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UCP 600:
Correct Application and Interpretation
Feleban
XXIII Latin American Congress – Clace 2007
4/5 June 2007
Gary Collyer
Collyer Consulting
LLP
1
ICC Task Force Recommendations –
UCP 600
 Any review that is undertaken should be a “Technical” one and
not line by line
 Need to review ICC Opinions, Decisions, DOCDEX cases and

results of Court actions
 Seven articles of the UCP account for over 58% of all Opinions
 Seventeen Articles have caused none, one or two Opinions
 Need to consider incorporation of URR525, ISP98 and eUCP
2
UCP 600 – The Process
 Commenced with approval from ICC Banking Commission in
May 2003
 Drafting Group established with 9 members
 Consulting Group established with 41 members from 26

countries
 Drafting Group have met on 15 occasions
 Over 5000 individual comments received and reviewed
 Approved unanimously on 25 October 2006
3
UCP 600 – The Process
ICC National Committees were requested to vote on issues such
as:
 “Negotiation” – in or out;
 “On its face”;
 “Reasonable time”;
 “Parties” or “Banks”;
 “Discounting of deferred payment undertakings”;
 “Whether to split Article 28 of UCP 500”;
 “Relevance of Article 30 UCP 500”;
 “Requirement for new articles”; and
 preferred versions for “Non-documentary conditions” and degree
of review for “inconsistency” - or “non-conflicting” as shown in
UCP 600.
4
UCP 600 – UCP 500 Articles not included
 Article 5 Instructions to Issue/Amend Credits
 Article 6 (part) Revocable
 Article 8 Revocation
 Article 12 Incomplete or Unclear
Instructions
 Article 38 Other Documents
Content of UCP 500 Articles 2, 6, 9, 10, 20, 21, 22, 30,

31, 33, 35, 36, 46 & 47 merged or catered for in other
ways within the text.
5
UCP 600 – Articles not found in UCP 500
 Article 2 Definitions
 Article 3 Interpretations
 Article 9 Advising of Credits and Amendments
 Article 12 Nomination
 Article 15 Complying Presentation
 Article 17 Original Documents and Copies
6
UCP 600 – Overview of Article 1
UCP 600 Article 1 UCP 500 Article 1
Application of UCP The Uniform Customs and Practice for
Documentary Credits, 1993 Revision, ICC
Publication N°500, shall apply to all
 Publication Number & Documentary Credits (including to the
Date of Revision extent to which they may be applicable,
 Modify or Exclude Standby Letter(s) of Credit) where they
are incorporated into the text of the
 No reference to “unless Credit. They are binding on all parties
otherwise stipulated in the thereto, unless otherwise expressly
credit” throughout stipulated in the Credit.
 Applicable when the LC
expressly indicates that it
is subject to these “rules”.
 Retention of Standby
Letters of Credit
 SWIFT changes
7
UCP 600 Article 2
Definitions
 Advising Bank
 Issuing Bank
 Applicant*
 Negotiation*
 Banking Day*  Nominated Bank
 Beneficiary  Presentation*
 Complying Presentation*  Presenter*
 Confirmation
 Confirming Bank
 Credit
 Honour*
8
UCP 600 Article 2
Definitions
 Applicant the party on whose request the credit is issued.
 Banking Day a day on which a bank is regularly open at the

place at which an act subject to these rules is to be performed.
 Complying Presentation a presentation that is in

accordance with the terms and conditions of the credit, the
applicable provisions of these rules and international standard
banking practice.
9
UCP 600 Article 2
Definitions
 Honour:
a. to pay at sight if the credit is available by sight payment.
b. to incur a deferred payment undertaking and pay at
maturity if the credit is available by deferred payment.
c. to accept a bill of exchange (“draft”) drawn by the
beneficiary and pay at maturity if the credit is available
by acceptance.
10
UCP 600 Article 2
Definitions
 Negotiation:
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.
11
UCP 600 Article 2
Definitions
 Presentation either the delivery of documents under a credit to

the issuing bank or nominated bank or the documents so
delivered.
 Presenter a beneficiary, bank or other party that makes a

presentation.
12
UCP 600 Article 3
Interpretations
 Where applicable, words in the singular include the plural and

in the plural include the singular.
 A credit is irrevocable even if there is no indication to that
effect.
 Branches of a bank in different countries are considered to be
separate banks.
 Unless required to be used in a document, words such as
"prompt", "immediately" or "as soon as possible" will be
disregarded.
 The words “from” and "after" when used to determine a
maturity date exclude the date mentioned.
13
Interpretations (from UCP 500 Article 20):
 A document may be signed by handwriting, facsimile signature,
perforated signature, stamp, symbol or any other mechanical or
electronic method of authentication.
 A requirement for a document to be legalized, visaed, certified or
similar will be satisfied by any signature, mark, stamp or label on
the document which appears to satisfy that requirement.
 Terms such as "first class", "well known", "qualified",
"independent", "official", "competent" or "local" used to describe
the issuer of a document allow any issuer except the beneficiary
to issue that document.
14
Interpretations (from UCP 500 Articles 46 & 47):
 The expression "on or about" or similar will be interpreted as a
stipulation that an event is to occur during a period of five
calendar days before until five calendar days after the specified
date, both start and end dates included.
 The words "to", "until", "till", “from” and “between” when used to
determine a period of shipment include the date or dates
mentioned, and the words “before” and "after" exclude the date
mentioned.
 The terms "first half" and "second half" of a month shall be
construed respectively as the 1st to the 15th and the 16th to the
last day of the month, all dates inclusive.
 The terms "beginning", "middle" and "end" of a month shall be
construed respectively as the 1st to the 10th, the 11th to the 20th
and the 21st to the last day of the month, all dates inclusive.
15
Credits v. Contracts a. Credits, by their nature, are separate transactions
from the sales or other contract(s) on which they may
be based and banks are in no way concerned with or
Addition: bound by such contract(s), even if any reference
 An issuing bank should whatsoever to such contract(s) is included in the
Credit.
discourage any attempt by Consequently, the undertaking of a bank to pay,
the applicant to include, as accept
and pay Draft(s) or negotiate and/or to fulfil any other
an integral part of the obligation under the Credit, is not subject to claims or
credit, copies of the defences by the Applicant resulting from his
underlying contract, relationships with the Issuing Bank or the Beneficiary.
proforma invoice and the b. A Beneficiary can in no case avail himself of the
like. contractual relationships existing between the banks or
between the Applicant and the Issuing Bank.
16
Documents v. Goods, Services or In Credit operations all parties concerned
deal with documents, and not with goods,
Performance services and/or other performances to
which the documents may relate.
 Banks deal with

documents, other parties
deal with documents
and/or goods.
17
UCP 600 Article 6 UCP 500 sub-Articles 10(a) and (b)(i)
All Credits must clearly indicate whether they
Availability, Expiry Date and Place for are available by sight payment, by deferred
Presentation payment, by acceptance or by negotiation.
 Same principle in Article 6 Unless the Credit stipulates that it is available only with
(b) the Issuing Bank, all Credits must nominate the bank
(the "Nominated Bank") which is authorised to pay, to
 Always available with incur a deferred payment undertaking, to accept
Draft(s) or to negotiate. In a freely negotiable Credit,
Issuing Bank any bank is a Nominated Bank.
 Freely available credits as
UCP 500 sub-Articles 9(a)(iv) and
opposed to freely
9(b)(iv)
negotiable A Credit should not be issued available by
Draft(s) on the Applicant. If the Credit
 Stronger wording “must nevertheless calls for Draft(s) on the Applicant,
not” and no reference to banks will consider such Draft(s) as an
additional document(s).
additional document
18
UCP 600 Article 6 UCP 500 sub-Articles 42 (a) and (b)
Availability, Expiry Date and Place for a All Credits must stipulate an expiry date and a
place for presentation of documents for
Presentation payment, acceptance, or with the exception of
freely negotiable Credits, a place for
 Covered in Article 6 (d) (i) presentation of documents for negotiation. An
expiry date stipulated for payment, acceptance
and (ii) or negotiation will be construed to express an
expiry date for presentation of documents.
 A place other than the
issuing bank includes the b Except as provided in sub-Article 44(a),
documents must be presented on or before
place of the issuing bank such expiry date.
 Covered in Article 6 (e)
19
UCP 600 Article 7 UCP 500 sub-Article 9 (a)
a. An irrevocable Credit constitutes a definite
Issuing Bank Undertaking undertaking of the Issuing Bank, provided that
the stipulated documents are presented to the
 Definition of Credit Nominated Bank or to the Issuing Bank and that
the terms and conditions of the Credit are
complied with:
 An Issuing Bank ‘Honours’ i. if the Credit provides for sight
payment - to pay at sight;
– it does not negotiate ii. if the Credit provides for deferred
payment - to pay on the maturity date(s)-
 Refined wording to reflect determinable in accordance with the stipulations
of the Credit;
the position if a nominated iii. if the Credit provides for
acceptance:
bank does not act (as a. by the Issuing Bank - to accept Draft(s) drawn
by the Beneficiary on the Issuing Bank
shown in slide 21) and pay them at maturity,
or
b. by another drawee bank - to accept and pay
at maturity Draft(s) drawn by the
Beneficiary on the Issuing Bank in the event the
drawee bank stipulated in the Credit does not
accept Draft(s) drawn on it, or to pay Draft(s)
accepted but not paid by such drawee bank at
maturity;
20
UCP 600 Article 7 (a)
Issuing Bank Undertaking
ii. sight payment with a nominated bank and that nominated bank does
not pay;
iii. deferred payment with a nominated bank and that nominated bank
does not incur its deferred payment undertaking or, having incurred its
deferred payment undertaking, does not pay at maturity;
iv. acceptance with a nominated bank and that nominated bank does not
accept a draft drawn on it or, having accepted a draft drawn on it, does
not pay at maturity;
v. negotiation with a nominated bank and that nominated bank does not
negotiate.
NOTE: same principle for Article 8 Confirming Bank Undertaking
21
UCP 600 Article 7 UCP 500 sub-Article 9 (a)
iv. if the Credit provides for
Issuing Bank Undertaking negotiation - to pay without recourse to drawers
and/or bona fide holders, Draft(s) drawn by the
 Covered in Article 6 (c) Beneficiary and/or document(s) presented
under the Credit. A Credit should not be issued
 Issuing Bank irrevocably available by Draft(s) on the Applicant. If the
Credit nevertheless calls for Draft(s) on the
bound to honour as of Applicant, banks will consider such Draft(s) as
an additional document(s).
time of issuance.
 Reimbursement condition UCP 500 sub-Article 10 (d)
By nominating another bank, or by allowing for
appears in Article 7 (c) negotiation by any bank, or by authorising or
requesting
 Reimbursement due another bank to add its confirmation, the Issuing Bank
whether or not Draft or DP authorises such bank to pay, accept Draft(s) or
negotiate as the case may be, against documents
Undertaking prepaid or which appear on their face to be in compliance with the
purchased – see Article 12 terms and conditions of the Credit and undertakes to
reimburse such bank in accordance with the provisions
of these Articles.
22
UCP 600 Article 8 UCP 500 sub-Article 9 (b)
b A confirmation of an irrevocable Credit by
Confirming Bank Undertaking another bank (the "Confirming Bank") upon the
authorisation or request of the Issuing Bank,
 Definition of Confirmation constitutes a definite undertaking of the
Confirming Bank, in addition to that of the
and Confirming Bank Issuing Bank, provided that the stipulated
documents are presented to the Confirming
Bank or to any other Nominated Bank and that
 Confirming Bank – the terms and conditions of the Credit are
complied with:
Honours or Negotiates i. if the Credit provides for sight
payment - to pay at sight;
 Confirming Bank is ii. if the Credit provides for deferred
payment – to pay on the maturity date(s)
irrevocably bound to determinable in accordance with the stipulations
of the Credit;
honour or negotiate as of iii. if the Credit provides for
acceptance:
time it adds confirmation a. by the Confirming Bank - to accept
Draft(s) drawn by the Beneficiary on the
 Reimbursement due Confirming Bank and pay them at maturity,
or
whether or not Draft or
DPU prepaid or purchased
23
UCP 600 Article 8 UCP 500 sub-Articles 9 (b) and (c) (i) ii)
b. by another drawee bank - to accept and pay at
Confirming Bank Undertaking maturity Draft(s) drawn by the Beneficiary on
the Confirming Bank, in the event the drawee
 Covered in Article 6 (c) bank stipulated in the Credit does not accept
Draft(s) drawn on it, or to pay Draft(s) accepted
but not paid by such drawee bank at maturity;
iv. if the Credit provides for
negotiation - to negotiate without recourse to
 Reflects position if a drawers and/or bona fide holders, Draft(s)
drawn by the Beneficiary and/or document(s)
Nominated Bank does not presented under the Credit. A Credit should not
be issued available by Draft(s) on the Applicant.
act (see slide 21) If the Credit nevertheless calls for Draft(s) on
the Applicant, banks will consider such Draft(s)
as an additional document(s).
 Nominated Bank may or
may not be a confirming c. i. If another bank is authorised or
requested by the Issuing Bank to add its
confirmation to a Credit but is not prepared to
bank. do so, it must so inform the Issuing Bank
without delay.
 Refined wording in Article ii. Unless the Issuing Bank specifies
otherwise in its authorisation or request to add
8 (d) confirmation, the Advising Bank may advise the
Credit to the Beneficiary without adding its
confirmation.
24
Advising of Credits and Amendments a A Credit may be advised to a Beneficiary
through another bank (the "Advising Bank")
 Concept of 2nd Advising without engagement on the part of the Advising
Bank, but that bank, if it elects to advise the
Credit, shall take reasonable care to check the
Bank apparent authenticity of the Credit which it
advises. If the bank elects not to advise the
 Bank now “satisfies itself” Credit, it must so inform the Issuing Bank
without delay.
as to the apparent b If the Advising Bank cannot establish such
apparent authenticity it must inform, without
authenticity delay, the bank from which the instructions
appear to have been received that it has been
unable to establish the authenticity of the Credit
 Advice of credit or and if it elects nonetheless to advise the Credit
it must inform the Beneficiary that it has not
amendment “accurately been able to establish the authenticity of the
Credit.
reflects” the terms and
conditions of the credit or UCP 500 sub-Article 11 (b)
If a bank uses the services of an Advising Bank to
amendment have
the Credit advised to the Beneficiary, it must also use
 Now appears in Article 9 the services of the same bank for advising an
amendment(s).
(d)
25
UCP 600 Article 10 UCP 500 sub-Article 9 (d)
Amendments i. Except as otherwise provided by Article 48, an
irrevocable Credit can neither be amended nor
 Covered in Article 10 (a) cancelled without the agreement of the Issuing
Bank, the Confirming Bank, if any, and the
Beneficiary
ii. The Issuing Bank shall be irrevocably bound by

an amendment(s) issued by it from the time of
 Covered in Article 10 (b) the issuance of such amendment(s). A
Confirming Bank may extend its confirmation to
an amendment and shall be irrevocably bound
as of the time of its advice of the amendment.
A Confirming Bank may, however, choose to
advise an amendment to the Beneficiary without
extending its confirmation and if so, must
inform the Issuing Bank and the Beneficiary
without delay.
26
UCP 600 Article 10 UCP 500 sub-Article 9 (d)
iii. The terms of the original Credit (or a Credit
Amendments incorporating previously accepted
amendment(s)) will remain in force for the
 Covered in Article 10 (c) Beneficiary until the Beneficiary communicates
his acceptance of the amendment to the bank
that advised such amendment. The Beneficiary
Various other options should give notification of acceptance or
rejection of amendment(s). If the Beneficiary
were considered fails to give such notification, the tender of
documents to the Nominated Bank or Issuing
 Advice of acceptance or Bank, that conform to the Credit and to not yet
accepted amendment(s), will be deemed to be
rejection to be advised notification of acceptance by the Beneficiary of
such amendment(s) and as of that moment the
Credit will be amended.
 Partial acceptance of an
amendment = rejection iv. Partial acceptance of amendments contained in
one and the same advice of amendment is not
allowed and consequently will not be given any
 Time limits for acceptance effect.
or rejection will be
disregarded
27
Group Work
We have studied Articles 1 through 10 of UCP 600.
 In your Groups discuss the last session
 What did you understand?
 What was not clear or requires further clarification?
 Any other questions relating to the subjects covered

by Articles 1-10?
28
Teletransmitted and Pre-Advised a. i. When an Issuing Bank instructs an
Advising Bank by an authenticated
Credits and Amendments teletransmission to advise a Credit or an
amendment to a Credit, the teletransmission will
 Revised text to remove the be deemed to be the operative Credit
instrument or the operative amendment, and no
“should a mail mail confirmation should be sent. Should a mail
confirmation nevertheless confirmation nevertheless be sent, it will have
no effect and the Advising Bank will have no
be sent” obligation to check such mail confirmation
against the operative Credit instrument or the
 Where a mail confirmation operative amendment received by
teletransmission.
is the operative ii. If the teletransmission states "full
instrument, it must be details to follow" (or words of similar effect) or
states that the mail confirmation is to be the
issued in terms not operative Credit instrument or the operative
amendment, then the teletransmission will not
inconsistent with the be deemed to be the operative Credit
teletransmission. instrument or the operative amendment. The
Issuing Bank must forward the operative Credit
instrument or the operative amendment to such
Advising Bank without delay.
29
Teletransmitted and Pre-Advised b. If a bank uses the services of an Advising Bank
Credits and Amendments to have the Credit advised to the Beneficiary, it
must also use the services of the same bank for
 Covered in Article 9 (d) advising an amendment(s).
c. A preliminary advice of the issuance or

amendment of an irrevocable Credit (pre-
 Revised and shortened advice), shall only be given by an Issuing Bank
if such bank is prepared to issue the operative
text appears in Article 11 Credit instrument or the operative amendment
(b) thereto. Unless otherwise stated in such
preliminary advice by the Issuing Bank, an
Issuing Bank having given such pre-advice shall
be irrevocably committed to issue or amend the
Credit, in terms not inconsistent with the pre-
advice, without delay.
30
UCP 600 Article 12 UCP 500 sub-Article 10 (b) (ii)
Nomination Negotiation means the giving of value for Draft(s)
and/or document(s) by the bank authorised to
 Covered in Article 12 (c) negotiate. Mere examination of the documents without
but widened to include giving of value does not constitute a negotiation.
Honour UCP 500 sub-Article 10 (c)

Unless the Nominated Bank is the Confirming Bank,
nomination by the Issuing Bank does not constitute
 Covered in Article 12 (a) any
referencing Honour or undertaking by the Nominated Bank to pay, to incur a
deferred payment undertaking, to accept Draft(s), or to
Negotiation negotiate. Except where expressly agreed to by the
Nominated Bank and so communicated to the
Beneficiary, the Nominated Bank's receipt of and/or
 For new Article 12 (b) - see examination and/or forwarding of the documents does
slide 31 not make that bank liable to pay, to incur a deferred

payment undertaking, to accept Draft(s), or to
negotiate.
31
UCP 600 Article 12
Nomination
Article 12 (b):
By nominating a bank to accept a draft or incur a deferred
payment undertaking, an issuing bank authorizes that nominated
bank to prepay or purchase a draft accepted or a deferred
payment undertaking incurred by that nominated bank.
32
a If an Issuing Bank intends that the
Bank-to-Bank Reimbursement reimbursement to which a paying, accepting or
negotiating bank is entitled, shall be obtained by
Arrangements such bank (the "Claiming Bank"), claiming on
another party (the "Reimbursing Bank"), it shall
 Principle in Article 13 (a) is provide such Reimbursing Bank in good time
with the proper instructions or authorisation to
that the credit and b
honour such reimbursement claims.
Issuing Banks shall not require a Claiming Bank
reimbursement to supply a certificate of compliance with the
terms and conditions of the Credit to the
authorisation must c
Reimbursing Bank.
An Issuing Bank shall not be relieved from any
reference URR or Article of its obligations to provide reimbursement if
and when reimbursement is not received by the
13 (b) will apply. d.
Claiming Bank from the Reimbursing Bank.
The Issuing Bank shall be responsible to the
Claiming Bank for any loss of interest if
 Reimbursement reimbursement is not provided by the
Reimbursing Bank on first demand, or as
authorisation subject to otherwise specified in the Credit, or mutually
agreed, as the case may be.
Article 13 (b) must not
include an expiry date – to
bring in line with URR
33
Bank-to-Bank Reimbursement e. The Reimbursing Bank's charges should be for
the account of the Issuing Bank. However, in
Arrangements cases where the charges are for the account of
another party, it is the responsibility of the
 Article 13 (b) (iv) states Issuing Bank to so indicate in the original Credit
and in the reimbursement authorisation. In
that reimbursing bank cases where the Reimbursing Bank's charges
charges are for account of are for the account of another party they shall
be collected from the Claiming Bank when the
the issuing bank. If they Credit is drawn under. In cases where the
are for account of Credit is not drawn under, the Reimbursing
Bank's charges remain the obligation of the
beneficiary it must be Issuing Bank.
clearly indicated in the

credit and the
reimbursement
authorisation
34
a. Banks must examine all documents stipulated in
Standard for Examination of the Credit with reasonable care, to ascertain
whether or not they appear, on their face, to be
Documents in compliance with the terms and conditions of
the Credit. Compliance of the stipulated
 Applicable banks defined documents on their face with the terms and
conditions of the Credit, shall be determined by
international standard banking practice as
 “On their face” – sole reflected in these Articles. Documents which
appear on their face to be inconsistent with one
reference here another will be considered as not appearing on
their face to be in compliance with the terms
 Definition: Complying and conditions of the Credit.
Presentation Documents not stipulated in the Credit will not

be examined by banks. If they receive such
documents, they shall return them to the
 Check on the basis of the presenter or pass them on without
responsibility.
documents alone
 Covered in Article 14 (d)
- see slide 35
 Covered in Article 14 (g)
35
UCP 600 Article 14
Standard for Examination of Documents
Article 14 (d):
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, data in that
document, any other stipulated document or the credit.
36
Standard for Examination of b. The Issuing Bank, the Confirming Bank, if any,
or a Nominated Bank acting on their behalf,
Documents shall each have a reasonable time, not to
exceed seven banking days following the day of
 Removal of “reasonable receipt of the documents, to examine the
documents and determine whether to take up or
time” refuse the documents and to inform the party
from which it received the documents
 Maximum of 5 Banking accordingly.
Days
c. If a Credit contains conditions without stating
 Period of 5 Banking Days the document(s) to be presented in compliance
therewith, banks will deem such conditions as
not subject to any not stated and will disregard them.
upcoming event
 Covered in Article 14 (h)
37
Standard for Examination of When documents other than transport documents,
insurance documents and commercial invoices are
Documents called for, the Credit should stipulate by whom such
 Covered in Article 14 (f) documents are to be issued and their wording or data
content. If the Credit does not so stipulate, banks will
 Document must appear to accept such documents as presented, provided that
fulfil its function their data content is not inconsistent with any other
stipulated document presented.
UCP 500 Article 22

Unless otherwise stipulated in the Credit, banks will
 Principle extended to a accept a document bearing a date of issuance prior to
document may be dated that of the Credit, subject to such document being
presented within the time limits set out in the Credit
no later than the date of its and
presentation in these Articles.
38
Standard for Examination of Unless otherwise authorised in the Credit, banks will
only accept a transport document issued by a freight
Documents forwarder if it appears on its face to indicate:
 Article was not deemed to i. the name of the freight forwarder
as a carrier or multimodal transport operator
be necessary as UCP does and to have been signed or otherwise
authenticated by the freight forwarder as carrier
not define who has to or multimodal transport operator,
“issue” the transport or
ii. the name of the carrier or
document. Covered in multimodal transport operator and to have been
Article 14 (l) signed or otherwise authenticated by the freight
forwarder as a named agent for or on behalf of
the carrier or multimodal transport operator.
 Covered in Article 14 (k)

UCP 500 sub-Article 31 (iii)
and widened to any indicates as the consignor of the goods a party other
document than the Beneficiary of the Credit.
39
UCP 600 Article 14
Standard for Examination of Documents
Article 14 (j):
When the addresses of the beneficiary and the applicant appear
in any stipulated document, they need not be the same as those
stated in the credit or in any other stipulated document, but must
be within the same country as the respective addresses
mentioned in the credit. Contact details (telefax, telephone,
email and the like) stated as part of the beneficiary’s and the
applicant’s address will be disregarded. However, when the
address and contact details of the applicant appear as part of the
consignee or notify party details on a transport document subject
to articles 19, 20, 21, 22, 23, 24 or 25, they must be as stated in
the credit.
40
UCP 600 Article 14 UCP 500 sub-Article 37 (c)
Standard for Examination of The description of the goods in the commercial invoice
must correspond with the description in the Credit. In
Documents all other documents, the goods may be described in
 Second sentence removed general terms not inconsistent with the description of
the goods in the Credit.
from Commercial Invoice
Article and appears at UCP 500 sub-Article 43 (a)
Article 14 (e) In addition to stipulating an expiry date for presentation
of documents, every Credit which calls for a transport
document(s) should also stipulate a specified period of
 Default of 21 days applies time after the date of shipment during which
presentation must be made in compliance with the
where there is an original terms and conditions of the Credit. If no such period of
transport document to be time is stipulated, banks will not accept documents
presented to them later than 21 days after the date of
presented shipment. In any event, documents must be presented
not later than the expiry date of the Credit.
41
UCP 600 Article 15
Complying Presentation
Outlines the principle that Honour or Negotiation follows the

determination of a complying presentation i.e.,
Article 15 (b):
When a confirming bank determines that a presentation is
complying, it must honour or negotiate and forward the
documents to the issuing bank.
42
a When the Issuing Bank authorises another bank
Discrepant Documents, Waiver and to pay, incur a deferred payment undertaking,
accept Draft(s), or negotiate against documents
Notice which appear on their face to be in compliance
with the terms and conditions of the Credit, the
Issuing Bank and the Confirming Bank, if any,
are bound:
i. to reimburse the Nominated Bank
which has paid, incurred a deferred
payment undertaking, accepted Draft(s), or
negotiated,
ii. to take up the documents.
b Upon receipt of the documents the Issuing Bank

 Applicable banks defined and/or Confirming Bank, if any, or a Nominated
Bank acting on their behalf, must determine on
the basis of the documents alone whether or not
 Removal of ‘on their face’ they appear on their face to be in compliance
with the terms and conditions of the Credit. If
 “…. may refuse to Honour the documents appear on their face not to be in
compliance with the terms and conditions of the
Credit, such banks may refuse to take up the
or Negotiate”. documents.
43
c If the Issuing Bank determines that the
Discrepant Documents, Waiver and documents appear on their face not to be in
compliance with the terms and conditions of the
Notice Credit, it may in its sole judgment approach the
Applicant for a waiver of the discrepancy(ies).
 Applicable banks defined This does not, however, extend the period
mentioned in sub-Article 13 (b).
d. i. If the Issuing Bank and/or
 Maximum of 5 Banking Confirming Bank, if any, or a Nominated Bank
acting on their behalf, decides to refuse the
Days following day of documents, it must give notice to that effect by
telecommunication or, if that is not possible, by
presentation other expeditious means, without delay but no
later than the close of the seventh banking day
 Notice must state (1) bank following the day of receipt of the documents.
Such notice shall be given to the bank from
refuses, (2) each which it received the documents, or to the
Beneficiary, if it received the documents directly
from him.
discrepancy and (3) status ii. Such notice must state all
of the handling of discrepancies in respect of which the bank
refuses the documents and must also state
documents – see slide 44 whether it is holding the documents at the
disposal of, or is returning them to, the
presenter.
44
UCP 600 Article 16
Discrepant Documents, Waiver and Notice
Article 16 (c) (iii):
a) that the bank is holding the documents pending further
instructions from the presenter; or
b) that 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) that the bank is returning the documents; or
d) that the bank is acting in accordance with instructions previously
received from the presenter.
45
Discrepant Documents, Waiver and iii. The Issuing Bank and/or
Confirming Bank, if any, shall then be entitled
Notice to claim from the remitting bank refund, with
interest, of any reimbursement which has been
 Covered in Article 16 (g) made to that bank.
e. If the Issuing Bank and/or Confirming Bank, if

 Covered in Article 16 (f) any, fails to act in accordance with the
provisions of this Article and/or fails to hold the
documents at the disposal of, or return them to
the presenter, the Issuing Bank and/or
 If a bank has provided a Confirming Bank, if any, shall be precluded
from claiming that the documents are not in
notice of refusal and compliance with the terms and conditions of
the Credit.
chosen (a) or (b), it may
return the documents at
any time
46
Discrepant Documents, Waiver and f. If the remitting bank draws the attention of the
Issuing Bank and/or Confirming Bank, if any, to
Notice any discrepancy(ies) in the document(s) or
advises such banks that it has paid, incurred a
 This is not included in deferred payment undertaking, accepted
Draft(s) or negotiated under reserve or against
UCP 600. This is an indemnity in respect of such
considered to be a matter discrepancy(ies), the Issuing Bank and/or
Confirming Bank, if any, shall not be thereby
between beneficiary and relieved from any of their obligations under any
provision of this Article. Such reserve or
the nominated bank. A indemnity concerns only the relations between
confirming or issuing bank the remitting bank and the party towards whom
the reserve was made, or from whom, or on
still makes a decision on whose behalf, the indemnity was obtained.
the documents based on
Articles 14 and 16.
47
UCP 600 Article 17 UCP 500 sub-Article 20 (b)
Original Documents and Copies Unless otherwise stipulated in the Credit, banks will
also accept as an original document(s), a document(s)
 Based on concept in ICC produced or appearing to have been produced:
Decision of Original i. by reprographic, automated or
computerized systems;
Documents ii. as carbon copies;
provided that it is marked as original and, where
 Article 17 (a) makes clear necessary, appears to be signed.
that at least one of each

document must be an
original
48
UCP 600 Article 17 UCP 500 sub-Article 20 (c)
Original Documents and Copies c i. Unless otherwise stipulated in the
Credit, banks will accept as a copy(ies), a
 Article 17 (d) states that or not
document(s) either labelled copy
marked as an original - a copy(ies)
copies will be satisfied by need not be signed.
either originals or copies ii. Credits that require multiple
document(s) such as "duplicate", "two fold",
(copies would include "two copies" and the like, will be
satisfied by the presentation of one original
photocopies) and the remaining number in copies
except where the document itself
indicates otherwise.
 Covered in Article 17 (e)
with emphasis on
presentation of “at least
one original …..”
49
Commercial Invoice a. Unless otherwise stipulated in the Credit,
commercial invoices;
 Definition of Beneficiary i. must appear on their face to be
issued by the Beneficiary named in the Credit
 Definition of Applicant (except as provided in Article 48),
and
 New (iii) stating that ii. must be made out in the name of
invoice must be in the the Applicant (except as provided in sub-Article
48 (h)),
same currency as the and
credit iii. need not be signed.
 Old (iii) becomes (iv)
50
b. Unless otherwise stipulated in the Credit, banks
Commercial Invoice may refuse commercial invoices issued for
amounts in excess of the amount permitted by
 Emphasis changed that the Credit. Nevertheless, if a bank authorised to
pay, incur a deferred payment undertaking,
banks may accept an accept Draft(s), or negotiate under a Credit
accepts such invoices, its decision will be
binding upon all parties, provided that such
invoice for a greater value, bank has not paid, incurred a deferred payment
undertaking, accepted Draft(s) or negotiated for
provided it has not an amount in excess of that permitted by the
Credit.
honoured or negotiated for
an amount in excess of the c. The description of the goods in the commercial
invoice must correspond with the description in
credit the Credit. In all other documents, the goods
may be described in general terms not
inconsistent with the description of the goods in
 Covered in Article 18 (c) the Credit.
with second sentence now

appearing in Article 14 (e)
51
Group Work

by Articles 11-18?
52
a If a Credit calls for a transport document
Transport Document Covering at Least covering at least two different modes of
transport (multimodal transport), banks will,
Two Different Modes of Transport unless otherwise stipulated in the Credit, accept
a document, however named, which:
 Article 1 – exclude or modify i. appears on its face to indicate the
name of the carrier or multimodal transport
operator and to have been signed or otherwise
 Indicate name of carrier authenticated by:
- the carrier or multimodal transport
 On its face operator or a named agent for or on behalf of
the carrier or multimodal transport operator, or
 No reference to MTO – - the master or a named agent for
or on behalf of the master.
carrier or master only
Any signature or authentication of
 Authentication removed the carrier, multimodal transport operator or
master must be identified as carrier, multimodal
 Consistent signing and transport operator or master, as the case may
be. An agent signing or authenticating for the
carrier, multimodal transport operator or master
capacity details must also indicate the name and the capacity of
the party, i.e. carrier, multimodal transport
 No name of master operator or master, on whose behalf that agent
is acting,
and
53
ii. indicates that the goods have
Transport Document Covering at Least been dispatched, taken in charge or loaded on
board.
Two Different Modes of Transport Dispatch, taking in charge or
loading on board may be indicated by wording
 At the place stated in the to that effect on the multimodal transport
document and the date of issuance will be
credit deemed to be the date of dispatch, taking in
charge or loading on board and the date of
shipment. However, if the document indicates,
 Covered in 19 (a) (ii) by stamp or otherwise, a date of dispatch,
taking in charge or loading on board, such date
will be deemed to be the date of shipment,
and
 Revised text appears in iii. a. indicates the place of
taking in charge stipulated in the Credit which
Article 19 (a) (iii) – see slide may be different from the port, airport or place
of loading, and the place of final destination
53 stipulated in the Credit which may be different
from the port, airport or place of discharge,
and/or
b. contains the indication "intended"
or similar qualification in relation to the vessel
and/or port of loading and/or port of discharge,
and
54
UCP 600 Article 19
Transport Document Covering at Least Two Different Modes of Transport
Article 19 (a) (iii):
indicate the place of dispatch, taking in charge or shipment and the

place of final destination stated in the credit, even if:
a. the transport document states, in addition, a different place of

dispatch, taking in charge or shipment or place of final
destination,
or
b. the transport document contains the indication "intended" or
similar qualification in relation to the vessel, port of loading or
port of discharge.
55
iv. consists of a sole original
Transport Document Covering at Least multimodal transport document or, if issued in
more than one original, the full set as so issued,
Two Different Modes of Transport and
v. appears to contain all of the terms
and conditions of carriage, or some of such
terms and conditions by reference to a source
or document other than the multimodal transport
document (short form/blank back multimodal
transport document); banks will not examine the
contents of such terms and conditions,
and
vi. contains no indication that it is
subject to a charter party and/or no indication
 No reference to sail that the carrying vessel is propelled by sail only,
and
vii. in all other respects meets the
stipulations of the Credit.
 Not necessary due to
definition of Complying
Presentation
56
b. Even if the Credit prohibits transhipment, banks
Transport Document Covering at Least will accept a multimodal transport document
which indicates that transhipment will or may
Two Different Modes of Transport take place, provided that the entire carriage is
covered by one and the same multimodal
 See slide 56 for revised transport document.
transhipment clauses
57
UCP 600 Article 19
Transport Document Covering at Least Two Different Modes of
Transport
Articles 19 (b) and (c):
b. For the purpose of this article, transhipment means unloading from one
means of conveyance and reloading to another means of conveyance
(whether or not in different modes of transport) during the carriage from
the place of dispatch, taking in charge or shipment to the place of final
destination stated in the credit.
c. i. A transport document may indicate that the goods will or may
be transhipped provided that the entire carriage is covered by one and
the same transport document.
ii. A transport document indicating that transhipment will or may take
place is acceptable, even if the credit prohibits transhipment.
58
a If a Credit calls for a bill of lading covering a
Bill of Lading port-to-port shipment, banks will, unless
otherwise stipulated in the Credit, accept a
 Article 1 exclude or modify document, however named, which:
i. appears on its face to indicate the
name of the carrier and to have been signed or
 On its face otherwise authenticated by:
- the carrier or a named agent for or
 Indicate the carrier on behalf of the carrier, or
- the master or a named agent for
- see slide 58 or on behalf of the master.
 Authenticated removed the carrier or master must be identified as
carrier or master, as the case may be. An agent
signing or authenticating for the carrier or
 Consistent signing and master must also indicate the name and the
capacity of the party, i.e. carrier or master, on
capacity details whose behalf that agent is acting,
and
 No name of master ii. indicates that the goods have
been loaded on board, or shipped on a named
vessel.
 At the port of loading
stated in the credit
59
UCP 600 Article 20
Bill of Lading
Article 20 (a) (i):
i. indicate the name of the carrier and be signed by:
• the carrier or a named agent for or on behalf of the carrier, or
• the master or a named agent for or on behalf of the master.
Any signature by the carrier, master or agent must be identified
as that of the carrier, master or agent.
Any signature by an agent must indicate whether the agent has
signed for or on behalf of the carrier or for or on behalf of the
master.
NOTE: consistent style for all transport articles
60
Loading on board or shipment on a named
Bill of Lading vessel may be indicated by pre-printed wording on the
bill of lading that the goods have been loaded on board
 Covered in Article 20 (a) a named vessel or shipped on a named vessel, in
which case the date of issuance of the bill of lading will
(ii) be deemed to be the date of loading on board and the
date of shipment.
In all other cases loading on board a named
vessel must be evidenced by a notation on the bill of
lading which gives the date on which the goods have
been loaded on board, in which case the date of the on
board notation will be deemed to be the date of
shipment.
If the bill of lading contains the indication
"intended vessel", or similar qualification in relation to
 Covered in Article 20 (a) the vessel, loading on board a named vessel must be
evidenced by an on board notation on the bill of lading
(ii) which, in addition to the date on which the goods have
been loaded on board, also includes the name of the
vessel on which the goods have been loaded, even if
they have been loaded on the vessel named as the
"intended vessel".
61
If the bill of lading indicates a place of receipt or taking
Bill of Lading in charge different from the port of loading, the on
board notation must also include the port of loading
 Covered in Article 20 (a) stipulated in the Credit and the name of the vessel on
which the goods have been loaded, even if they have
(iii) been loaded on the vessel named in the bill of lading.
This provision also applies whenever loading on board
 Revised wording “If the the vessel is indicated by pre-printed wording on the bill
bill of lading does not of lading,
and
indicate the port of loading iii. indicates the port of loading and the port of
discharge stipulated in the Credit,
stated in the credit as the notwithstanding that it:
a. indicates a place of taking in charge
port of loading ….” different from the port of loading, and/or a place of
final destination different from the port of
discharge,
and/or
b. contains the indication "intended" or
similar qualification in relation to the port of
loading and/or port of discharge, as long as the
document also states the ports of loading and/or
discharge stipulated in the Credit,
and
62
Bill of Lading iv. consists of a sole original bill of lading or, if
issued in more than one original, the full set as
so issued,
and
v. appears to contain all of the terms and
conditions of carriage, or some of such terms
and conditions by reference to a source or
document other than the bill of lading (short
form/blank back bill of lading); banks will not
examine the contents of such terms and
conditions,
and
vi. contains no indication that it is subject to a
 No reference to sail charter party and/or no indication that the
carrying vessel is propelled by sail only,
and
 Not necessary due to vii. in all other respects meets the stipulations of
the Credit.
Presentation
63
Bill of Lading b For the purpose of this Article, transhipment
means unloading and reloading from one vessel
to another vessel during the course of ocean
carriage from the port of loading to the port of
 Covered in revised Article discharge stipulated in the Credit.
20 (b), (c) and (d) – see c Unless transhipment is prohibited by the terms
of the Credit, banks will accept a bill of lading
slide 63 which indicates that the goods will be
transhipped, provided that the entire ocean
carriage is covered by one and the same bill of
lading.
d Even if the Credit prohibits transhipment, banks
will accept a bill of lading which:
i. indicates that transhipment will
take place as long as the relevant cargo is
shipped in Container(s), Trailer(s) and/or
"LASH" barge(s) as evidenced by the bill of
lading, provided that the entire ocean carriage is
covered by one and the same bill of lading,
and/or
ii. incorporates clauses stating that
the carrier reserves the right to tranship.
64
UCP 600 Article 20
Bill of Lading
Articles 20 (b), (c) and (d):
b. For the purpose of this article, transhipment means unloading
from one vessel and reloading to another vessel during the
carriage from the port of loading to the port of discharge stated in
the credit.
c. i. A bill of lading may indicate that the goods will or may be
transhipped provided that the entire carriage is covered by one
and the same bill of lading.
ii. A bill of lading indicating that transhipment will or may
take place is acceptable, even if the credit prohibits
transhipment, if the goods have been shipped in a container,
trailer or LASH barge as evidenced by the bill of lading.
d. Clauses in a bill of lading stating that the carrier reserves the
right to tranship will be disregarded.
65
Non-Negotiable Sea Waybill
 Same comments apply as for Article 20 – Bill of

Lading.
66
a If a Credit calls for or permits a charter party bill
Charter Party Bill of Lading of lading, banks will, unless otherwise stipulated
in the Credit, accept a document, however
 Changed opening – named, which:
i. contains any indication that it is
“containing an indication subject to a charter party,
and
it is subject to a CP” ii. appears on its face to have been
signed or otherwise authenticated by:
 On its face - the master or a named agent for
or on behalf of the master, or
 Authenticated removed - the owner or a named agent for or
on behalf of the owner.
 New capacity/signer = the master or owner must be identified as
master or owner as the case may be. An agent
Charterer signing or
authenticating for the master or owner must also
 No name of master indicate the name and the capacity of the party,
i.e. master or owner, on whose behalf that
agent is acting,
and
67
iii. does or does not indicate the name of the
Charter Party Bill of Lading carrier,
and
 No equivalent in Article 22 iv. indicates that the goods have
been loaded on board or shipped on a named
 “..at the port of loading vessel.
stated in the credit ..” Loading on board or shipment on

a named vessel may be indicated by pre-printed
 Covered in Article 22 (a) wording on the bill of lading that the goods have
been loaded on board a named vessel or
shipped on a named vessel, in which case the
(ii) date of issuance of the bill of lading will be
deemed to be the date of loading on board and
the date of shipment.
In all other cases loading on board

a named vessel must be evidenced by a
notation on the bill of lading which gives the
date on which the goods have been loaded on
board, in which case the date of the on board
notation will be deemed to be the date of
shipment,
and
68
Charter Party Bill of Lading v. indicates the port of loading and
the port of discharge stipulated in the Credit,
 Geographical or region as and
vi. consists of a sole original bill of
port of discharge is lading or, if issued in more than one original, the
acceptable full set as so issued,
and
 Reference to sail is vii. contains no indication that the
carrying vessel is propelled by sail only,
deleted and
 Not necessary due to viii. in all other respects meets the
Presentation b Even if the Credit requires the presentation of a
charter party contract in connection with a
charter party bill of lading, banks will not
examine such charter party contract, but will
 Refined text in Article 22 pass it on without responsibility on their part.
(b)
69
a If a Credit calls for an air transport document,
Air Transport Document banks will, unless otherwise stipulated in the
Credit, accept a document, however named,
 Article 1 exclude or modify which:
i. appears on its face to indicate the
 On its face name of the carrier and to have been signed or
otherwise authenticated by:
 Authenticated removed - the carrier, or
- a named agent for or on behalf of
 Indicate the name of the the carrier.
carrier Any signature or authentication of
the carrier must be identified as carrier. An
agent signing or authenticating for the carrier
 Signing capacities shown must also indicate the name and the capacity of
the party, i.e. carrier, on whose behalf that
in Article 23 (a) (i) agent is acting,
and
 Covered in Article 23 (a) ii. indicates that the goods have
(ii) been accepted for carriage,
and
70
iii. where the Credit calls for an actual
Air Transport Document date of dispatch, indicates a specific notation of
such date, the date of dispatch so indicated on
 Date in a notation = date of the air transport document will be deemed to be
the date of shipment.
shipment (whether
For the purpose of this Article, the
requested by the credit or information appearing in the box on the air
transport document (marked "For Carrier Use
not) Only" or similar expression) relative to the flight
number and date will not be considered as a
specific notation of such date of dispatch.
 Any other information,
outside the notation, will In all other cases, the date of
issuance of the air transport document will be
not be considered for deemed to be the date of shipment,
and
determining the date of iv. indicates the airport of departure
and the airport of destination stipulated in the
shipment Credit,
and
 Covered in Article 22 (a)
(iv)
71
Air Transport Document v. appears to be the original for consignor/shipper
even if the Credit stipulates a full set of
 Covered in Article 23 (a) originals, or similar expressions,
and
(v) vi. appears to contain all of the terms and
conditions of carriage, or some of such terms
 Covered in Article 23 (a) and conditions, by reference to a source or
(vi) document other than the air transport
document; banks will not examine the contents
 Not necessary due to of such terms and conditions,
and
definition of Complying vii. in all other respects meets the stipulations of
Presentation the Credit.
72
Air Transport Document b. For the purpose of this Article, transhipment
means unloading and reloading from one
 Covered in Article 23 (b) aircraft to another aircraft during the course of
carriage from the airport of departure to the
and (c) – see slide 72 airport of destination stipulated in the Credit.
c. Even if the Credit prohibits transhipment, banks

will accept an air transport document which
indicates that transhipment will or may take
place, provided that the entire carriage is
covered by one and the same air transport
document.
73
UCP 600 Article 23
Air Transport Document
Articles 23 (b) and (c):
b. For the purpose of this article, transhipment means unloading

from one aircraft and reloading to another aircraft during the
carriage from the airport of departure to the airport of destination
stated in the credit.
c. i. An air transport document may indicate that the goods
will or may be transhipped, provided that the entire carriage is
covered by one and the same air transport document.
ii. An air transport document indicating that transhipment
will or may take place is acceptable, even if the credit prohibits
transhipment.
74
a If a Credit calls for a road, rail, or inland
Road, Rail or Inland Waterway waterway transport document, banks will,
unless otherwise stipulated in the Credit, accept
Transport Document a document of the type called for, however
named, which:
 Article 1 exclude or modify i. appears on its face to indicate the
name of the carrier and to have been signed or
otherwise authenticated by the carrier or a
 On its face named agent for or on behalf of the carrier
and/or to bear a reception stamp or other
 Authenticated removed indication of receipt by the carrier or a named
agent for or on behalf of the carrier.
 Article 24 (a) (i) outlines Any signature, authentication,
reception stamp or other indication of receipt of
the carrier, must be identified on its face as that
the signing requirements of the carrier. An agent signing or authenticating
for the carrier, must also indicate the name and
and capacity identification the capacity of the party, i.e. carrier, on whose
behalf that agent is acting,
and
75
ii. indicates that the goods have been received for
Road, Rail or Inland Waterway shipment, dispatch or carriage or wording to this
effect. The date of issuance will be deemed to
Transport Document be the date of shipment unless the transport
document contains a reception stamp, in which
 Revised wording to case the date of the reception stamp will be
deemed to be the date of shipment,
capture – reception stamp, and
iii. indicates the place of shipment
date of receipt or date of and the place of destination stipulated in the
Credit,
shipment and
iv. in all other respects meets the
 Covered in Article 24 (a) stipulations of the Credit.
b In the absence of any indication on the transport
(iii) document as to the numbers issued, banks will
accept the transport document(s) presented as
 Not required due to constituting a full set. Banks will accept as
original(s) the transport document(s) whether
marked as original(s) or not.
Presentation
 Covered in Article 24 (c)
76
UCP 600 Article 24
Road, Rail or Inland Waterway Transport Document
Article 24 (b) – new provisions:
i. A road transport document must appear to be the original for

consignor or shipper or bear no marking indicating for whom the
document has been prepared.
ii. A rail transport document marked “duplicate” will be accepted as
an original.
iii. A rail or inland waterway transport document will be accepted as
an original whether marked as an original or not.
77
Road, Rail or Inland Waterway c. For the purpose of this Article, transhipment
means unloading and reloading from one
Transport Document means of conveyance to another means of
conveyance, in different modes of transport,
 Changed to reflect during the course of carriage from the place of
shipment to the place of destination stipulated in
transhipment must occur the Credit.
within the same mode – d. Even if the Credit prohibits transhipment, banks
will accept a road, rail, or inland waterway
otherwise Article 19 transport document which indicates that
applies transhipment will or may take place, provided
that the entire carriage is covered by one and
 Covered in Article 24 (e) – the same transport document and within the
same mode of transport.
see slide 77
78
UCP 600 Article 24
Road, Rail or Inland Waterway Transport Document
Articles 24 (e) (i) and (ii):
i. A road, rail or inland waterway transport document may indicate

that the goods will or may be transhipped provided that the
entire carriage is covered by one and the same transport
document.
ii. A road, rail or inland waterway transport document indicating
that transhipment will or may take place is acceptable, even if
the credit prohibits transhipment.
79
Courier Receipt, Post Receipt or a If a Credit calls for a post receipt or certificate of
posting, banks will, unless otherwise stipulated
Certificate of Posting in the Credit, accept a post receipt or certificate
of posting which:
 Article 25 (c) covers the i. appears on its face to have been
dispatch by post stamped or otherwise authenticated and dated
in the place from which the Credit stipulates the
goods are to be shipped or dispatched and such
date will be deemed to be the date of shipment
or dispatch,
and
 Not necessary due to ii. in all other respects meets the
Presentation
80
b If a Credit calls for a document issued by a
Courier Receipt, Post Receipt or courier or expedited delivery service evidencing
receipt of the goods for delivery, banks will,
Certificate of Posting unless otherwise stipulated in the Credit, accept
a document, however named, which:
 Removal of expedited i. appears on its face to indicate the
name of the courier/service, and to have been
delivery service stamped, signed or otherwise authenticated by
such named courier/service (unless the Credit
specifically calls for a document issued by a
 Covering receipt of goods named Courier/Service, banks will accept a
document issued by any Courier/Service),
for transport and
ii. indicates a date of pick-up or of
 Article 1 exclude or modify receipt or wording to this effect, such date
being deemed to be the date of shipment or
 On its face dispatch,
and
 Authenticated removed iii. in all other respects meets the
 Not necessary due to
Presentation
81
UCP 600 Article 26 UCP 500 sub-Article 31 (i) and (ii)
Unless otherwise stipulated in the Credit, banks will
“On Deck”, “Shipper’s Load and accept a transport document which:
Count”, “Said by Shipper to Contain” i. does not indicate, in the case of
carriage by sea or by more than one means of
and Charges Additional to Freight conveyance including carriage by sea, that the
goods are or will be loaded on deck.
Nevertheless, banks will accept a transport
 Article 1 exclude or modify document which contains a provision that the
goods may be carried on deck, provided that it
 Change of emphasis in does not specifically state that they are or will
be loaded on deck,
opening sentence “A bank and/or
ii. bears a clause on the face thereof
will only accept a clean such as "shipper's load and count" or "said by
shipper to contain" or words of similar effect,
transport document”.
UCP 500 sub-Article 33 (d)
 Covered in Article 26 (b) Banks will accept transport documents bearing
reference by stamp or otherwise to costs additional to
 Covered in Article 26 (c) the freight, such as costs of, or disbursements incurred
in connection with, loading, unloading or similar
operations, unless the conditions of the Credit
specifically prohibit such reference.
82
Clean Transport Document a. A clean transport document is one which bears
no clause or notation which expressly declares
 Addition: A bank will only a defective condition of the goods and/or the
packaging.
accept a clean transport
document b. Banks will not accept transport documents
bearing such clauses or notations unless the
 The word “clean” need not Credit expressly stipulates the clauses or
notations which may be accepted.
appear on a transport
document c. Banks will regard a requirement in a Credit for a
transport document to bear the clause "clean on
 Not necessary due to board" as complied with if such transport
document meets the requirements of this Article
definition of Complying and of Articles 23, 24, 25, 26, 27, 28 or 30.
Presentation
83
Group Work

by Articles 19-27?
84
a. Insurance documents must appear on their face
Insurance Document and Coverage to be issued and signed by insurance
companies or underwriters or their agents.
 Insurance documents are
b If the insurance document indicates that it has
described including been issued in more than one original, all the
originals must be presented unless otherwise
declaration under open authorised in the Credit.
cover c. Cover notes issued by brokers will not be

accepted, unless specifically authorised in the
 Agents or Proxies Credit.
 Signing conditions similar d. Unless otherwise stipulated in the Credit, banks

will accept an insurance certificate or a
to transport documents declaration under an open cover pre-signed by
insurance companies or underwriters or their
agents. If a Credit specifically calls for an
 No cover notes accepted insurance certificate or a declaration under an
open cover, banks will accept, in lieu thereof, an
insurance policy.
85
e. Unless otherwise stipulated in the Credit, or
Insurance Document and Coverage unless it appears from the insurance document
that the cover is effective at the latest from the
 Covered in Article 28 (e) date of loading on board or dispatch or taking in
charge of the goods, banks will not accept an
insurance document which bears a date of
 New condition – LC stating issuance later than the date of loading on board
or dispatch or taking in charge as indicated in
“insurance for 110%” = such transport document.
f. i. Unless otherwise stipulated in the
minimum amount of Credit, the insurance document must be
expressed in the same currency as the Credit.
insurance coverage ii. Unless otherwise stipulated in the
Credit, the minimum amount for which the
 Covered in Article 28 (f) (ii) insurance document must indicate the
insurance cover to have been effected is the
CIF (cost, insurance and freight (... "named port
 Article 28 (f) (iii) insurance of destination")) or CIP (carriage and insurance
paid to (..."named place of destination")) value
must be covered at least of the goods, as the case may be, plus 10%, but
only when the CIF or CIP value can be
between the two determined from the documents on their face.
Otherwise, banks will accept as such minimum
places/ports/airports amount 110% of the amount for which payment,
acceptance or negotiation is requested under
stated in the credit the Credit, or 110% of the gross amount of the
invoice, whichever is the greater.
86
a. Credits should stipulate the type of insurance
Insurance Document and Coverage required and, if any, the additional risks which
are to be covered. Imprecise terms such as
 Covered in Article 28 (g) "usual risks" or "customary risks" shall not be
used; if they are used, banks will accept
insurance documents as presented, without
responsibility for any risks not being covered.
b. Failing specific stipulations in the Credit, banks
 Banks will accept will accept insurance documents as presented,
without responsibility for any risks not being
insurance documents with covered.
c. Unless otherwise stipulated in the Credit, banks
any exclusion clause will accept an insurance document which
indicates that the cover is subject to a franchise
or an excess (deductible).
 Covered in Article 28 (j)
UCP 500 Article 36
Where a Credit stipulates "insurance against all risks",
 Covered in Article 28 (h) banks will accept an insurance document which
contains any "all risks" notation or clause, whether or
not bearing the heading "all risks", even if the
insurance
document indicates that certain risks are excluded,
without responsibility for any risk(s) not being covered.
87
a. If the expiry date of the Credit and/or the last
Extension of Expiry Date or Last Day day of the period of time for presentation of
documents stipulated by the Credit or applicable
for Presentation by virtue of Article 43 falls on a day on which
the bank to which presentation has to be made
is closed for reasons other than those referred
 No material change from to in Article 17, the stipulated expiry date and/or
the last day of the period of time after the date
UCP 500 of shipment for presentation of documents, as
the case may be, shall be extended to the first
 Covered in Article 29 (a) b.
following day on which such bank is open.
The latest date for shipment shall not be
extended by reason of the extension of the
expiry date and/or the period of time after the
date of shipment for presentation of documents
 Covered in Article 29 (c) in accordance with sub-Article (a) above. If no
such latest date for shipment is stipulated in the
Credit or amendments thereto, banks will not
accept transport documents indicating a date of
shipment later than the expiry date stipulated in
the Credit or amendments thereto.
c. The bank to which presentation is made on
 Covered in Article 29 (b) – such first following business day must provide a
statement that the documents were presented
within the time limits extended in accordance
to appear on schedule with sub-Article 44(a) of the Uniform Customs
and Practice for Documentary Credits, 1993
Revision, ICC Publication No. 500.
88
a. The words "about", "approximately", "circa" or
Tolerance in Credit Amount, Quantity similar expressions used in connection with the
amount of the Credit or the quantity or the unit
and Unit Prices price stated in the Credit are to be construed as
allowing a difference not to exceed 10% more
 Deletion of “circa” or 10% less than the amount or the quantity or
the unit price to which they refer.
b. Unless a Credit stipulates that the quantity of
 Article 1 exclude or modify the goods specified must not be exceeded or
reduced, a tolerance of 5% more or 5% less will
be permissible, always provided that the amount
of the drawings does not exceed the amount of
the Credit. This tolerance does not apply when
the Credit stipulates the quantity in terms of a
stated number of packing units or individual
items.
c. Unless a Credit which prohibits partial
 Article 1 exclude or modify shipments stipulates otherwise, or unless sub-
Article (b) above is applicable, a tolerance of 5%
less in the amount of the drawing will be
 Principle applies whether permissible, provided that if the Credit stipulates
the quantity of the goods, such quantity of
partial shipments allowed goods is shipped in full, and if the Credit
stipulates a unit price, such price is not reduced.
or not This provision does not apply when
expressions referred to in sub-Article (a) above
are used in the Credit.
89
Partial Drawings or Shipments a. Partial drawings and/or shipments are allowed,
unless the Credit stipulates otherwise.
 Article 1 exclude or modify b. Transport documents which appear on their
face to indicate that shipment has been made
on the same means of conveyance and for the
same journey, provided they indicate the same
 Clarification given in destination, will not be regarded as covering
partial shipments, even if the transport
Article 31 (b) that in the documents indicate different dates of shipment
and/or different ports of loading, places of
case of multiple taking in charge, or despatch.
presentations on same c. Shipments made by post or by courier will not
be regarded as partial shipments if the post
mode, latest date = date of receipts or certificates of posting or courier's
shipment receipts or dispatch notes appear to have been
stamped, signed or otherwise authenticated in
 New rule where more than the place from which the Credit stipulates the
goods are to be dispatched, and on the same
one mode used date.
 Covered in Article 31 (c)
90
Instalment Drawings or Shipments If drawings and/or shipments by instalments
within given periods are stipulated in the Credit
 Article 1 exclude or modify and any instalment is not drawn and/or shipped
within the period allowed for that instalment,
 Article 3 Interpretations – the Credit ceases to be available for that and
singular/plural any subsequent instalments, unless otherwise
stipulated in the Credit.
 No change from UCP 500
91
Hours of Presentation Banks are under no obligation to accept
presentation of documents outside their
 Article 3 Interpretations – banking hours.
singular/plural
 No change from UCP 500
92
Disclaimer on Effectiveness of Banks assume no liability or responsibility for
the form, sufficiency, accuracy, genuineness,
Documents falsification or legal effect of any document(s),
 Article 3 Interpretations – or for the general and/or particular conditions
singular/plural stipulated in the document(s) or superimposed
thereon; nor do they assume any liability or
 Addition of “services or responsibility for the description, quantity,
performance” to bring in weight, quality, condition, packing, delivery,
value or existence of the goods represented by
line with Article 5 any document(s), or for the good faith or acts
and/or omissions, solvency, performance or
standing of the consignors, the carriers, the
forwarders, the consignees or the insurers of
the goods, or any other person whomsoever.
93
Disclaimer on Transmission and Banks assume no liability or responsibility for
the consequences arising out of delay and/or
Translation loss in transit of any message(s), letter(s) or
 The two sentences that document(s), or for delay, mutilation or other
error(s) arising in the transmission of any
make up UCP 500 Article telecommunication. Banks assume no liability
16 have been split or responsibility for errors in translation and/or
interpretation of technical terms, and reserve
 New addition to this rule the right to transmit Credit terms without
covering loss of translating them.
documents in transit – see
slide 92
94
UCP 600 Article 35
Disclaimer on Transmission and Translation
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 bank and the issuing
bank or confirming bank, or between the confirming bank and the
issuing bank.
95
Force Majeure Banks assume no liability or responsibility for
the consequences arising out of the interruption
 Addition of “Acts of of their business by Acts of God, riots, civil
Terrorism” as a force commotions, insurrections, wars or any other
causes beyond their control, or by any strikes
majeure event. or lockouts. Unless specifically authorised,
 “Unless specifically banks will not, upon resumption of their
business, pay, incur a deferred payment
authorised” has been undertaking, accept Draft(s) or negotiate under
deleted Credits which expired during such interruption of
their business.
 ICC NC’s were offered this
version or one allowing 5
days after bank re-opened.
This version was chosen
96
a. Banks utilizing the services of another bank or
Disclaimer for Acts of an Instructed other banks for the purpose of giving effect to
the instructions of the Applicant do so for the
Party account and at the risk of such Applicant.
b. Banks assume no liability or responsibility
 “Banks” has been defined should the instructions they transmit not be
carried out, even if they have themselves taken
as the Issuing Bank or the initiative in the choice of such other bank(s).
c. i. A party instructing another party to
Advising Bank perform services is liable for any charges,
including commissions, fees, costs or expenses
 In UCP 500 Article 18 (c), incurred by the instructed party in connection
with its instructions.
the word “party” has been ii. Where a Credit stipulates that
such charges are for the account of a party
replaced with “bank” and other than the instructing party, and charges
cannot be collected, the instructing party
“beneficiary” respectively remains ultimately liable for the payment
thereof.
 New rule covering issuance d. The Applicant shall be bound by and liable to
indemnify the banks against all obligations and
of LCs with request for responsibilities imposed by foreign laws and
usages.
charges to be collected in
advance
97
a. A transferable Credit is a Credit under which the
Transferable Credits Beneficiary (First Beneficiary) may request the
bank authorised to pay, incur a deferred
 (c) now forms the basis for payment undertaking, accept or negotiate (the
"Transferring Bank"), or in the case of a freely
Article 38 (a) as this is the negotiable Credit, the bank specifically
authorised in the Credit as a Transferring Bank,
to make the Credit available in whole or in part
principle rule to one or more other Beneficiary(ies) (Second
Beneficiary(ies)).
 Definitions have been
b. A Credit can be transferred only if it is expressly
given for Transferable designated as "transferable" by the Issuing
Bank. Terms such as "divisible", "fractionable",
Credit, Transferring Bank "assignable", and "transmissible" do not render
the Credit transferable. If such terms are used
and Transferred Credit – they shall be disregarded.
see slide 97 c. The Transferring Bank shall be under no
obligation to effect such transfer except to the
extent and in the manner expressly consented
to by such bank.
98
UCP 600 Article 38
Transferable Credits
Article 38 (b):
 Transferable credit means a credit that specifically states it is
“transferable”. A transferable credit may be made available in
whole or in part to another beneficiary (“second beneficiary”) at
the request of the beneficiary (“first beneficiary”).
 Transferring bank means a nominated bank that transfers the
credit or, in a credit available with any bank, a bank that is
specifically authorized by the issuing bank to transfer and that
transfers the credit. An issuing bank may be a transferring bank.
 Transferred credit means a credit that has been made available
by the transferring bank to a second beneficiary.
99
d. At the time of making a request for transfer and
Transferable Credits prior to transfer of the Credit, the First
Beneficiary must irrevocably instruct the
Transferring Bank whether or not he retains the
 Covered in Article 38 (e). right to refuse to allow the Transferring Bank to
advise amendments to the Second
No longer a requirement Beneficiary(ies). If the Transferring Bank
consents to the transfer under these conditions,
for “irrevocable” it must, at the time of transfer, advise the
Second Beneficiary(ies) of the First
instructions regarding Beneficiary's instructions regarding
amendments.
amendments e. If a Credit is transferred to more than one
Second Beneficiary(ies), refusal of an
 Covered in Article 38 (f) amendment by one or more Second
Beneficiary(ies) does not invalidate the
acceptance(s) by the other Second Bene-
ficiary(ies) with respect to whom the Credit will
be amended accordingly. With respect to the
Second Beneficiary(ies) who rejected the
amendment, the Credit will remain unamended.
f. Transferring Bank charges in respect of
 Covered in Article 38 (c) transfers including commissions, fees, costs or
expenses are payable by the First Beneficiary,
unless otherwise agreed. If the Transferring
Bank agrees to transfer the Credit it shall be
under no obligation to effect the transfer until
such charges are paid.
100
g. Unless otherwise stated in the Credit, a
Transferable Credits transferable Credit can be transferred once
only. Consequently, the Credit cannot be
 Article 1 exclude or modify transferred at the request of the Second
Beneficiary to any subsequent Third
Beneficiary. For the purpose of this Article, a
 Covered in Article 38 (d) retransfer to the First Beneficiary does not
constitute a prohibited transfer.
Fractions of a transferable Credit (not exceeding
in the aggregate the amount of the Credit) can
be transferred separately, provided partial
shipments/drawings are not prohibited, and the
aggregate of such transfers will be considered
as constituting only one transfer of the Credit.
h. The Credit can be transferred only on the terms
 Covered in Article 38 (g) – and conditions specified in the original Credit,
with the exception of:
on the terms and -
-
the amount of the Credit,
any unit price stated therein,
conditions specified - the expiry date,
- the last date for presentation of
“including confirmation” documents in accordance with Article 43,
- the period for shipment,
any or all of which may be reduced or curtailed.
101
The percentage for which insurance cover must
Transferable Credits be effected may be increased in such a way as
to provide the amount of cover stipulated in the
 Covered in Article 38 (g) original Credit, or these Articles.
 New wording in (g) such In addition, the name of the First Beneficiary
can be substituted for that of the Applicant, but
requirement must be if the name of the Applicant is specifically
required by the original Credit to appear in any
document(s) other than the invoice, such
reflected in the transferred requirement must be fulfilled.
credit i. The First Beneficiary has the right to substitute
his own invoice(s) (and Draft(s)) for those of the
Second Beneficiary(ies), for amounts not in
excess of the original amount stipulated in the
 Covered in Article 38 (h) Credit and for the original unit prices if stipulated
in the Credit, and upon such substitution of
invoice(s) (and Draft(s)) the First Beneficiary
can draw under the Credit for the difference, if
any, between his invoice(s) and the Second
Beneficiary's(ies') invoice(s).
102
Transferable Credits When a Credit has been transferred and the
First Beneficiary is to supply his own invoice(s)
 Revised text to reflect that (and Draft(s)) in exchange for the Second Bene-
ficiary's(ies') invoice(s) (and Draft(s)) but fails to
in the event of do so on first demand, the Transferring Bank
has the right to deliver to the Issuing Bank the
discrepancies in documents received under the transferred
substituted documents, 1st Credit, including the Second Beneficiary's(ies')
invoice(s) (and Draft(s)) without further
beneficiary must replace responsibility to the First Beneficiary.
on demand or 2nd j. The First Beneficiary may request that payment
beneficiary documents or negotiation be effected to the Second
used. Beneficiary(ies) at the place to which the Credit
has been transferred up to and including the
expiry date of the Credit, unless the original
 Article 1 exclude or modify Credit expressly states that it may not be made
available for payment or negotiation at a place
 New (k) documents must other than that stipulated in the Credit. This is
be sent to the transferring without prejudice to the First Beneficiary's right
to substitute subsequently his own invoice(s)
bank (and Draft(s)) for those of the Second
Beneficiary(ies) and to claim any difference due
to him.
103
Assignment of Proceeds The fact that a Credit is not stated to be
transferable shall not affect the Beneficiary's
right to assign any proceeds to which he may
 No change from UCP 500 be, or may become, entitled under such Credit,
in accordance with the provisions of the
applicable law. This Article relates only to the
assignment of proceeds and not to the
assignment of the right to perform under the
Credit itself.
104
Group Work

by Articles 28-39?
105
UCP 600 – An Overview
Thank You
Contact Collyer Consulting LLP

Email : gary@collyerconsulting.com
Mobile: +44 7960 236893
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UCP 600:

Correct Application and Interpretation

 Need to review ICC Opinions, Decisions, DOCDEX cases and

 Seventeen Articles have caused none, one or two Opinions

 Need to consider incorporation of URR525, ISP98 and eUCP

 Drafting Group established with 9 members

 Consulting Group established with 41 members from 26

 Drafting Group have met on 15 occasions

 Over 5000 individual comments received and reviewed

 Approved unanimously on 25 October 2006

Content of UCP 500 Articles 2, 6, 9, 10, 20, 21, 22, 30,

 Article 9 Advising of Credits and Amendments

 Article 15 Complying Presentation

 Article 17 Original Documents and Copies

 Applicant the party on whose request the credit is issued.

 Banking Day a day on which a bank is regularly open at the

 Complying Presentation a presentation that is in

the purchase by the nominated bank of drafts (drawn on a bank

 Presentation either the delivery of documents under a credit to

 Presenter a beneficiary, bank or other party that makes a

 Where applicable, words in the singular include the plural and

 Banks deal with

ii. The Issuing Bank shall be irrevocably bound by

We have studied Articles 1 through 10 of UCP 600.

 In your Groups discuss the last session

 What did you understand?

 What was not clear or requires further clarification?

 Any other questions relating to the subjects covered

c. A preliminary advice of the issuance or

Honour UCP 500 sub-Article 10 (c)

slide 31 not make that bank liable to pay, to incur a deferred

clearly indicated in the

Presentation Documents not stipulated in the Credit will not

UCP 500 Article 22

 Covered in Article 14 (k)

Outlines the principle that Honour or Negotiation follows the

b Upon receipt of the documents the Issuing Bank

e. If the Issuing Bank and/or Confirming Bank, if

 Article 17 (a) makes clear necessary, appears to be signed.

that at least one of each

 Old (iii) becomes (iv)

with second sentence now

We have studied Articles 11 through 18 of UCP 600.

 In your Groups discuss the last session

 What did you understand?

 What was not clear or requires further clarification?

 Any other questions relating to the subjects covered

indicate the place of dispatch, taking in charge or shipment and the

a. the transport document states, in addition, a different place of

 Same comments apply as for Article 20 – Bill of

stated in the credit ..” Loading on board or shipment on

In all other cases loading on board

c. Even if the Credit prohibits transhipment, banks

b. For the purpose of this article, transhipment means unloading

i. A road transport document must appear to be the original for

i. A road, rail or inland waterway transport document may indicate

We have studied Articles 19 through 27 of UCP 600.

 In your Groups discuss the last session

 What did you understand?

 What was not clear or requires further clarification?

 Any other questions relating to the subjects covered

cover c. Cover notes issued by brokers will not be

 Signing conditions similar d. Unless otherwise stipulated in the Credit, banks