UCP 600
UCP 600
UCP 600 are the latest revision
of the Uniform Customs and Practice that govern the operation of letters of
credit.
UCP 600 comes into effect on 01 July 2007
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.
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ICC
Uniform Customs and Practice for Documentary Credits (UCP 600)
Foreword
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. It is
the fruit of more than three years of work by the International Chamber of
Commerce’s (ICC) Commission on Banking Technique and Practice.
ICC, which was established in
1919, had as its primary objective facilitating the flow of international trade
at a time when nationalism and protectionism posed serious threats to the world
trading system. It was in that spirit that the UCP were first introduced – to
alleviate the confusion caused by individual countries’ promoting their own
national rules on letter of credit practice. The objective, since attained, was
to create a set of contractual rules that would establish uniformity in that
practice, so that practitioners would not have to cope with a plethora of often
conflicting national regulations. The universal acceptance of the UCP by
practitioners in countries with widely divergent economic and judicial systems
is a testament to the rules’ success.
It is important to recall that
the UCP represent the work of a private international organization, not a
governmental body. Since its inception, ICC has insisted on the central role of
self-regulation in business practice. These rules, formulated entirely by
experts in the private sector, have validated that approach. The UCP remain the
most successful set of private rules for trade ever developed.
A range of individuals and
groups contributed to the current revision, which is entitled UCP 600. These
include the UCP Drafting Group, which sifted through more than 5000 individual
comments before arriving at this consensus text; the UCP Consulting Group,
consisting of members from more than 25 countries, which served as the advisory
body reacting to and proposing changes to the various drafts; the more than 400
members of the ICC Commission on Banking Technique and Practice who made
pertinent suggestions for changes in the text; and ICC national committees
worldwide which took an active role in consolidating comments from their
members. ICC also expresses its gratitude to practitioners in the transport and
insurance industries, whose perceptive suggestions honed the final draft.
Guy Sebban
Secretary General
International Chamber of Commerce
Introduction
In May 2003, the International
Chamber of Commerce authorized the ICC Commission on Banking Technique and
Practice (Banking Commission) to begin a revision of the Uniform Customs and
Practice for Documentary Credits, ICC Publication 500.
As with other revisions, the
general objective was to address developments in the banking, transport and
insurance industries. Additionally, there was a need to look at the language
and style used in the UCP to remove wording that could lead to inconsistent
application and interpretation.
When work on the revision
started, a number of global surveys indicated that, because of discrepancies,
approximately 70% of documents presented under letters of credit were being
rejected on first presentation. This obviously had, and continues to have, a
negative effect on the letter of credit being seen as a means of payment and,
if unchecked, could have serious implications for maintaining or increasing its
market share as a recognized means of settlement in international trade. The
introduction by banks of a discrepancy fee has highlighted the importance of
this issue, especially when the underlying discrepancies have been found to be
dubious or unsound. Whilst the number of cases involving litigation has not
grown during the lifetime of UCP 500, the introduction of the ICC’s Documentary
Credit Dispute Resolution Expertise Rules (DOCDEX) in October 1997
(subsequently revised in March 2002) has resulted in more than 60 cases being
decided.
To address these and other concerns,
the Banking Commission established a Drafting Group to revise UCP
500. It was also decided to create a
second group, known as the Consulting Group, to review and advise on early
drafts submitted by the Drafting Group. The Consulting Group, made up of over
40 individuals from 26 countries, consisted of banking and transport industry
experts. Ably co-chaired by John Turnbull, Deputy General Manager, Sumitomo
Mitsui Banking Corporation Europe Ltd, London and Carlo Di Ninni, Adviser,
Italian Bankers Association, Rome, the Consulting Group provided valuable input
to the Drafting Group prior to release of draft texts to ICC national
committees.
The Drafting Group began the
review process by analyzing the content of the official Opinions issued by the
Banking Commission under UCP 500. Some 500 Opinions were reviewed to assess
whether the issues involved warranted a change in, an addition to or a deletion
of any UCP article. In addition, consideration was given to the content of the
four Position Papers issued by the Commission in September 1994, the two
Decisions issued by the Commission (concerning the introduction of the euro and
the determination of what constituted an original document under UCP 500
sub-article 20(b) and the decisions issued in DOCDEX cases.
During the revision process,
notice was taken of the considerable work that had been completed in creating
the International Standard Banking Practice for the Examination of Documents
under Documentary Credits (ISBP), ICC Publication 645. This publication has
evolved into a necessary companion to the UCP for determining compliance of
documents with the terms of letters of credit. It is the expectation of the
Drafting Group and the Banking Commission that the application of the
principles contained in the ISBP, including subsequent revisions thereof, will
continue during the time UCP 600 is in force. At the time UCP 600 is
implemented, there will be an updated version of the ISBP to bring its contents
in line with the substance and style of the new rules.
The four Position Papers issued
in September 1994 were issued subject to their application under UCP 500;
therefore, they will not be applicable under UCP 600. The essence of the
Decision covering the determination of an original document has been incorporated
into the text of UCP 600. The outcome of the DOCDEX cases were invariably based
on existing ICC Banking Commission Opinions and therefore contained no specific
issues that required addressing in these rules.
One of the structural changes to
the UCP is the introduction of articles covering definitions (article 2) and
interpretations (article 3). 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. Similarly, the
article covering interpretations aims to take the ambiguity out of vague or
unclear language that appears in letters of credit and to provide a definitive
elucidation of other characteristics of the UCP or the credit.
During the course of the last
three years, ICC national committees were canvassed on a range of issues to
determine their preferences on alternative texts submitted by the Drafting
Group. The results of this exercise and the considerable input from national
committees on individual items in the text is reflected in the content of UCP
600. The Drafting Group considered, not only the current practice relative to
the documentary credit, but also tried to envisage the future evolution of that
practice.
This revision of the UCP
represents the culmination of over three years of extensive analysis, review,
debate and compromise amongst the various members of the Drafting Group, the
members of the Banking Commission and the respective ICC national committees.
Valuable comment has also been received from the ICC Commission on Transport
and Logistics, the Commission on Commercial Law and Practice and the Committee
on Insurance.
It is not appropriate for this
publication to provide an explanation as to why an article has been worded in
such a way or what is intended by its incorporation into the rules. For those
interested in understanding the rationale and interpretation of the articles of
UCP 600, this information will be found in the Commentary to the rules, ICC
Publication 601, which represents the Drafting Group’s views.
On behalf of the Drafting Group
I would like to extend our deep appreciation to the members of the Consulting
Group, ICC national committees and members of the Banking Commission for their
professional comments and their constructive participation in this process.
Special thanks are due to the
members of the Drafting Group and their institutions, who are listed below in
alphabetical order.
Nicole Keller – Vice President,
Service International Products, Dresdner Bank AG, Frankfurt, Germany;
Representative to the ICC Commission on Banking Technique and Practice;
Laurence
Kooy – Legal Adviser, BNP Paribas, Paris, France; Representative to the ICC
Commission on Banking Technique and Practice.
Katja Lehr – Business Manager,
Trade Services Standards, SWIFT, La Hulpe, Belgium, then Vice President,
Membership Representation, International Financial Services Association, New
Jersey, USA; Representative to the ICC Commission on Banking Technique and
Practice;
Ole Malmqvist – Vice President,
Danske Bank, Copenhagen, Denmark; Representative to the ICC Commission on
Banking Technique and Practice;
Paul Miserez – Head of Trade
Finance Standards, SWIFT, La Hulpe, Belgium; Representative to the ICC
Commission on Banking Technique and Practice;
René Mueller – Director, Credit Suisse, Zurich, Switzerland;
Representative to the ICC Commission on Banking Technique and Practice;
Chee Seng Soh – Consultant,
Association of Banks in Singapore, Singapore; Representative to the ICC
Commission on Banking Technique and Practice;
Dan Taylor – President and CEO,
International Financial Services Association., New Jersey USA; Vice Chairman,
ICC Commission on Banking Technique and Practice;
Alexander Zelenov – Director,
Vnesheconombank, Moscow, Russia; Vice Chairman, ICC Commission on Banking
Technique and Practice;
Ron Katz – Policy Manager, ICC
Commission on Banking Technique and Practice, International Chamber of
Commerce, Paris, France.
The undersigned had the pleasure of chairing the
Drafting Group.
It was through the generous
giving of their knowledge, time and energy that this revision was accomplished
so successfully. As Chair of the Drafting Group, I would like to extend to them
and to their institutions my gratitude for their contribution, for a job well
done and for their friendship. I would also like to extend my sincere thanks to
the management of ABN AMRO Bank N.V., for their understanding, patience and
support during the course of this revision process.
Gary Collyer
Corporate Director,
ABN AMRO Bank N.V., London,
England
and Technical Adviser to the ICC
Commission on Banking Technique and Practice November 2006
Application of UCP
The Uniform Customs and Practice
for Documentary Credits, 2007 Revision, ICC Publication no. 600
("UCP") are rules that apply to any documentary credit
("credit") (including, to the extent to which they may be applicable,
any standby letter of credit) when the text of the credit expressly indicates
that it is subject to these rules. They are binding on all parties thereto
unless expressly modified or excluded by the credit.
UCP 600 - Article 2
Definitions
For the purpose of these rules:
Advising
bank means the bank that advises the
credit at the request of the issuing bank.
Applicant
means the party on whose request
the credit is issued.
Banking day means a day on which a bank is regularly open at the place at
which an act subject to these rules
is to be performed.
Beneficiary
means the party in whose favour
a credit is issued.
Complying presentation means 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.
Confirmation means a definite undertaking of the confirming bank, in addition
to that of the issuing bank, to
honour or negotiate a complying presentation.
Confirming bank means the bank that adds its confirmation to a credit upon the
issuing bank's authorization or
request.
Credit means any arrangement, however named or described, that is
irrevocable and thereby constitutes a definite
undertaking of the issuing bank to honour a complying presentation.
Honour
means:
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.
Issuing
bank means the bank that issues a
credit at the request of an applicant or on its own behalf.
Negotiation means the purchase by the nominated bank of drafts (drawn on a
bank other than the nominated bank)
and/or documents under a complying presentation, by advancing or agreeing to
advance funds to the beneficiary on or before the banking day on which
reimbursement is due to the nominated bank.
Nominated Bank means the bank with which the credit is available or any bank in
the case of a credit available with
any bank.
Presentation means either the delivery of documents under a credit to the
issuing bank or nominated bank or
the documents so delivered.
Presenter
means a beneficiary, bank or
other party that makes a presentation.
Interpretations
For the purpose of these rules:
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.
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.
Branches of a bank in different countries are considered
to be separate banks.
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.
Unless required to be used in a
document, words such as "prompt", "immediately" or "as
soon as possible" will be disregarded.
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 words "from" and "after" when
used to determine a maturity date 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.
UCP 600 - Article 4
Credits v. Contracts
a. A
credit by its nature is a separate transaction from the sale or other contract
on which it may be based. Banks are
in no way concerned with or bound by such contract, even if any reference
whatsoever to it is included in the credit. Consequently, the undertaking of a
bank to honour, to negotiate or to fulfil any other obligation under the credit
is not subject to claims or defences by the applicant resulting from its
relationships with the issuing bank or the beneficiary.
A beneficiary can in no case
avail itself of the contractual relationships existing between banks or between
the applicant and the issuing bank.
b. An
issuing bank should discourage any attempt by the applicant to include, as an
integral part of the credit, copies
of the underlying contract, proforma invoice and the like.
UCP 600 - Article 5
Documents v. Goods, Services or Performance
Banks deal with documents and
not with goods, services or performance to which the documents may relate.
Availability, Expiry Date and Place for Presentation
a. A
credit must state the bank with which it is available or whether it is available
with any bank. A credit available
with a nominated bank is also available with the issuing bank.
b. A
credit must state whether it is available by sight payment, deferred payment,
acceptance or negotiation.
c.
A credit must not be issued
available by a draft drawn on the applicant.
d.
i. A
credit must state an expiry date for presentation. An expiry date stated for
honour or negotiation will be deemed
to be an expiry date for presentation.
ii. The place of the bank with which
the credit is available is the place for presentation. The place for
presentation under a credit available with any bank is that of any bank. A
place for presentation other than that of the issuing bank is in addition to
the place of the issuing bank.
e. Except
as provided in sub-article 29 (a), a presentation by or on behalf of the
beneficiary must be made on or
before the expiry date.
UCP 600 - Article 7
Issuing Bank Undertaking
a. Provided
that the stipulated documents are presented to the nominated bank or to the
issuing bank and that they
constitute a complying presentation, the issuing bank must honour if the credit
is available by:
i.
sight payment, deferred payment
or acceptance with the issuing bank;
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.
b.
An issuing bank is irrevocably
bound to honour as of the time it issues the credit.
c. An
issuing bank undertakes to reimburse a nominated bank that has honoured or
negotiated a complying presentation
and forwarded the documents to the issuing bank. Reimbursement for the amount
of a complying presentation under a credit available by acceptance or deferred
payment is due at maturity, whether or not the nominated bank prepaid or
purchased before maturity. An issuing bank's undertaking to reimburse a
nominated bank is independent of the issuing bank's undertaking to the beneficiary.
UCP 600 - Article 8
Confirming Bank Undertaking
a. Provided
that the stipulated documents are presented to the confirming bank or to any
other nominated bank and that they
constitute a complying presentation, the confirming bank must:
i.
honour, if the credit is
available by
a.
sight payment, deferred payment
or acceptance with the confirming bank;
c. deferred
payment with another 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;
d. acceptance
with another 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;
e.
negotiation with another
nominated bank and that nominated bank does not negotiate.
ii. negotiate, without recourse, if the credit is available
by negotiation with the confirming bank.
b. A
confirming bank is irrevocably bound to honour or negotiate as of the time it
adds its confirmation to the credit.
c. A
confirming bank undertakes to reimburse another nominated bank that has
honoured or negotiated a complying
presentation and forwarded the documents to the confirming bank. Reimbursement
for the amount of a complying presentation under a credit available by
acceptance or deferred payment is due at maturity, whether or not another
nominated bank prepaid or purchased before maturity. A confirming bank's undertaking
to reimburse another nominated bank is independent of the confirming bank's
undertaking to the beneficiary.
d. If
a bank is authorized or requested by the issuing bank to confirm a credit but
is not prepared to do so, it must
inform the issuing bank without delay and may advise the credit without
confirmation.
UCP 600 - Article 9
Advising of Credits and Amendments
a. A
credit and any amendment may be advised to a beneficiary through an advising
bank. An advising bank that is not a
confirming bank advises the credit and any amendment without any undertaking to
honour or negotiate.
b. By
advising the credit or amendment, the advising bank signifies that it has
satisfied itself as to the apparent
authenticity of the credit or amendment and that the advice accurately reflects
the terms and conditions of the credit or amendment received.
c. An
advising bank may utilize the services of another bank ("second advising
bank") to advise the credit and
any amendment to the beneficiary. By advising the credit or amendment, the
second advising bank signifies that it has satisfied itself as to the apparent
authenticity of the advice it has received and that the advice accurately
reflects the terms and conditions of the credit or amendment received.
d. A
bank utilizing the services of an advising bank or second advising bank to
advise a credit must use the same
bank to advise any amendment thereto.
e. If
a bank is requested to advise a credit or amendment but elects not to do so, it
must so inform, without delay, the
bank from which the credit, amendment or advice has been received.
f. If
a bank is requested to advise a credit or amendment but cannot satisfy itself
as to the apparent authenticity of
the credit, the amendment or the advice, it must so inform, without delay, the
bank from which the instructions appear to have been received. If the advising
bank or second advising bank elects nonetheless to advise the credit or
amendment, it must inform the beneficiary or second advising bank that it has
not been able to satisfy itself as to the apparent authenticity of the credit,
the amendment or the advice.
UCP 600 - Article 10
Amendments
a. Except
as otherwise provided by article 38, a credit can neither be amended nor
cancelled without the agreement of
the issuing bank, the confirming bank, if any, and the beneficiary.
b. An issuing bank is irrevocably bound by an amendment as of the
time it issues the amendment. A confirming
bank may extend its confirmation to an amendment and will be irrevocably bound
as of the time it advises the amendment. A confirming bank may, however, choose
to advise an amendment without extending its confirmation and, if so, it must
inform the issuing bank without delay and inform the beneficiary in its advice.
c. The
terms and conditions of the original credit (or a credit incorporating
previously accepted amendments) will
remain in force for the beneficiary until the beneficiary communicates its
acceptance of the amendment to the bank that advised such amendment. The
beneficiary should give notification of acceptance or rejection of an
amendment. If the beneficiary fails to give such notification, a presentation
that complies with the credit and to any not yet accepted amendment will be
deemed to be notification of acceptance by the beneficiary of such amendment.
As of that moment the credit will be amended.
d. A
bank that advises an amendment should inform the bank from which it received
the amendment of any notification of
acceptance or rejection.
e. Partial
acceptance of an amendment is not allowed and will be deemed to be notification
of rejection of the amendment.
f. A
provision in an amendment to the effect that the amendment shall enter into
force unless rejected by the
beneficiary within a certain time shall be disregarded.
UCP 600 - Article 11
Teletransmitted and Pre-Advised Credits and Amendments
a. An
authenticated teletransmission of a credit or amendment will be deemed to be
the operative credit or amendment,
and any subsequent mail confirmation shall be disregarded.
If a teletransmission states
"full details to follow" (or words of similar effect), or states that
the mail confirmation is to be the operative credit or amendment, then the
teletransmission will not be deemed to be the operative credit or amendment. The
issuing bank must then issue the operative credit or amendment without delay in
terms not inconsistent with the teletransmission.
b. A
preliminary advice of the issuance of a credit or amendment
("pre-advice") shall only be sent if the issuing bank is prepared to issue the operative credit or
amendment. An issuing bank that sends a pre-advice is irrevocably committed to
issue the operative credit or amendment, without delay, in terms not
inconsistent with the pre-advice.
UCP 600 - Article 12
Nomination
a. Unless
a nominated bank is the confirming bank, an authorization to honour or
negotiate does not impose any
obligation on that nominated bank to honour or negotiate, except when expressly
agreed to by that nominated bank and so communicated to the beneficiary.
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.
c. Receipt
or examination and forwarding of documents by a nominated bank that is not a
confirming bank does not make that
nominated bank liable to honour or negotiate, nor does it constitute honour or
negotiation.
UCP 600 - Article 13
Bank-to-Bank Reimbursement Arrangements
a. If
a credit states that reimbursement is to be obtained by a nominated bank
("claiming bank") claiming on
another party ("reimbursing bank"), the credit 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.
b. If a credit does not state that
reimbursement is subject to the ICC rules for bank-to-bank reimbursements, the following apply:
i.An
issuing bank must provide a reimbursing bank with a reimbursement authorization
that conforms with the availability
stated in the credit. The reimbursement authorization should not be subject to
an expiry date.
ii.A
claiming bank shall not be required to supply a reimbursing bank with a
certificate of compliance with the
terms and conditions of the credit.
iii.An
issuing bank will be responsible for any loss of interest, together with any
expenses incurred, if reimbursement
is not provided on first demand by a reimbursing bank in accordance with the
terms and conditions of the credit.
iv.A
reimbursing bank's charges are for the account of the issuing bank. However, if
the charges are for the account of
the beneficiary, it is the responsibility of an issuing bank to so indicate in
the credit and in the reimbursement authorization. If a reimbursing bank's
charges are for the account of the beneficiary, they shall be deducted from the
amount due to a claiming bank when reimbursement is made. If no reimbursement
is made, the reimbursing bank's charges remain the obligation of the issuing
bank.
c. An
issuing bank is not relieved of any of its obligations to provide reimbursement
if reimbursement is not made by a
reimbursing bank on first demand.
UCP 600 - Article 14
Standard for Examination of Documents
a. A
nominated bank acting on its nomination, a confirming bank, if any, and the
issuing bank must examine a
presentation to determine, on the basis of the documents alone, whether or not
the documents appear on their face to constitute a complying presentation.
b. A
nominated bank acting on its nomination, a confirming bank, if any, and the
issuing bank shall each have a
maximum of five banking days following the day of presentation to determine if
a presentation is complying. This period is not curtailed or otherwise affected
by the occurrence on or after the date of presentation of any expiry date or
last day for presentation.
c. A
presentation including one or more original transport documents subject to
articles 19, 20, 21, 22, 23, 24 or
25 must be made by or on behalf of the beneficiary not later than 21 calendar
days after the date of shipment as described in these rules, but in any event
not later than the expiry date of the credit.
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.
e. In
documents other than the commercial invoice, the description of the goods,
services or performance, if stated,
may be in general terms not conflicting with their description in the credit.
f. If
a credit requires presentation of a document other than a transport document,
insurance document or commercial
invoice, without stipulating by whom the document is to be issued or its data
content, banks will accept the document as presented if its content appears to
fulfil the function of the required document and otherwise complies with
sub-article 14 (d).
g. A
document presented but not required by the credit will be disregarded and may
be returned to the presenter.
h. If
a credit contains a condition without stipulating the document to indicate
compliance with the condition, banks
will deem such condition as not stated and will disregard it.
i. A
document may be dated prior to the issuance date of the credit, but must not be
dated later than its date of
presentation.
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.
k. The
shipper or consignor of the goods indicated on any document need not be the
beneficiary of the credit.
l. A
transport document may be issued by any party other than a carrier, owner,
master or charterer provided that
the transport document meets the requirements of articles 19, 20, 21, 22, 23 or
24 of these rules.
UCP 600 - Article 15
Complying Presentation
a.
When an issuing bank determines
that a presentation is complying, it must honour.
b. When
a confirming bank determines that a presentation is complying, it must honour
or negotiate and forward the
documents to the issuing bank.
c. When
a nominated bank determines that a presentation is complying and honours or
negotiates, it must forward the
documents to the confirming bank or issuing bank.
UCP 600 - Article 16
Discrepant Documents, Waiver and Notice
a. When
a nominated bank acting on its nomination, a confirming bank, if any, or the
issuing bank determines that a
presentation does not comply, it may refuse to honour or negotiate.
b. When
an issuing bank determines that a presentation does not comply, it may in its
sole judgement approach the
applicant for a waiver of the discrepancies. This does not, however, extend the
period mentioned in sub-article 14 (b).
c. When
a nominated bank acting on its nomination, a confirming bank, if any, or the
issuing bank decides to refuse to
honour or negotiate, it must give a single notice to that effect to the
presenter.
The notice must state:
i.
that the bank is refusing to
honour or negotiate; and
ii. each discrepancy in respect of which the bank refuses to
honour or negotiate; and
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.
d. The
notice required in sub-article 16 (c) must be given by telecommunication or, if
that is not possible, by other
expeditious means no later than the close of the fifth banking day following
the day of presentation.
e. A
nominated bank acting on its nomination, a confirming bank, if any, or the
issuing bank may, after providing
notice required by sub-article 16 (c) (iii) (a) or (b), return the documents to
the presenter at any time.
f. If an issuing bank or a confirming bank fails to act in
accordance with the provisions of this article, it shall be precluded from claiming that the documents do not constitute a
complying presentation.
g. When
an issuing bank refuses to honour or a confirming bank refuses to honour or
negotiate and has given notice to
that effect in accordance with this article, it shall then be entitled to claim
a refund, with interest, of any reimbursement made.
UCP 600 - Article 17
Original Documents and Copies
a.
At least one original of each
document stipulated in the credit must be presented.
b. A
bank shall treat as an original any document bearing an apparently original
signature, mark, stamp, or label of
the issuer of the document, unless the document itself indicates that it is not
an original.
c.
Unless a document indicates
otherwise, a bank will also accept a document as original if it:
i.
appears to be written, typed,
perforated or stamped by the document issuer's hand; or
ii. appears to be on the document issuer's original stationery;
or
iii. states that it is original, unless the statement appears
not to apply to the document presented.
d. If
a credit requires presentation of copies of documents, presentation of either
originals or copies is permitted.
e. If
a credit requires presentation of multiple documents by using terms such as
"in duplicate", "in two fold" or "in two copies", this will be satisfied by the
presentation of at least one original and the remaining number in copies,
except when the document itself indicates otherwise.
UCP 600 - Article 18
Commercial Invoice
a.
A commercial invoice:
i.
must appear to have been issued
by the beneficiary (except as provided in article 38);
ii. must be made out in the name of the applicant (except as
provided in sub-article 38 (g));
iii. must be made out in the same currency as the credit; and
iv. need not be signed.
b. A
nominated bank acting on its nomination, a confirming bank, if any, or the
issuing bank may accept a commercial
invoice issued for an amount in excess of the amount permitted by the credit,
and its decision will be binding upon all parties, provided the bank in
question has not honoured or negotiated for an amount in excess of that
permitted by the credit.
c. The
description of the goods, services or performance in a commercial invoice must
correspond with that appearing in
the credit.
UCP 600 - Article 19
Transport Document Covering at Least Two Different Modes
of Transport
a. A
transport document covering at least two different modes of transport
(multimodal or combined transport
document), however named, must appear to:
i.
indicate the name of the carrier
and be signed by:
-
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.
ii. indicate that the goods have
been dispatched, taken in charge or shipped on board at the place stated in the
credit, by:
-
pre-printed wording, or
- a stamp or notation indicating
the date on which the goods have been dispatched, taken in charge or shipped on
board.
The date of issuance of the
transport document will be deemed to be the date of dispatch, taking in charge
or shipped on board, and the date of shipment. However, if the transport
document indicates, by stamp or notation, a date of dispatch, taking in charge
or shipped on board, this date will be deemed to be the date of shipment.
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.
iv. be the sole original transport
document or, if issued in more than one original, be the full set as indicated
on the transport document.
v. contain terms and conditions of
carriage or make reference to another source containing the terms and
conditions of carriage (short form or blank back transport document). Contents
of terms and conditions of carriage will not be examined.
vi. contain no indication that it is subject to a charter
party.
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.
UCP 600 - Article 20
Bill of Lading
a.A bill of lading, however named, must appear to:
i.
indicate the name of the carrier
and be signed by:
-
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.
ii. indicate that the goods have
been shipped on board a named vessel at the port of loading stated in the
credit by:
-
pre-printed wording, or
-
an on board notation indicating
the date on which the goods have been shipped on board.
The date of issuance of the bill
of lading will be deemed to be the date of shipment unless the bill of lading
contains an on board notation indicating the date of shipment, in which case
the date stated in 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 the name of
the vessel, an on board notation indicating the date of shipment and the name
of the actual vessel is required.
iii. indicate shipment from the port of loading to the port
of discharge stated in the credit.
If the bill of lading does not
indicate the port of loading stated in the credit as the port of loading, or if
it contains the indication "intended" or similar qualification in
relation to the port of loading, an on board notation indicating the port of
loading as stated in the credit, the date of shipment and the name of the
vessel is required. This provision applies even when loading on board or
shipment on a named vessel is indicated by pre-printed wording on the bill of
lading.
iv. be the sole original bill of
lading or, if issued in more than one original, be the full set as indicated on
the bill of lading.
v. contain terms and conditions of
carriage or make reference to another source containing the terms and
conditions of carriage (short form or blank back bill of lading). Contents of
terms and conditions of carriage will not be examined.
vi. contain no indication that it is subject to a charter
party.
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.
UCP 600 - Article 21
Non-Negotiable Sea Waybill
a.
A non-negotiable sea waybill,
however named, must appear to:
i.
indicate the name of the carrier
and be signed by:
-
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.
ii. indicate that the goods have
been shipped on board a named vessel at the port of loading stated in the
credit by:
-
pre-printed wording, or
-
an on board notation indicating
the date on which the goods have been shipped on board.
The date of issuance of the
non-negotiable sea waybill will be deemed to be the date of shipment unless the
non-negotiable sea waybill contains an on board notation indicating the date of
shipment, in which case the date stated in the on board notation will be deemed
to be the date of shipment.
If the non-negotiable sea waybill contains the
indication "intended vessel" or similar qualification in relation to
the name of the vessel, an on board notation indicating the date of shipment
and the name of the actual vessel is required.
iii. indicate shipment from the port of loading to the port
of discharge stated in the credit.
If the non-negotiable sea
waybill does not indicate the port of loading stated in the credit as the port
of loading, or if it contains the indication "intended" or similar
qualification in relation to the port of loading, an on board notation
indicating the port of loading as stated in the credit, the date of shipment
and the name of the vessel is required. This provision applies even when
loading on board or shipment on a named vessel is indicated by pre-printed
wording on the non-negotiable sea waybill.
iv. be the sole original
non-negotiable sea waybill or, if issued in more than one original, be the full
set as indicated on the non-negotiable sea waybill.
v. contain terms and conditions of
carriage or make reference to another source containing the terms and
conditions of carriage (short form or blank back non-negotiable sea waybill).
Contents of terms and conditions of carriage will not be examined.
vi. contain no indication that it is subject to a charter
party.
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
non-negotiable sea waybill may indicate that the goods will or may be transhipped
provided that the entire carriage is
covered by one and the same non-negotiable sea waybill.
ii. A non-negotiable sea waybill
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 non-negotiable sea waybill.
d. Clauses
in a non-negotiable sea waybill stating that the carrier reserves the right to
tranship will be disregarded.
UCP 600 - Article 22
Charter Party Bill of Lading
a. A
bill of lading, however named, containing an indication that it is subject to a
charter party (charter party bill of
lading), must appear to:
-
the master or a named agent for
or on behalf of the master, or
-
the owner or a named agent for
or on behalf of the owner, or
-
the charterer or a named agent
for or on behalf of the charterer.
Any signature by the master,
owner, charterer or agent must be identified as that of the master, owner,
charterer or agent.
Any signature by an agent must
indicate whether the agent has signed for or on behalf of the master, owner or
charterer.
An agent signing for or on
behalf of the owner or charterer must indicate the name of the owner or
charterer.
ii. indicate that the goods have been
shipped on board a named vessel at the port of loading stated in the credit by:
-
pre-printed wording, or
-
an on board notation indicating
the date on which the goods have been shipped on board.
The date of issuance of the
charter party bill of lading will be deemed to be the date of shipment unless
the charter party bill of lading contains an on board notation indicating the
date of shipment, in which case the date stated in the on board notation will
be deemed to be the date of shipment.
iii. indicate shipment from the port
of loading to the port of discharge stated in the credit. The port of discharge
may also be shown as a range of ports or a geographical area, as stated in the
credit.
iv. be the sole original charter
party bill of lading or, if issued in more than one original, be the full set
as indicated on the charter party bill of lading.
b. A
bank will not examine charter party contracts, even if they are required to be
presented by the terms of the
credit.
UCP 600 - Article 23
Air Transport Document
a.
An air transport document,
however named, must appear to:
i.
indicate the name of the carrier
and be signed by:
-
the carrier, or
-
a named agent for or on behalf
of the carrier.
Any signature by the carrier or agent must be identified
as that of the carrier or agent.
Any signature by an agent must indicate that the agent
has signed for or on behalf of the carrier.
ii.indicate that the goods have been accepted for carriage.
iii. indicate the date of issuance.
This date will be deemed to be the date of shipment unless the air transport
document contains a specific notation of the actual date of shipment, in which
case the date stated in the notation will be deemed to be the date of shipment.
Any other information appearing
on the air transport document relative to the flight number and date will not
be considered in determining the date of shipment.
v. be the original for consignor or shipper, even if the
credit stipulates a full set of originals.
vi. contain terms and conditions of
carriage or make reference to another source containing the terms and
conditions of carriage. Contents of terms and conditions of carriage will not
be examined.
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.
UCP 600 - Article 24
Road, Rail or Inland Waterway Transport Documents
a.
A road, rail or inland waterway
transport document, however named, must appear to:
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
- indicate receipt of the goods by
signature, stamp or notation by the carrier or a named agent for or on behalf
of the carrier.
Any signature, stamp or notation
of receipt of the goods by the carrier or agent must be identified as that of
the carrier or agent.
Any signature, stamp or notation
of receipt of the goods by the agent must indicate that the agent has signed or
acted for or on behalf of the carrier.
If a rail transport document
does not identify the carrier, any signature or stamp of the railway company
will be accepted as evidence of the document being signed by the carrier.
ii. indicate the date of shipment or
the date the goods have been received for shipment, dispatch or carriage at the
place stated in the credit. Unless the transport document contains a dated
reception stamp, an indication of the date of receipt or a date of shipment,
the date of issuance of the transport document will be deemed to be the date of
shipment.
iii. indicate the place of shipment and the place of
destination stated in the credit.
b.
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.
c. In
the absence of an indication on the transport document as to the number of
originals issued, the number
presented will be deemed to constitute a full set.
d. For the purpose of this article,
transhipment means 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 stated in
the credit.
e.
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.
UCP 600 - Article 25
Courier Receipt, Post Receipt or Certificate of Posting
a.
A courier receipt, however
named, evidencing receipt of goods for transport, must appear to:
i. indicate
the name of the courier service and be stamped or signed by the named courier
service at the place from which the
credit states the goods are to be shipped; and
ii. indicate a date of pick-up or of
receipt or wording to this effect. This date will be deemed to be the date of
shipment.
b. A
requirement that courier charges are to be paid or prepaid may be satisfied by
a transport document issued by a courier
service evidencing that courier charges are for the account of a party other
than the consignee.
c. A
post receipt or certificate of posting, however named, evidencing receipt of
goods for transport, must appear to
be stamped or signed and dated at the place from which the credit states the
goods are to be shipped. This date will be deemed to be the date of shipment.
UCP 600 - Article 26
On Deck", "Shipper's Load and Count",
"Said by Shipper to Contain" and Charges Additional to Freight
a. A
transport document must not indicate that the goods are or will be loaded on
deck. A clause on a transport
document stating that the goods may be loaded on deck is acceptable.
b. A
transport document bearing a clause such as "shipper's load and
count" and "said by shipper to
contain" is acceptable.
c.
A transport document may bear a
reference, by stamp or otherwise, to charges additional to the freight.
UCP 600 - Article 27
Clean Transport Document
A bank will only accept a clean
transport document. A clean transport document is one bearing no clause or
notation expressly declaring a defective condition of the goods or their
packaging. The word "clean" need not appear on a transport document,
even if a credit has a requirement for that transport document to be
"clean on board".
UCP 600 - Article 28
Insurance Document and Coverage
a. An
insurance document, such as an insurance policy, an insurance certificate or a
declaration under an open cover,
must appear to be issued and signed by an insurance company, an underwriter or
their agents or their proxies.
Any signature by an agent or
proxy must indicate whether the agent or proxy has signed for or on behalf of
the insurance company or underwriter.
b. When
the insurance document indicates that it has been issued in more than one
original, all originals must be
presented.
c.
Cover notes will not be
accepted.
d.
An insurance policy is
acceptable in lieu of an insurance certificate or a declaration under an open
cover.
e. The
date of the insurance document must be no later than the date of shipment,
unless it appears from the insurance
document that the cover is effective from a date not later than the date of
shipment.
f.
i.The
insurance document must indicate the amount of insurance coverage and be in the
same currency as the credit.
ii. A requirement in the credit for
insurance coverage to be for a percentage of the value of the goods, of the
invoice value or similar is deemed to be the minimum amount of coverage
required.
If there is no indication in the
credit of the insurance coverage required, the amount of insurance coverage
must be at least 110% of the CIF or CIP value of the goods.
When the CIF or CIP value cannot
be determined from the documents, the amount of insurance coverage must be
calculated on the basis of the amount for which honour or negotiation is
requested or the gross value of the goods as shown on the invoice, whichever is
greater.
iii. The insurance document must
indicate that risks are covered at least between the place of taking in charge or
shipment and the place of discharge or final destination as stated in the
credit.
g. A
credit should state the type of insurance required and, if any, the additional
risks to be covered. An insurance
document will be accepted without regard to any risks that are not covered if
the credit uses imprecise terms such as "usual risks" or
"customary risks".
h. When
a credit requires insurance against "all risks" and an insurance
document is presented containing any
"all risks" notation or clause, whether or not bearing the heading
"all risks", the insurance document will be accepted without regard
to any risks stated to be excluded.
i.
An insurance document may
contain reference to any exclusion clause.
j.
An insurance document may
indicate that the cover is subject to a franchise or excess (deductible).
UCP 600 - Article 29
a.
If the expiry date of a credit
or the last day for presentation falls on a day when the bank to which presentation is to be made is closed
for reasons other than those referred to in article 36, the expiry date or the
last day for presentation, as the case may be, will be extended to the first
following banking day.
b. If
presentation is made on the first following banking day, a nominated bank must
provide the issuing bank or confirming
bank with a statement on its covering schedule that the presentation was made
within the time limits extended in accordance with sub-article 29 (a).
c.
The latest date for shipment
will not be extended as a result of sub-article 29 (a).
UCP 600 - Article 30
Tolerance in Credit Amount, Quantity and Unit Prices
a. The
words "about" or "approximately" used in connection with
the amount of the credit or the quantity or
the unit price stated in the credit are to be construed as allowing a
tolerance not to exceed 10% more or 10% less than the amount, the quantity or
the unit price to which they refer.
b. A tolerance not to exceed 5%
more or 5% less than the quantity of the goods is allowed, provided the credit does not state the quantity in
terms of a stipulated number of packing units or individual items and the total
amount of the drawings does not exceed the amount of the credit.
c. Even
when partial shipments are not allowed, a tolerance not to exceed 5% less than
the amount of the credit is allowed,
provided that the quantity of the goods, if stated in the credit, is shipped in
full and a unit price, if stated in the credit, is not reduced or that
sub-article 30 (b) is not applicable. This tolerance does not apply when the
credit stipulates a specific tolerance or uses the expressions referred to in
sub-article 30
(a).
UCP 600 - Article 31
Partial Drawings or Shipments
a.
Partial drawings or shipments
are allowed.
b. A
presentation consisting of more than one set of transport documents evidencing
shipment commencing on the same
means of conveyance and for the same journey, provided they indicate the same
destination, will not be regarded as covering a partial shipment, even if they
indicate different dates of shipment or different ports of loading, places of
taking in charge or dispatch. If the presentation consists of more than one set
of transport documents, the latest date of shipment as evidenced on any of the
sets of transport documents will be regarded as the date of shipment.
A presentation consisting of one
or more sets of transport documents evidencing shipment on more than one means
of conveyance within the same mode of transport will be regarded as covering a
partial shipment, even if the means of conveyance leave on the same day for the
same destination.
c. A
presentation consisting of more than one courier receipt, post receipt or
certificate of posting will not be regarded
as a partial shipment if the courier receipts, post receipts or certificates of
posting appear to have been stamped or signed by the same courier or postal
service at the same place and date and for the same destination.
UCP 600 - Article 32
Installment Drawings or Shipments
If a drawing or shipment by
installments within given periods is stipulated in the credit and any installment
is not drawn or shipped within the period allowed for that installment, the
credit ceases to be available for that and any subsequent installment.
UCP 600 - Article 33
Hours of Presentation
A bank has no obligation to accept a presentation
outside of its banking hours.
UCP 600 - Article 34
Disclaimer on Effectiveness of Documents
A bank assumes no liability or
responsibility for the form, sufficiency, accuracy, genuineness, falsification
or legal effect of any document, or for the general or particular conditions
stipulated in a document or superimposed thereon; nor does it assume any
liability or responsibility for the description, quantity, weight, quality,
condition, packing, delivery, value or existence of the goods, services or other
performance represented by any document, or for the good faith or acts or
omissions, solvency, performance or standing of the consignor, the carrier, the
forwarder, the consignee or the insurer of the goods or any other person.
UCP 600 - Article 35
Disclaimer on Transmission and Translation
A bank assumes no liability or
responsibility for the consequences arising out of delay, loss in transit,
mutilation or other errors arising in the transmission of any messages or
delivery of letters or documents, when such messages, letters or documents are
transmitted or sent according to the requirements stated in the credit, or when
the bank may have taken the initiative in the choice of the delivery service in
the absence of such instructions in the credit.
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.
A bank assumes no liability or
responsibility for errors in translation or interpretation of technical terms
and may transmit credit terms without translating them.
UCP 600 - Article 36
Force Majeure
A bank assumes no liability or
responsibility for the consequences arising out of the interruption of its business
by Acts of God, riots, civil commotions, insurrections, wars, acts of
terrorism, or by any strikes or lockouts or any other causes beyond its
control.
A bank will not, upon resumption
of its business, honour or negotiate under a credit that expired during such
interruption of its business.
UCP 600 - Article 37
Disclaimer for Acts of an Instructed Party
a. A
bank utilizing the services of another bank for the purpose of giving effect to
the instructions of the applicant
does so for the account and at the risk of the applicant.
b. An
issuing bank or advising bank assumes no liability or responsibility should the
instructions it transmits to another
bank not be carried out, even if it has taken the initiative in the choice of
that other bank.
c. A
bank instructing another bank to perform services is liable for any
commissions, fees, costs or expenses ("charges")
incurred by that bank in connection with its instructions.
If a credit states that charges
are for the account of the beneficiary and charges cannot be collected or
deducted from proceeds, the issuing bank remains liable for payment of charges.
A credit or amendment should not
stipulate that the advising to a beneficiary is conditional upon the receipt by
the advising bank or second advising bank of its charges.
d. The
applicant shall be bound by and liable to indemnify a bank against all
obligations and responsibilities imposed
by foreign laws and usages.
UCP 600 - Article 38
Transferable Credits
a. A
bank is under no obligation to transfer a credit except to the extent and in
the manner expressly consented to by
that bank.
b.
For the purpose of this article:
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.
c. Unless
otherwise agreed at the time of transfer, all charges (such as commissions,
fees, costs or expenses) incurred in
respect of a transfer must be paid by the first beneficiary.
d. A
credit may be transferred in part to more than one second beneficiary provided
partial drawings or shipments are
allowed.
A transferred credit cannot be
transferred at the request of a second beneficiary to any subsequent
beneficiary. The first beneficiary is not considered to be a subsequent
beneficiary.
e. Any
request for transfer must indicate if and under what conditions amendments may
be advised to the second
beneficiary. The transferred credit must clearly indicate those conditions.
f. If
a credit is transferred to more than one second beneficiary, rejection of an
amendment by one or more second
beneficiary does not invalidate the acceptance by any other second beneficiary,
with respect to which the transferred credit will be amended accordingly. For
any second beneficiary that rejected the amendment, the transferred credit will
remain unamended.
g. The
transferred credit must accurately reflect the terms and conditions of the
credit, including confirmation, if
any, with the exception of:
-
the amount of the credit,
-
any unit price stated therein,
-
the expiry date,
-
the period for presentation, or
- the latest shipment date or
given period for shipment, any or all of which may be reduced or curtailed.
The percentage for which
insurance cover must be effected may be increased to provide the amount of
cover stipulated in the credit or these articles.
The name of the first beneficiary may be substituted for
that of the applicant in the credit.
If the name of the applicant is
specifically required by the credit to appear in any document other than the
invoice, such requirement must be reflected in the transferred credit.
h. The
first beneficiary has the right to substitute its own invoice and draft, if
any, for those of a second beneficiary
for an amount not in excess of that stipulated in the credit, and upon such
substitution the first beneficiary can draw under the credit for the
difference, if any, between its invoice and the invoice of a second
beneficiary.
i. If
the first beneficiary is to present its own invoice and draft, if any, but
fails to do so on first demand, or if
the invoices presented by the first beneficiary create discrepancies that did
not exist in the presentation made by the second beneficiary and the first
beneficiary fails to correct them on first demand, the transferring bank has
the right to present the documents as received from the second beneficiary to
the issuing bank, without further responsibility to the first beneficiary.
j. The
first beneficiary may, in its request for transfer, indicate that honour or
negotiation is to be effected to a
second beneficiary at the place to which the credit has been transferred, up to
and including the expiry date of the credit. This is without prejudice to the
right of the first beneficiary in accordance with sub-article 38 (h).
k. Presentation of documents by or
on behalf of a second beneficiary must be made to the transferring bank.
UCP 600 - Article 39
Assignment of Proceeds
The fact that a credit is not
stated to be transferable shall not affect the right of the beneficiary to
assign any proceeds to which it may be or may become entitled under the credit,
in accordance with the provisions of applicable law. This article relates only
to the assignment of proceeds and not to the assignment of the right to perform
under the credit.
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