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For better understanding pl go through all slides and try to understand the logic
Article 1
Will apply to any documentary credit ("credit") (including 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.
UCPDC 600- www.rmg-guide.com


  •  Advising Bank means the bank that advised 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 rule 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.


  •  Issuing bank means the bank that issues a credit at the request of an applicant or on its own behalf.
  •  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.

  • 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.
  • When used to determine a period of shipment the words “before” and “after”exclude the date mentioned.
  • The words “to”,”until”,”till”,”from” and “between” include the date mentioned.
  •  For maturity date the words “from” and “after” exclude the date mentioned.
  • For determining period of shipment,the words”from” include the date and “after” excludes the date mentioned

Article 4-Credits v. Contracts

A credit is a separate transaction from the sale or other contract on which it may be based.

An issuing bank should discourage attempt to include, as an integral part of the credit, copies of the underlying contract, proforma invoice etc.
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.
Article 6

  • 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.
  • A credit must state whether it is available by sight payment, deferred payment, acceptance or negotiation.
  • A credit must not be issued available by a draft drawn on the applicant.
Article 6
A credit must state an expiry date for presentation.

  • The place of the bank with which the credit is available is the place for presentation.
  • A place for presentation other than that of the issuing bank is in addition to the place of the issuing bank.
  • A presentation by or on behalf of the beneficiary must be made on or before the expiry date.
Article 7-Issuing Bank’s


  • An issuing bank is irrevocably bound to honour a complying presentation whether nominated bank honors or not.
  • An issuing bank’s undertaking to reimburse a nominated bank is independent of issuing bank’s undertaking to beneficiary.
Article 8-Confirming bank’s


  • A confirming bank’s undertaking to reimburse a nominated bank is independent of issuing bank’s undertaking to beneficiary.
  • Nominated bank may prefer not to add confirmation but communicate to the issuing bank without delay.

Article 9-Advising Credits and Amendments

  • Advising bank advises without any commitment on its part.
  • Advising constitutes apparent authenticity of L/C. (Applicable to II advising bank too).
  •  When not willing to advise should inform without delay.
  • If authenticity could not be verified should state to beneficiary and take up with issuing bank
Article 10-Amendments
  • Should be with consent of issuing bank, confirming bank and beneficiary.
  • Confirming bank if not agreeable to amendment should inform without delay.
  • Beneficiary should confirm acceptance/rejection. Presentation complying will be construed as acceptance.
  • Partial acceptance not acceptable.
  • Time frame in L/C for acceptance can be ignored.
Article 11-Preadvice
  • When authenticated tele transmission received mail confirmation will be disregarded and vice versa.
  • When authenticated message to follow issuing bank should send without delay.
  • When pre advice is issued issuing bank is committed to issue authenticated message.
Article 12 Nomination
  • If nominated bank is not confirming bank it is not bound to honor or negotiate but should so inform issuing bank without delay.
  • By nominating issuing bank authorities nominated bank to negotiate.
  • Forwarding documents by nominated bank does not make it liable to negotiate.
Article 13-Bank to bank

  • When reimbursement is specified L/C should state it is under URR 525.
  • Issuing bank should provide reimbursement authority without expiry.
  • Compliance certificate is not necessary.
  • Issuing bank is responsible for interest/charges if reimbursing bank does not reimburse on I demand.
  • Charges are for issuing bank if L/C is silent.

Article 14- Standard examination
  • 5 banking days following day of presentation. Expiry does not curtail this time.
  • Data in document should not be inconsistent with that of L/C.
  • Description of goods may not be identical but should correspond.
If not mentioned any document issued is acceptable. If not required by credit return document.

Article 14- Standard examination
  • Compliance without document condition may be ignored.
  • Documents may be dated prior to credit but not later than date of presentation.
  • Address of beneficiary & applicant need not be identical but be in same country.
  • Consignor/shipper need not be beneficiary.
  • Transport document may be issued by anybody other than owner/carrier.
Article 15-complying presentation
  • When documents are presented complying with the terms of L/C
  • Issuing bank and confirming bank should honour and Nominated bank should forward the documents.
  • Article 16-Discrepent Documents
  • If not complying issuing bank/confirming bank can refuse to honour. 
  • Issuing bank may seek waiver but does not extend ‘5’ days.
  • Single notice of dishonour should be given.
Article 16-Discrepant Documents
  • Should list discrepancies, holding or returning or acting according to previous instructions.
  • Should be given through expeditious means.
  • If notice is not given issuing bank can not claim it later. It is entitled to refund of reimbursement on refusal.
Article 17-original documents

  • One original should be presented.
  • Will be considered original if not specifically mentioned as not original and by apparent authenticity.
  • When copies are stipulated either originals or copies are acceptable.
  • Two fold or more will be satisfied with one original and rest copies.
Article 18-Commercial Invoice

  • Should apparently appear to have been issued by beneficiary.
  • In the name of the applicant.
  • In the same currency of credit.
  • Need not be signed.
  • Invoice in excess value may be permitted at the discretion if honour is not for more than L/C amount. Binding on all parties.
Articles 19, 20, 21 & 22

  • Signed by carrier/representative indicating date of despatch/shipped/place/discharge/intended vessal/not subject to charter party/terms of carriage/transhipment.
  • Transhipment permitted even if L/C prohibits the same. If carrier reserves the right it may be ignored.
  • Charter party contract need not be looked into.
Article 23, 24 and 25

23: A/W bill: signature/accepatance for carriage/date of issuance /departure/ destination/terms
and transhipment.

24: Railways: Any duplicate will be construed as original.

25: Courier/Post: name/signature/
Place of despatch/courier charges notation.
Date of receipt will be date of shipment.
Article 26- on deck-shippers load and count-said by shipper to contain

Transport document should not indicate that goods will be loaded on deck. A clause that goods
may be loaded on deck is acceptable.

Shippers load and count, said to contain are acceptable.

Transport document may bear a reference to charges additional to freight.
Article 27-Clean Transport


Bank will accept only clean transport document.

It is one not indicating any defective condition of goods or packaging.

The word clean need not appear on the document.
Article 27-Insurance Documents
Should signed by Co/agent and in full set.

 Cover note not acceptable

Document later than shipment not acceptable. (if cover not available).

Currency of policy and L/C should be same.

Coverage if not specified should be for 110%.
Article 27-Insurance Documents
If CIF/CIP cannot be ascertained insurance value may be based on negotiated value or gross
value of invoice whichever is more.

Risk should be between shipment & discharge.
Risk to be specified. Notations like all or customary or usual will disregard any exclusion clause.

Article 29- Extension of Expiry Date
If the bank is closed on expiry day the following banking day will be the expiry day.

The latest date of shipment will however be not extended for this purpose.

Nominated bank should certify in the covering schedule that presentation was within time limit.
Article 30-Tolerance in credit


About or approximately for quantity or unit price- > or < 10%.

When not mentioned > or < 5% is allowed if no of packets are not mentioned.

When partial shipment is allowed tolerance is > or < 5%.

In all cases should not exceed value of credit?
Article 31-Partial shipment/drawings
Same means of conveyance-same journey-same destination-different dates-different ports of loading and discharge- not partial shipment. Latest date of shipment will be date of shipment.

More than one means of conveyance – partial shipment even if conveyance leave same day.

More than one courier receipt for same destination from same place booked on same day will
not constitute partial shipment.
Article 32 and 33
32 Instalment drawings /shipments:
When credit stipulates instalment drawings/shipment and if and when one installment fails the entire credit ceases.

33 Hours of Presentation:
Bank has no obligation to accept presentation outside banking hours
A Bank assumes no liability or responsibility on the effectiveness of the documents such as sufficiency, accuracy or genuineness.
Article 35 Disclaimer on

Transmission and translation
Banks assumes no responsibility for transmission mutilation in its choice of transmission.

When complying documents negotiated or not, are lost in transit, issuing bank or confirming
bank should honour.

Banks have no responsibility for errors in translation and interpretation of technical terms.

May transmit without translating.
Article 36-Force Majeure
Bank assumes no responsibility for consequences of interruption because of acts of God, riots,
civil commotions, insurrections, wars, acts of terrorism, strikes lockouts etc.

Upon resumption honour or negotiate.
Article 37- Disclaimer
Bank utilising services of another bank for appilcant’s instruction will be at his risk.

Not responsible if not carried out.

Instructing bank liable for charges of instructed bank.
Even if charges are a/c of beneficiary, issuing bank liable to pay.

L/C/Amendment should not say charges only on acceptance.

Applicant indemnifies issuing bank for foreign laws.
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” and

that may be made available in whole or in part to another beneficiary (“second beneficiary”) at
the request of the beneficiary (“first beneficiary”).
Article 38 Transferable Credits
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.
Article 38 Transferable Credits
d. A transferred credit cannot be transferred at the request of a second beneficiary to any
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.
Article 38-Transferable Credit
F. rejection by one II beneficiary does not

Invalidate acceptance by other II beneficiary.

 It will remain unamended for rejector and amended for acceptor.
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.
Article 38 g) Transferable Credits

The name of the first beneficiary may be substituted for that of the applicant in the credit,

but 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 fulfilled.
Article 38 Transferable Credits
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
 the first beneficiary can draw under the credit for the difference, if any, between its invoice and
the invoice of a second beneficiary.
Article 38 I Transferable Credits
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
Article 38 Transferable Credits
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).
Article 38 Transferable Credits
k. Presentation of documents by or on behalf of a second beneficiary must be made to the
transferring bank.
Article 39-Assignment of Proceeds
Even if a credit does not state it is transferable the beneficiary can assign proceeds and it will be
entitled under the credit and according to law.

This is only for assignment of proceeds and not for assignment of performance under the terms
of the credit.

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