UCPDC 600
UCPDC 600
For better understanding pl go
through all slides and try to understand the logic
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.
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.
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DEFINITIONS
- 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.
Banks deal with documents and not
with goods, services or performance to which the documents may relate.
- 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.
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.
Undertaking
- 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.
Undertaking
- 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
- 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.
- 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.
- 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.
Reimbursement
- 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.
- 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.
- 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.
- 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.
- 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
Document
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.
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%.
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.
Amount
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?
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.
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.
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.
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.
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.
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”).
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.
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.
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.
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.
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.
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.
transferring bank.
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.
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.
of the credit.
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