The bank has a maximum of 5 banking days following the day of presentation to determine if a presentation is complying. In such cases the ucp 600 attempts to protect nominated banks that have acted in accordance with their nomination. In may 2003, icc authorized the cbtp to begin a revision of the ucp 500. Pdf ucp 600 ruleschanging letter of credit business for. In grains and industrial products trading pte ltd v bank of india and another 2016 sgca 32, the. Standby letters of credit national association of credit. Icc banking commission opinions 20182019 preface chapter 1 opinions on ucp 600 chapter 2 opinions on isbp 745 key word index index by r reference numbers and articles cross reference index ta, ta rev and r numbered opinions tr. Pdf ucp 600 rules changing letter of credit business for. All 39 articles of ucp 600 are important for banks dealing with documentary credits. Ucp600 article 1 application of ucp the uniform customs and practice for documentary credits, 2007 revision, icc publication no.
This article examines the major changes introduced by the ucp 600 and. The underlying rules and the impact of using ucp 600 vs isp98. Ucpdc 600 pdf ucp is the latest rules of the letter of credit transactions issued by icc. Icc banking commission opinions 20182019 icc knowledge. The icc updates these rules in response to changes in international banking and. Ucp 600 the latest revision of ucp is the sixth revision of the rules since they were first promulgated in 1933. As an alternative banks discovered that if you copypast the guarantee text into an lc with a few tweaks you could have a similar instrument as a bankguarantee which even has a few. With the objective of resolving some of these contentious issues, the iccs commission on banking technique and practice established a drafting group and a consulting group. However, although a voluntary code, the majority of lcs are governed by. The ucp remain the most successful set of private rules for trade ever developed. It is a set of 39 articles on issuing and using letters of credit, which applies to 175 countries around the. Uniform customs and practice for documentary credits 1993.
This case provides a useful clarification of ucp 600 and additional comfort to negotiating banks and confirming banks by confirming that, irrespective of timing, it is the act of negotiating or honouring a complying presentation of documents alone that gives rise to a right of reimbursement under article 7c of ucp 600. Ucp 600 rules changing letter of credit business for international traders. Votes received from 49 ncs, plus one further nc vote after the. In providing definitions of roles played by banks and the meaning of specific terms and events, ucp 600 avoids the necessity of repetitive text to explain their interpretation and application. Murdoch university electronic journal of law 2011 182 3. University malaya, malaysia abstract the uniform customs and practice ucp is the primary source for letter of credit lc transaction. Ucp 600, supposedly have simpler and clearer wording.
Selected issues rosmawani chehashimi senior lecturer. Islamic banks in malaysia offer letter of credit lc wakalah agency and lc murabahah costplus as two of their main trade finance facilities. Dec, 2018 icc uniform customs and practice for documentary credits ucp 600. Usershandbook for documentary credits under ucp 600 walter buddy baker and john f. The ucp 600 are the latest revision of the uniform customs and practice for documentary credits. Under this payment arrangement the bank, under instructions. For buyers and sellers, however, some articles have only limited relevance while others. Having listened to the concerns of practitioners from around the world, k. One of the structural changes to the ucp is the introduction of articles covering definitions article 2 and interpretations article 3. The international chamber of commerce icc recently published its final text of the revised electronic uniform customs and practice for documentary credits eucp version 2.
The ucp 600 enhances the role of the banks in lc transaction, which is restricted to documents. Home icc ucp ucp 600 ucp 600 articles ucpdc ucp 600 articles article 3 to article 7. For more than 85 years, the uniform customs and practice for documentary credits ucp the international chamber of commerces rules on documentary credits have governed letter of credit transactions worldwide. Users handbook for documentary credits under ucp 600. The 39 articles of ucp 600 are a comprehensive and practical working aid to bankers, lawyers, importers, and exporters, transport executives, educators, and everyone involved in letter of credit transactions worldwide. Roberto bergami school of applied economics, institute for community, ethnicity and policy alternatives, victoria university, po box 14428, melbourne, victoria 8001, australia email. In describing ucp 600 subarticle 14e description of goods in documents other than the commercial invoice it is stated that.
The latest revision of the rules, ucp 600, came into effect on 1 july 2007. Ucp 600 article 2 defined a credit see previous slide and then defined presentation. The ucp is utilized by bankers and commercial parties in more than countries in trade finance. The banks ability to confirm any credit will be subject to there being an appropriate confirmation facility in place for the issuing. Ucp 600 ebooks that every exporter and importer should. Read pdf commentary on ucp 600 version of icc s universally used rules on documentary credits, came into effect on july 1, 2007. Complying presentation means a presentation that is in accordance with the terms and conditions of the credit, the applicable provisions of these rules ucp and international standard banking practices the isbp therefore forms an integral part of the way lcs are issued and documents are checked.
Decision of the icc in respect of a revision of ucp 600. The international chamber of commerce icc has established rules on documentary credits worldwide for more than 70 years. The role of correspondent and multilateral development banks in facilitating trade in cee. Global rules icc international chamber of commerce. Some of the important interpretations used in ucpdc 600 are as under. Ucp 600 by icc the uniform customs practices for documentary credits or foreign trade. Thank you for joining us today for this panel discussion on ucp 600. Ucp 600 ebooks that every exporter and importer should read. Page 6 of 33 isbp ucp 600 information chair gary collyer technical adviser to. Icc banking commission opinions many of which, although issued under ucp 400 and 500 will still be relevant. Ucp 600 isp98 both rules are governed by the icc and are quite similar in a number of ways however the latter was specifically designed for sblcs although ip98 is geared towards the sblc there seems tom be some reluctance by parties to issue sblcs under these rules ucp 600 will work almost just as well as isp98 however its. Page 6 of 33 isbp ucp 600 information chair gary collyer technical adviser to the icc commission on banking technique and practice. Practice for letters of credit ucp issued by icc, publication no. Exporter guide to documentary credits under ucp 600 may be in a position to advise the reasons to you.
Ucp 600 does not refer to, require or imply that linkage is necessary between or among documents if this is correct then this is clearly a change in practice. Ucp 600 promotes letter of credit use by clarifying governing rules following a threeyear effort, the international chamber of commerce icc banking commission has approved the new uniform customs and practice for documentary credits. Data in a document, when read in context with the credit, the document itself and international standard banking. On 6th june 2017, the icc banking commission provided a press release announcing the.
Banking practice for the examination of documents under ucp 600 20, icc publication no. It is the fruit of more than three years of work by the iccs commission on banking technique and practice. Lc is the product of international chamber of commerce, the world business organization based in paris and it is governed by the uniform customs and practice for documentary credits ucp no. A banks duties under letters of credit and the ucp 600. It is drafted by icc banking commission and published by icc services its full name is 2007 revision of uniform customs and practice for documentary credits, ucp 600, and icc publication no.
Time to update the ucp 600 by anna mari antoniou lecturer in maritime and commercial law, university of essex a. To reflect industry changespractices transport, i nsurance and. Ucp 600 sixth 6th revision since its inception by the international chamber of commerce in 1933 first ucp. Banks are in no way concerned with or bound by such contract, even if any reference whatsoever to it is. The bank as a confirming bank the confirmation of a documentary credit is governed by article 8 of ucp 600. Please feel free to go to the back of the room and grab a cup of coffee or tea if you are so inclined. A complying presentation is one that meets the requirements of the credit and the applicable provisions of the ucp 600 and international standard banking practice ucp 600 article 2. Articles 1 17 article 1 is it mandatory that only banking entities can issue letter of credit, subject to ucp 600.
Global trade ucp 600 promotes letter of credit use by. Ucp 600, which replaces the current ucp 500 and takes effect july 1, 2007, is. The 39 articles of ucp 600 are a comprehensive and practical working aid to bankers, lawyers, importers, and exporters, transport executives, educators, and everyone involved in letter of credit. Uniform rules for documentary credits icc knowledge 2 go.
Commercial letters of credit are the lifeblood of international trade. Ucp 600 article 1 ucp are rules that apply to any documentary credit credit including, to the. In may 2003, the international chamber of commerce authorized the icc commission on banking technique and practice to begin a revision of ucp 500. Icc has published three new books on the recently revised uniform customs and practice for documentary credits, iccs rules on letters of credit, which govern billions of dollars in trade transactions annually.
Applying for the letter of credit page 7 a does ucp 600 apply page 7. Decision of the icc in respect of a revision of ucp 600 following a comprehensive consultation background an initial thcommunication dated 6 october 2016 was sent to icc national committees. Icc uniform customs and practice for documentary credits ucp 600. International standard banking practices dynamic business development, inc. The eucp supplements the uniform customs and practice for documentary credits 2007 revision, icc publication no. It is recommended that banks arrange for this guidance paper to be distributed. The ucp 600 are only applicable if they are expressly incorporated and there is provision for including them at field 40e in the swift mt700. Application of ucp the uniform customs and practice for documentary credits, 1993 revision, icc publication no. Banks underpin more than a third of global trade transactions, representing trillions of. An issue on uniform customs and practice for documentary. Banks deal with documents and not with goods, services or performance to which the documents may. As with other revisions, the general objective of the ucp 600 is to address important and relevant developments in the banking, transport and insurance. This is probably because practice under ucp 600 had not truly developed at the time they wrote. The latest ucp revision is done in july 2007 under publication number ucp 600 of icc.
Ucp 600 rules changing letter of credit business for. Early and contemporary history of letter of credit rules under this heading we will make the comparative analysis of changes between a present version of icc uniform customs and practice for documentary credits usp 600 2007 revision and previous version ucp 500 1993 revision. It is the fruit of more than three years of work by the icc s commission on banking technique and practice. The principle from the perspective of the ucp 600 is that the risk of fraud lies with the bank that issued the documentary credit andor the applicant the buyer. Where a credit is issued subject to ucp, the credit will be interpreted in accordance with the entire set of 39 articles contained in ucp views read fredits view history. Pdf will the ucp 600 provide solutions to letter of credit. It remains, to date, the most successful set of private rules for trade ever developed. You can also find general information regarding the electronic rules for. Formulated entirely by experts in the private sector. The eucp shall apply where the credit indicates that it is subject to the eucp eucp credit. Aug 04, 2008 ucp 600 the latest revision of ucp is the sixth revision of the rules since they were first promulgated in 1933. The content of that opinion equally applies under ucp 600 as well.
Ucp 600 sixth 6th revision since its inception by the international chamber of commerce in 1933 first ucp no. Pdf will the ucp 600 provide solutions to letter of. Practice for documentary credits 600 ucp 600 serves as a standardised set of rules on the issuance and use of letters of credit, and is adopted for use by most banks worldwide. Dec 24, 2018 ucpdc 600 pdf ucp is the latest rules of the letter of credit transactions issued by icc. The uniform customs and practice for documentary credits, 2007 revision, icc pub lication no. Comments to commentary on ucp 600 best trade solution. Introduction this revision of the uniform customs and practice for documentary credits commonly called ucp is the sixth revision of the rules since they were first promulgated in 1933. The ucp is the work of the icc, a private international organization founded in 1919. What is uniform customs and practice ucp for documentary. International chamber of commerce icc whose function is to harmonize the various trade customs practiced in lc, had. Does your national committee approve the uniform rules for collections urc 522 supplement for electronic presentation eurc version 1.
1362 405 660 1541 1255 1324 1145 525 860 154 178 1236 860 281 1289 151 297 249 77 250 1034 1063 1035 980 1180 1414 993 578 675 1166 975 1476 220 1398 1249 38 727 1060 597 225 1363 184 1145 667 1183 349