to pay on thematurity date(s) determinable in accordance with thestipulations of the Credit;
iii.
 if the Credit provides for acceptance:
a.
by theConfirming Bank – to accept Draft(s) drawn by theBeneficiary on the Confirming Bank and Pay them atmaturity,or
b.
 by another drawee bank – to accept and pay at maturityDraft(s)drawn by the Beneficiary on the Confirming Bank, inthe event the drawee bank stipulated in the Credit does notaccept Draft(s) drawn on it, or to pay Draft(s) accepted but notpaid by such drawee bank at maturity;
iv
.if the Credit provides for negotiation – to negotiate withoutrecourseto drawers and/or bona fide holders, Draft(s) drawnby the Beneficiary and/or document(s) presented under theCredit.A Credit should not be issued available by Draft(s) onthe Applicant.If the Credit nevertheless calls for Draft(s) on
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