I.

UCP600 gives a definition to negotiation, and provides for no exception to the

definition of negotiation
To determine whether or not an act in dispute constitutes a certain legal act, we shall first
start with the definition of the legal act if law provides for an express definition for the legal
act.
UCP600 gives an express definition to negotiation. Article 2 "Definitions" of UCP600
provides that "Negotiation means the purchase by the nominated bank of drafts (drawn on a
bank other than the nominated bank) and/or documents under a complying presentation, by
advancing or agreeing to advance funds to the beneficiary on or before the banking day on
which reimbursement is due to the nominated bank." According to this definition, an act of a
bank, having met the following four conditions, constitutes a negotiation.
A.The bank is the nominated bank under the negotiable letter of credit (the letter of credit
provides that 41D: Available with the bank by negotiation);
B.The bank does the act of advancing or agreeing to advance funds to the beneficiary;
C.The act is done under a complying presentation after document examination;
D.The advancing or agreeing to advance funds is on or before the banking day on which
reimbursement is due to the bank from the issuing bank (i.e. before the maturity date of the
draft in case of usance letter of credit with draft).
UCP600 gives negotiation a definition. In the meantime, there is no exception to negotiation
under UCP600. That is to say, UCP600 does not set forth a provision when defining
negotiation to exclude any other circumstances, nor provides that an act meeting definition of
negotiation is no longer a negotiation due to the presence of any other acts or events.
Therefore, under UCP600, when an act of a bank satisfies all the above four conditions
provided by the definition of negotiation, the act is a negotiation (A+B+C+D=negotiation),
and there is no exception. It follows that any debates about whether a negotiation (having
satisfied A+B+C+D) is negotiation due to the so-called presence of any other acts or
arrangements is a false proposition.