Documentary Credit 2007 revision

UCP 600

정용혁 11. July . 200

20099

1
1
 Effective July 1, 2007

2
2
UCP 600 – General Provisions and Definitions

Article 1 – Application of UCP

UCP 600 are rules

Expressly indicates in the credit

Applicable also to standby credit

Binding on all parties unless expressly modified or
excluded

3
3
 Examples of express indication: UCP 600 1

Use of SWIFT:

40E: Applicable Rules

UCP LATEST VERSION

Use of telex or letter:

This credit is subject to the Uniform Customs and Practice

for Documentary Credits,
Credits, 2007 Revision, ICC Publication
No. 600.

This credit is subject to UCP 600

4
4
 Examples of an exclusion or modification to a rule: UCP 600 1

Contrary to article 32 of the UCP, this

this credit remains
remains
valid for subsequent install
installments despite any shipment
or drawing not made within the period allowed.

Sub--Article 28(c) does not apply.

Sub

Documents must not be dated earlier than the date of

the issuance of this credit.

5
5
UCP 600 – General Provisions and Definitions

Article 2 – Definitions

Certain terms are defined, so that they provide references when

such terms are used in the articles

A Advising bank H Honour

Applicant
I Issuing bank
B Banking day
N Negotiation
Beneficiary
Nominated bank
C Complying presentation
P Presentation
Confirmation
Presenter
Confirming bank
Credit

6
6
 Banking Day UCP 600 2

Day on which a bank is regularly open for performance of an act

subject to these rules

Trade Dept.
SATURDAY

Banking Hall

7
7
 Complying Presentation UCP 600 2

Presentation in accordance with

Terms & conditions of the credit

Applicable UCP provisions

International standard banking practice

What is international standard

banking practice ?
Is it referring to the “ISBP” ?

8
8
 Honour & Negotiation UCP 600 2

Honour

For credit available by +

Sight payment Pay at sight

Deferred payment Incur deferred payment undertaking
Pay at maturity

Acceptance Accept bill of exchange
Pay at maturity

Negotiation

Purchase by the nominated bank of drafts (drawn on another
?? bank) and/or documents under a complying presentation,

By advancing or agreeing to advance funds to beneficiary, on
or before the banking day on which reimbursement is due to the
nominated bank.
9
9
 Nominated Bank; Presentation; Presenter UCP 600 2

The bank with which the credit is available, or any bank in the case
of a freely available credit

Presentation

Delivery of documents to issuing bank or nominated bank; or

The documents so delivered

Presenter

Party that makes a presentation

10
10
UCP 600 – General Provisions and Definitions

Article 3 – Interpretations

Where applicable, words in the singular include the plural

and vice versa.

No more “(s)” - “Document” instead of “Document(s)”

A credit is irrevocable even if no indication to that effect.

For determining maturity date, the words “from” and “after”

exclude the date mentioned

30 days from shipment date = 30 days after shipment date

Shipment date: 1 AUG 2007 Maturity date: 31 AUG 2007

11
11
 Interpretations UCP 600 3

A documents 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.

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

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.
12
12
 Interpretations UCP 600 3

Unless required to be used in a document, words such as “prompt”,

“immediately” or “as soon as possible” will be disregarded.

Expression “on or about” or similar is a stipulation that an event is to
occur five calendar days before until five calendar days after the
specified date, both start and end dates included.

For determining shipment period:
- words “to”, “until”, “till”, “from” and “between” include the date or dates
mentioned.
- words “before” and “after” exclude the date mentioned.
- Terms “first half” and “second half of a month means the 1st – 15th and
16th – last day of the month, all dates inclusive.
- Terms “beginning”, “middle” and “end” of a month means the 1st – 10th,
the 11th – 20th and 21st – last day of the month, all days inclusive.

13
13
 Interpretations UCP 600 3

For determining a period of shipment, the words “from” and “after” have
different meanings

“From” includes the date mentioned

“After” excludes the date mentioned

Shipment to be effected
from August 10th
= Earliest shipment date
is August 10th

Shipment to be effected
after August 10th
= Earliest shipment date
is August 11th

14
14
UCP 600 – General Provisions and Definitions

Article 4 - Credits v. Contracts

Independence Principle - L/C is a separate transaction from the

underlying contract

Banks should discourage any attempt to include contract as
integral part of L/C

Discouraged ?? L/C
Contract No.123

Details as per Contract

No.123, which is
appended and forms an
integral part of the credit.

15
15
UCP 600 – General Provisions and Definitions

Article 5 - Documents v. Goods/Services/Performance

Banks deal with documents and not with goods, services or

performances to which the documents may relate.

16
16
UCP 600 – Liabilities and Responsibilities

Article 6 - Availability, Expiry Date and Place for Presentation

L/C must +

State the bank with which it is available, or that it is available with

any bank (available with a nominated bank also available with
the issuing bank)

State that it is available by sight payment, deferred payment,
acceptance or negotiation

Not be available by draft on applicant
Examples:

Available with issuing bank by deferred payment

Available with Bank XYZ by payment

Available with any bank by negotiation

17
17
 Availability, Expiry Date & Place for Presentation UCP 600 6

Expiry date

Last day for presentation of documents

Place for presentation

Bank with which the L/C is available, or

Any bank, if the L/C is available with any bank, and

Issuing bank

L/C available with any bank L/C available with Bank XYZ

Place for presentation

1. Any bank 1. Bank XYZ

2. Issuing bank 2. Issuing bank

18
18
UCP 600 – Liabilities and Responsibilities

Article 7 – Issuing Bank Undertaking

Honour complying presentation made to nominated bank or to issuing

bank itself

Reimburse nominated bank that has honoured/negotiated and forwarded
complying documents to issuing bank

Irrevocably bound as of the time L/C is issued

For usance L/C, reimbursement is due at maturity of deferred payment
undertaking or acceptance, whether or not nominated bank prepaid
or purchased before maturity

Issuing bank’s undertaking to reimburse nominated bank is

independent of its undertaking to beneficiary 19
19
UCP 600 – Liabilities and Responsibilities

Article 8 – Confirming Bank Undertaking

Honour a complying presentation, or negotiate without recourse

Reimburse nominated bank that has honoured/negotiated and
forwarded complying documents to confirming bank

Irrevocably bound as of the time of confirmation

For usance L/C, reimbursement is due at maturity of deferred payment
undertaking or acceptance, whether or not nominated bank
prepaid or purchased before maturity

Confirming bank’s undertaking to reimburse nominated bank is

independent of its undertaking to beneficiary
20
20
With regard to sub article 7c in UCP 600, “An issuing bank’s undertaking to reimburse a nominated bank is independent of the issuing
bank’s undertaking to the beneficiary”, the statement does not clarify which “independent” is.
Question 7.7 in FAQ under UCP 600 explained this statement as suggested that:
– Issuing Bank has the irrevocable undertaking to honour a complying presentation made by Beneficiary
– When a nominated bank agrees to act under their nomination and honours or negotiates, such undertaking becomes undertaking to
reimburse the nominated bank.
– Such two undertakings are independent: (1) to Reimburse nominated bank; (2) to honour if nominated bank has not honoured,
negotiated, or Beneficiary presented the documents directly to Issuing bank)
My question is:
What is the purpose of such sub article (7c)?
Does it imply that (1) if Issuing Bank already reimbursed the Nominated Bank but then, Nominated Bank does not pay Beneficiary, Issuing
bank has to pay Beneficiary? or (2) as said that the undertaking with Beneficiary became undertaking with Nominated Bank, Issuing Bank
will not have to pay Beneficiary?
If (1) then what should Issuing Bank act under such circumstances?
If (2) then can you explain the “independent” term within the context of sub article 7c?
Hope to hear from you soon. Thanks in advance.
With regards.
Thomas Jack
—————-
ANSWER
Hi,
It should be understood that the issuing bank’s payment undertaking to the beneficiary and the issuing bank’s reimbursement undertaking to
the nominated bank are two separate undertakings. The issuing bank’s payment undertaking to the beneficiary involves two parties, the
issuing bank and the beneficiary; and the issuing bank’s reimbursement undertaking to the nominated bank involves two parties, the issuing
bank and the nominated bank.
Under the issuing bank’s reimbursement undertaking to the nominated bank, if the nominated bank has acted its nomination, i.e., negotiated
or honoured a complying presentation, it is entitled to reimbursement from the issuing bank.
In case, the issuing bank fails to reimburse, the nominated bank can take legal action against the issuing bank (not the beneficiary) for
reimbursement.
Under the issuing bank’s payment undertaking to the beneficiary, if the beneficiary has made a complying presentation (not negotiated or
honoured by the nominated bank) to the issuing bank, it is entitled to payment from the issuing bank. In case, the issuing bank fails to pay,
the beneficiary can take legal action against the issuing bank (not the nominated bank) for payment.
The issuing bank can in no case avail itself of its undertaking to the beneficiary to deny its obligation under its undertaking to the nominated
bank. Similarly, it cannot avail itself of its undertaking to the nominated bank to deny its obligation under its undertaking to the beneficiary.
So to conclude, the two undertakings are independent of each other.
Mine is another way of intepretation which does not conflict with Gary Collyer’s intepretation in Question 7.7 in FAQ under UCP 600.
UCP 600 – Liabilities and Responsibilities

Article 9 - Advising of Credits and Amendments

By advising an L/C, the advising bank signifies:

Its without any undertaking to honour or negotiate

It has satisfied itself as to the apparent authenticity of the L/C
or amendment

The advice accurately reflects the L/C’s terms and conditions

An advising bank may utilize the services of another bank to advise

the credit - second advising bank

21
21
UCP 600 – Liabilities and Responsibilities

Article 10 – Amendments

Amendment must be agreed to by the issuing bank, confirming

bank, if any, and the beneficiary

Issuing bank/Confirming bank is irrevocably bound as of time of
issuance and advising of amendment

Confirming bank must inform issuing bank of election not to
extend confirmation to an amendment and may advise
beneficiary of amendment without it’s confirmation

Notification of acceptance or rejection received should be given
by second advising bank to the advising and the advising bank
to the issuing bank

Partial acceptance = Notice of rejection

22
22
 Amendments UCP 600 10

Disregard any provision that the amendment shall be in

force unless rejected by beneficiary within certain time

Silence = Consent

Amendment No.1

- Amount reduced by USD100,000.00

This amendment shall be in force

Disregard unless rejected by beneficiary on
or before 30 Nov 2007.

23
23
 Acceptance of Amendment by Performance UCP 600 10

Presentation that complies with the credit and not yet accepted
amendment – deemed to be beneficiary’s acceptance of the
amendment

Original L/C Amendment Deemed

accepted ?
Date: 1 JUL 07 Date: 4 JUL 07

US$150,000 Amt. reduced to Document

US$100,000
Ship by 20 AUG 7
Partial shipments Ship by 20 JUL 07 US$100,000
allowed
Shipped 20 JUL 07
Complying
Complying

24
24
UCP 600 – Liabilities and Responsibilities

Article11 – Teletransmitted and Pre-Advised Credits and

Amendments

Authenticated teletransmission of credit and amendment deemed

to be operative, unless otherwise stated.

If teletransmission states “full details to follow” (or words of similar effect),
issuing bank must then issue the operative credit or amendment in terms
not inconsistent with the teletransmission

Preliminary advice of issuance of a credit or amendment obligates
the issuing bank to issue the operative credit or amendment.

25
25
UCP 600 – Liabilities and Responsibilities

Article 12 – Nomination

Nomination does not obligate nominated bank to honour

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

26
26
UCP 600 – Liabilities and Responsibilities

Article 13 – Bank to Bank Reimbursement Agreements

If a credit states that reimbursement is to be obtained from a reimbursing

bank, it must state if the reimbursement is subject to the ICC rules for
bank-to-bank reimbursements in effect on the date of issuance of the
credit.

27
27
UCP 600 – Examination of Documents

Article 14 - Standard for Examination of Documents

Must examine documents on their face to determine compliance

Other than the commercial invoice, description of goods, services

or performance,
performance, may be stated in general terms

Disregard documents not required by L/C and may be returned

Disregard non-
non-documentary condition

Documents may be dated prior to issuance date of LC, but not

later than date of presentation

28
28
 Reasonable Time UCP 600 14

UCP 500: Reasonable time, not to exceed SEVEN banking days

following the day of receipt of documents

UCP 600: Max. of FIVE banking days following day of presentation.

Not curtailed or affected by other events.

M Tu W Th F Sa S M Tu W

UCP 600 0 1 2 3 4 X X 5

UCP 500 0 1 2 3 4 X X 5 6 7

What is reasonable ? 29
29
 Period for Presentation UCP 600 14

Presentation including an original transport document must be made

not later than 21 calendar days after date of shipment

Transport document - Subject to Articles 19-25

Data in Documents

Data in a document must not conflict with data in that

document, other stipulated documents or the L/C

30
30
 Unspecified Issuer or Content UCP 600 14

Other than invoice, transport document or insurance document, banks

will accept the document if (1) its content appears to fulfill the
function, and (2) it complies with 14(d)

Example: L/C calls for Inspection Certificate

Inspection Inspection
Certificate Certificate
Goods have
Goods have been Goods are been inspected
inspected and are certified to be of and are certified
certified to be in Singapore origin. to be in order.
order.
Signed Signed Signed
Dated 1 JUL 2009 Dated 1 JUL 2009 Dated 1 JUL 2009
  

31
31
 Addresses of Beneficiary & Applicant UCP 600 14

Need not be the same between stipulated documents & the credit; but

Must be within the same country as in the credit

Disregard contact details of beneficiary and applicant (fax, phone, email)
stated in the credit

However, if they form part of consignee and notify party details in
transport document, applicant’s contact details must be as stated in
the credit

32
32
 Addresses of Beneficiary & Applicant UCP 600 14

Letter of Credit Invoice 

Applicant: ABC Inc. Bill to: ABC Inc.
3 Temasek Avenue 10 Coleman Street
16-
16-00 Centennial Tower Singapore 179809
Singapore 039190
Fax No. 6328 5201 Fax No. 6328 5464
B/L to notify applicant

Bill of Lading  Bill of Lading 

Notify: ABC Inc. Notify: ABC Inc.
10 Coleman Street 3 Temasek Avenue
Singapore 179809 16-
16-00 Centennial Tower
Singapore 039190
Fax No. 6328 5464 Fax No. 6328 5201

33
33
 Shipper, Consignor, Transport Document Issuer UCP 600 14

Shipper or consignor of goods indicated on any

documents need not be the L/C beneficiary, but must
be consistent among all documents

L/C

Beneficiary: ABC Co. Ltd.

Bill of Lading  Certificate of Origin  Certificate of Origin


Shipper: XYZ Co. Ltd. Shipper: XYZ Co. Ltd. Shipper: ABC Co. Ltd.

Transport document may be issued by party other

than carrier/ owner/ master/ charterer, provided it meets
the requirements of articles 19, 20, 21, 22, 23 or 24
34
34
UCP 600 – Examination of Documents

Article 15 – Complying Presentation

When …
Without
delay
Issuing bank determines It must honour
a presentation is and release documents to
complying the applicant

Confirming bank It must honour or

determines a presentation negotiate and forward
is complying documents to issuing bank

Nominated bank
It must forward
determines a presentation
documents to confirming
is complying, and
bank or issuing bank
honours or negotiates

35
35
UCP 600 – Examination of Documents

Article 16 – Discrepant Documents, Waiver and Notice

Nominated/Confirming/Issuing bank may refuse to honour or

negotiate discrepant documents

Issuing bank, in its sole judgment approach applicant for waiver

Notice of refusal must be given no later than close of the fifth

banking day following day of presentation

Failing to act in accordance with this article precludes the bank from
claiming the presentation does not comply

After providing notice of refusal

The bank may return documents to presenter at any time

Issuing bank or confirming bank may claim refund for any
reimbursement made, with interest

36
36
 Discrepant Documents, Waiver and Notice UCP 600 16

Single Notice of Refusal must state:

the bank is refusing to honour or negotiate,

each discrepancy in respect of the refusal, and

one of the following:

The bank is holding documents pending presenter’s further

instructions
The issuing bank is holding documents until it receives waiver
NEW from applicant and agrees to accept it, or receives further
instructions from presenter prior to agreeing to accept the waiver
The bank is returning the documents

NEW The bank is acting in accordance with instructions previously

received from the presenter

37
37
 Important Timelines (UCP 600 – 14,15,16)

Document Examination:

Max. 5 banking days following the day of presentation

Complying Presentation:

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

Refusal:

Notice of refusal by the close of the fifth banking day following the
day of presentation

38
38
UCP 600 – Examination of Documents

Article 17 – Original Documents and Copies

At least one original must be presented

Original Document = apparent original signature, mark, stamp or

label of issuer of the document

Also an Original = written, typed, perforated or stamped by the

document issuer’s hand; or
on original stationery; or
states that it is original

L/C requires copies of documents, either originals or copies is

acceptable

Documents “in duplicate”, “in two fold” or “in two copies”,

presentation of at least one original and remaining number in
copies is acceptable.
39
39
UCP 600 – Documents

Article 18 – Commercial Invoice

Issued by beneficiary, made out in the name of applicant, and

need not be signed (except as provided in article 38 – Transferable L/C)

Invoice amount in excess of L/C – May be accepted by the

nominated bank, but must not be honoured or negotiated in
excess of L/C amount

Description of goods, services or performance must correspond

with L/C description

40
40
 Commercial Invoice UCP 600 18

Must be in the same currency as L/C

L/C

Currency & Amount:

USD1,000,000.00

Invoice No.123 Invoice No.456

Invoice Amount: Invoice Amount:

USD1,000,000.00 SGD1,560,000.00
(Equivalent to (Equivalent to
SGD1,560,000.00) USD1,000,000.00)

 
41
41
UCP 600 – Documents

Article 19 – Transport Documents Covering at Least Two Different

Modes of Transport

Must appear to indicate name of carrier

Signed by carrier, master or named agent

If signed by agent, need to specify for whom - carrier or
master - it is signed

ABC Forwarders ABC Forwarders

600  600 
As Agent As Agent
500  500 
For Master For Master,
Takashi Yanagawa

42
42
 Transport Document Covering at Least UCP 600 19
Two Different Modes of Transport

Indicating goods have been dispatched, taken in charge

or shipped on board:

by pre-printed wording – issuance date is the
date of dispatch, taking in charge or shipped
on board

by a dated notation indicating the date goods
have been dispatched, taken in charge or
shipped on board – this date is the date of
shipment

Must indicate place of dispatch, taking in charge or
shipment and place of final destination stated in the L/C,
even if transport document:

states, in addition, different place of dispatch, taking in
charge or shipment or place of final destination

contains indication “intended” or similar qualification in
relation to vessel, port of loading or port of discharge
43
43
 Changes to SWIFT MT700

New fields for transport details:

44A Place of Taking in Charge/ Dispatch from …/

Place of Receipt

44E Port of Loading/ Airport of Departure

44F Port of Discharge/ Airport of Destination
44B Place of Final Destination/ For Transportation to …/
Place of Delivery

44
44
 Transport Document Covering at Least UCP 600 19
Two Different Modes of Transport

If issued in more than one original, all originals are required

Need not examine contents of Terms and Conditions of
carriage

Must not indicate it is subject to a charter party (no
mention of “vessel propelled by sail”)

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 – is transshipment

Transport document may indicate goods will or may be
transshipped provided entire carriage is covered by
one and the same transport document

Even prohibited by the L/C, transport document
indicating transshipment will or may take place is
acceptable 45
45
UCP 600 – Documents

Article 20 – Bill of Lading

Article 21 – Non-Negotiable Sea Waybill

Must appear to indicate name of carrier

Signed by carrier, master or named agent

If signed by master, name of master is not necessary

Master 600 
500 

If signed by agent, need to specify for whom,
carrier or master - it is signed

ABC Forwarders ABC Forwarders

600  600 
As Agent
For Master
500  As Agent 500 
For Master, John Doe
46
46
 Bill of Lading UCP 600 20,21
Non-Negotiable Sea Waybill

Indicating goods have been shipped on board:

by pre-printed wording – issuance date is the
date of shipment, or

by a dated on board notation – on board date
is the date of shipment

Port of loading in B/L differs from that stated in the L/C, or

B/L contains “intended” qualification with regards to port of
loading – “On Board Notation” is required, regardless of
pre-printed “shipped” B/L is presented, indicating:

port of loading as in the L/C

date of shipment

name of vessel

If issued in more than one original, all originals are required

47
47
 Bill of Lading UCP 600 20,21
Non-Negotiable Sea Waybill

Need not examine contents of Terms and Conditions of

carriage

Must not indicate it is subject to a charter party (no
mention of “vessel propelled by sail”)

Unloading from one vessel and reloading to another
vessel during the carriage from port of loading to port of
discharge - is transshipment

B/L may indicate goods will or may be transshipped

provided entire carriage is covered by one and the
same B/L

Even prohibited by the L/C, B/L indicating transshipment
will or may take place is acceptable if goods have been
shipped in a container, trailer or LASH barge

Disregard clauses in B/L carrier reserve the right to

transship 48
48
UCP 600 – Documents

Article 22 – Charter Party Bill of Lading

B/L containing indication that it is subject to a charter

party

Signed by master, owner, charterer or named agent

If signed by master, or owner, or charterer, their
names are not necessary

Master, Owner or Charterer 600 

If signed by agent, need to specify for whom –master,

owner or charterer - it is signed

49
49
 Charter Party Bill of Lading UCP 600 22

Agent signing for owner or charterer must indicate name

of owner or charterer

ABC Forwarders ABC Forwarders

600  600 
As Agent As Agent
For Owner, John Doe For Charterer,
Charterer, John Doe

ABC Forwarders
600 
As Agent
For Master

50
50
 Charter Party Bill of Lading UCP 600 22

Indicating goods have been shipped on board:

by pre-printed wording – issuance date is the
date of shipment, or

by a dated on board notation – on board date
is the date of shipment

Port of discharge may be shown as a range of ports, or

geographical area, as stated in L/C

e.g. L/C calls for shipment to Asian ports

If issued in more than one original, all originals are required

Need not examine charter party contracts

No mention that the B/L must not indicate vessel

propelled by sail only
51
51
UCP 600 – Documents

Article 23 – Air Transport Document

Must appear to indicate name of carrier

Signed by carrier or named agent

If signed by agent, need to indicate that agent has signed for or
on behalf of carrier

Must indicate date of issuance, which will be deemed to
be the date of shipment, unless+++.

Specific notation of actual date of shipment, even not
called for in the credit, will be deemed to be the date of
shipment

52
52
 Air Transport Document UCP 600 23

Shipment date not determined by any other information

re flight number and date (in box marked “for carrier’s
use only)

Be the original for consignor or shipper, even if credit
stipulates full set of originals

Need not examine Terms and Conditions of carriage

Unloading from one aircraft and reloading to another
aircraft during the carriage from the airport of loading to
the airport of destination – is transshipment

Even L/C prohibits transshipment, air transport
document indicating goods will or may be transshipped
is acceptable, provided entire carriage is covered by
one and the same air transport document

53
53
UCP 600 – Documents

Article 24 – Road, Rail or Inland Waterway

Transport Documents

Must appear to indicate name of carrier

Signed by carrier or named agent

If signed by agent, need to indicate that agent has signed
for or acted for or on behalf of carrier

Must indicate date of issuance or date goods have been
received for shipment, dispatch or carriage, which is the
date of shipment, unless the transport document contains a
dated reception stamp, an indication of date of receipt or a
date of shipment

Indicate place of shipment and place of destination as per
L/C

In the absence of indication as to the number of originals
issued, the number presented deemed to be the full set
54
54
 Road, Rail or Inland Waterway Transport Documents UCP 600 24

Unloading from one means of conveyance and reloading to

another means of conveyance, within the same mode of
transport, during the carriage from the place of shipment,
dispatch or carriage to the place of destination –
is transshipment

Transport document may indicate goods will or may be

transshipped provided entire carriage is covered by one
and the same transport document

Even prohibited by the L/C, transport document indicating
transshipment will or may take place is acceptable

55
55
 Road, Rail or Inland Waterway Transport Documents UCP 600 24

For rail transport document:

If it does not identify the carrier, any signature or stamp
of railway company is accepted as being signed by the
carrier

Transport document marked “duplicate” is accepted as
an original

Transport document will be accepted as original whether
marked as an original or not (also applicable to inland
waterway transport)

Road transport document marked for consignor or shipper

or bear no marking for whom the document has been
prepared – is the original

56
56
UCP 600 – Documents

Article 25 – Courier Receipt, Post Receipt or

Certificate of Posting

Courier receipt must appear to:

Indicate the name of courier service, and be stamped
or signed by the named courier service at the place
the goods are to be shipped

Indicate a date of pick-up or receipt, which will be
deemed to be the date of shipment

Requirement that courier charges to be paid or prepaid
is satisfied by the courier receipt evidencing courier
charges are for account of a party other than the
consignee

Post receipt of certificate of posting, must appear to be

stamped or signed and dated at the place the goods are to
be shipped. This date will be deemed to be the date of
shipment 57
57
UCP 600 – Documents

Article 26 – “On Deck”, “Shipper’s Load and Count”, “Said by

Shipper to Contain” and Charges Additional to Freight

Transport document indicating goods are or will be loaded

on deck not acceptable

Transport document indicating goods may be loaded

on deck is acceptable

“Shipper’s Load and Count” and “said by shipper to contain”

is acceptable

Transport document bearing reference to charges additional

to freight is acceptable

58
58
UCP 600 – Documents

Article 27 – Clean Transport Document

Clean transport is one bearing no clause or notation expressly

declaring a defective condition of goods or their packaging

The word “clean” need not appear on a transport document,

even credit requires “clean on board”

59
59
UCP 600 – Documents

Article 28 – Insurance Document and Coverage)

Insurance document – Insurance policy, insurance certificate or

declaration under open cover

Issued and signed by insurance company, underwriter or their
agents or their proxies

Signature by agent or proxy indicated as being for or on behalf of
insurance company or underwriter

Agent for By proxy for

ABC Insurance Co. Ltd.
ABC Insurance Co. Ltd. ABC Insurance Co. Ltd.

60
60
 Insurance Document and Coverage UCP 600 28

All originals must be presented, if the document indicates that more

than one original has been issued

Cover Note not acceptable

Insurance policy is acceptable in lieu of insurance certificate or
declaration under open cover

Issued no later than shipment date, or it appears from the
document that cover is effective from a date no later than shipment
date

Policy
Insurance Policy Bill of Lading
Bill
Effective
EffectiveDate
Date Shipped
ShippedOn
OnBoard
Board
1 AUG 2007
1 AUG 2007 1 AUG 2007
1 AUG 2007
Issued
Issuedon
on88AUG
AUG2007
2007 Issued
Issuedon
on11AUG
AUG2007
2007
61
61
 Insurance Document and Coverage UCP 600 28

Insurance coverage expressed in the L/C as percentage of

goods/invoice value (e.g. 110% of CIF value) is deemed to be
minimum coverage required

Invoice: Total CIF value

L/C: Insurance required for US$100,000
110% of invoice value 120 %
Insurance
InsurancePolicy:
Policy:
Insured
Insuredamount
amountUS$110,000
US$120,000
Min. coverage
required
Acceptable

62
62
 Insurance Document and Coverage UCP 600 28

Min. 110% of CIF or CIP value, if L/C does not indicate insurance
coverage required

If CIF or CIP value cannot be determined from documents – take

the greater of the following:

Amount for which honour or negotiation is requested; or

Gross invoice value of the goods

Risks covered at least :

Place of taking in charge or Place of discharge or final

shipment destination

+ as stated in the L/C

63
63
 Insurance Document and Coverage UCP 600 28

L/C should state type of insurance required and additional risks to

be covered

If L/C uses imprecise terms such as “usual risks” or “customary
risks”, bank will accept insurance document without regard to any
risks not covered

If L/C requires insurance against “all risks”, bank will accept

insurance document containing any “all risks” notation or clause,
without regard to any risks stated to be excluded

Insurance document may :

Contain reference to any exclusion clause

Indicate that cover is subject to franchise or excess (deductible)

64
64
UCP 600 – Miscellaneous Provisions

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

Expiry date or last day for presentation falls on a day the bank is
closed for reasons other than “Force Majeure”, it will be extended
to the first following banking day

Nominated bank must provide the issuing bank or confirming

bank with a statement that presentation was made within the time
limits extended

Latest date for shipment will not be extended

65
65
UCP 600 – Miscellaneous Provisions

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

Words “about” or “approximately” used in conjunction with credit

amount, quantity or unit prices, are to be construed as allowing
a tolerance not to exceed 10% more or 10% less

Quantity not in terms of stipulated number of packing units or

individual items has a tolerance not to exceed 5% more or 5% less,
providing credit amount is not over drawn

Even when partial shipment is not allowed, a tolerance not to exceed

5% less than the credit amount is allowed, provided the quantity
is shipped in full and that any unit price is not reduced.

66
66
UCP 600 – Miscellaneous Provisions

Article 31 – Partial Drawings or Shipments

Partial drawings or shipments are allowed

Presentation of multiple sets of transport docs evidencing

shipment on the same means of conveyance (e.g. vessel, aircraft)
from different ports/places on different dates and for the same
journey to the same destination – not partial shipment
Port A B/L “A” AUG 1 • Same vessel and voyage
• Same destination
B/L “B” AUG 7
Port B Port D
B/L “C” AUG 9
Port C
A B C = L/C quantity

Take latest of the shipment dates as date of shipment (Aug 9 in

the above example)
67
67
 Partial Drawings or Shipments UCP 600 31

NEW
Presentation of multiple sets of transport docs evidencing shipment on

more than one means of conveyance within the same mode of
transport (e.g. shipment by truck) will be regarded as partial shipment,
even if shipped on the same day for the same destination

Partial Shipment
Truck A AUG 1

Destination
Truck B AUG 1 D

Truck C AUG 1 A B C = L/C quantity

Multiple courier receipts not regarded as partial shipment, if

stamped/signed by same courier at same place & date and for same
destination
68
68
UCP 600 – Miscellaneous Provisions

Article 32 – Installment Drawings or Shipments

Any installment not drawn or shipped, credit ceases

to be available

Article 33 – Hours of Presentation

Banks have no obligation to accept presentation outside

of its banking hours

69
69
UCP 600 – Disclaimers

Article 34 – Disclaimer on Effectiveness of Documents

Banks are not liable or responsible for any fraudulent

documents or the accuracy and representation of any documents.

70
70
UCP 600 – Disclaimers

Article 35 – Disclaimer on Transmission and Translation

When act in accordance with instruction or on own initiative,

banks are not liable or responsible for any loss in transit,
mutilation or other errors arising in the transmission of any
messages or delivery of letters or documents

Complying documents lost in transit, between:

Nominated bank and issuing/confirming bank, or

Confirming bank and issuing bank
Issuing/confirming bank must honour or negotiate, or reimburse

Banks are not obligated to translate and may transmit credit
terms without translating them

71
71
UCP 600 – Disclaimers

Article 36 – Force Majeure

Bank will not honor or negotiate under a credit that expired

during interruption of its business, which is not under
it’s control

72
72
UCP 600 – Disclaimers

Article 37 – Disclaimer for Acts of an Instructed Party

Issuing bank or advising bank not liable or responsible for

instructions not carried by another bank

Bank instructing another bank to perform services is liable

for that bank’s charges

Issuing bank is liable for charges that cannot be collected

or deducted from the proceeds

Applicant is bound by and liable to indemnify a bank against

all obligations and responsibilities imposed by foreign
laws and usages

73
73
 Disclaimer for Acts of an Instructed Party UCP 600 37

L/C or amendment should not stipulate that advising to beneficiary is

conditional upon the receipt by advising bank or second advising bank
of its charges

Unacceptable clause:

Notwithstanding sub-
sub-article 37c, the advising
bank must collect their advising fee prior to
advising the credit to the beneficiary

74
74
UCP 600 – Transferable LC & Assignment of Proceeds

Article 38 – Transferable Credits

Transferable credit – An L/C may be made available by the

transferring bank to a second beneficiary

First Second
Applicant
Beneficiary
Beneficiary Beneficiary

1 2 3 4

Issuing Transferring (May be the

Bank Bank Issuing Bank)

1. L/C application 3. Request for transfer

2. Transferable credit 4. Transferred credit –
(Credit has been made available
to a second beneficiary)
75
75
 Transferable Credits UCP 600 38

Transferred credit must accurately reflect the terms and conditions of

the credit, including confirmation +

Second beneficiary’s documents may be sent to issuing bank if first

beneficiary fails, on first demand, to:

Present its invoice (and draft, if any), or

Rectify discrepancies in its invoice (where such discrepancies
did not exist in second bene’s invoice)

76
76
 UCP 600 38
Transferable Credits

38 (k): Second beneficiary’s documents must be presented to

transferring bank

B A

Second beneficiary’s documents

First beneficiary’s draft & invoice
Documents after substitution
77
77
 UCP 600 38
Transferable Credits

38 (k): Second beneficiary’s documents must be presented to

transferring bank

However, in case of Full Transfer, documents may be presented
directly to issuing bank

Therefore the Transferred Credit should expressly exclude sub-
article 38 (k)

Full Transfer
(No substitution)

78
78
 UCP 600 38
Transferable Credits

Bank not obligated to effect transfer

All charges relating to the transfer are for the account of first
beneficiary

If L/C allows partial drawings or shipments, it can be transferred in
part to more than one second beneficiary

Transferred L/C cannot be transferred to any subsequent beneficiary

Must determine the handling of subsequent amendments

Rejection of an amendment by one or more second beneficiary does
not invalidate the acceptance by any other second beneficiary

Allowable changes:
- credit amount - unit price - expiry date - period for presentation
- latest shipment date - percentage of insurance coverage
First beneficiary’s name may be substituted for that of the applicant

Honour or negotiation of transferred L/C may be in the second
beneficiary’s country
79
79
UCP 600 – Transferable LC & Assignment of Proceeds

Article 39 – Assignment of Proceeds

Assignment of proceeds under the credit only.

Not an assignment of right to perform under the credit.

80
80
 THANK
YOU

81
81