Documentary Credit 2007 revision UCP 600

1 Documentary Credit 2007 revisionDocumentary Credit 2007 revisionUCP 600 UCP 600 11. July .11. July . 200200991122 Effective July 1, 2007 Effective July 1, 2007 Article 1 Application of ucp ucp 600 are rules Expressly indicatesin the Credit Applicable also to standby Credit Binding on all parties unlessexpresslymodified orUCP 600 General Provisions and Definitions33 Binding on all parties unlessexpresslymodified orexcludedUse of SWIFT:40E:40E: Applicable RulesApplicable RulesUCP LATEST VERSIONUCP LATEST VERSIONUse of telex or letter:Examples of express indication:UCP 600144 This Credit is subject to the Uniform Customs and Practice This Credit is subject to the Uniform Customs and Practice for Documentary Creditsfor Documentary Credits,, 2007 2007 RRevision, ICC Publication evision, ICC Publication No.

2 Credit is subject to UCP 600 This Credit is subject to UCP 600 Examples of an exclusion or modification to a rule:Contrary to article 32 of the UCP, thContrary to article 32 of the UCP, this is Credit remaincredit remainssvalid for subsequent instalvalid for subsequent installlments despite any shipment ments despite any shipment or drawing not made within the period drawing not made within the period 28(c) does not apply. Article 28(c) does not 600155 Documents must not be dated earlier than the date ofDocuments must not be dated earlier than the date ofthe issuance of this issuance of this bankHHonourApplicantIIssuing bankHonourArticle 2 DefinitionsUCP 600 General Provisions and DefinitionsCertain terms are defined, so that they provide references whenCertain terms are defined.

3 So that they provide references whensuch terms are used in the articlessuch terms are used in the articles66 BBanking dayBeneficiaryCComplying presentationConfirmationConfirming bankCreditIIssuing bankNNegotiationNominated bankPPresentationPresenterBanking dayNegotiationPresenterPresentationCompl ying presentationNominated bank Day on which a bank is regularly open for performance of an act subject to these rulesTrade DayUCP 600277 Trade HallBanking HallSATURDAYSATURDAY Presentation in accordance with Terms & conditions of the Credit Applicable UCP provisions International standard banking practiceComplying PresentationUCP 600288 What is international standard What is international standard banking practice ? banking practice ? Is it referring to the ISBP ?Is it referring to the ISBP ?

4 HonourPay at sightPay at sightIncur deferred payment undertakingIncur deferred payment undertakingPay at maturityPay at maturityAccept bill of exchangeAccept bill of exchangePay at maturityPay at maturityFor Credit available by +For Credit available by + Sight paymentSight payment Deferred paymentDeferred payment Acceptance Acceptance Honour & NegotiationUCP 600299 Pay at maturityPay at maturity Negotiation Purchase by the nominated bank of drafts (drawn on another bank) and/or documents under a complying presentation, By advancing or agreeing to advance funds to beneficiary, on or before the banking day on which reimbursement is due to thenominated bank. The bank with which the Credit is available, or any bank in the case of a freely available creditNominated Bank; Presentation; PresenterUCP 6002 Presentation Delivery of documents to issuing bank or nominated bank; or The documents so delivered1010 Presenter Party that makes a presentationArticle 3 Interpretations Where applicable, words in the singular include the plural Where applicable, words in the singular include the plural and vice vice versa.

5 No more (s) - Document instead of Document(s) A Credit is irrevocable even if no indication to that Credit is irrevocable even if no indication to that 600 General Provisions and Definitions111130 days 30 days fromfromshipment dateshipment date30 days 30 days afteraftershipment dateshipment date==Shipment date: 1 AUG 2007 Shipment date: 1 AUG 2007 Maturity date: 31 AUG 2007 Maturity date: 31 AUG 2007 For determining maturity date, the words from and after For determining maturity date, the words from and after exclude the date exclude the date mentionedmentioned A Credit is irrevocable even if no indication to that Credit is irrevocable even if no indication to that A documents may be signed by handwriting, facsimile signature,perforated signature, stamp, symbol or any other mechanical orelectronic method of authentication.

6 A requirement for a document to be legalized, visaed, certified orsimilar will be satisfied by any signature, mark, stamp or label onthe document which appears to satisfy that 60031212the document which appears to satisfy that requirement. Branches of a bank in different countries are considered to beseparatebank. 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 Unless required to be used in a document, words such as prompt , immediately or as soon as possible will be disregarded. Expression on or about or similar is a stipulation that an event is tooccur five calendar days before until five calendar days after the specified date, both start and end dates included.

7 For determining shipment period:UCP 60031313 For determining shipment period:4 words to , until , till , from and between include the date or dates words before and after exclude the date Terms first half and second half of a month means the 1st 15thand16th last day of the month, all dates Terms beginning , middle and end of a month means the 1st 10th,the 11th 20thand 21st last day of the month, all days inclusive. For determining a period of shipment, the words from and after have different meanings From includes the date mentioned After excludes the date mentionedInterpretationsUCP 6003 Shipment to be effectedShipment to be effectedEarliest shipment dateEarliest shipment date==1414 Shipment to be effectedShipment to be effectedfromfromAugust 10thAugust 10thEarliest shipment dateEarliest shipment dateis August 10this August 10th==Shipment to be effectedShipment to be effectedafter after August 10thAugust 10thEarliest shipment dateEarliest shipment dateis August 11this August 11th== Independence Principle 4 L/C is a separate transaction from the underlying contract Banks should discourageany attempt to include contract as integral part of L/CArticle 4 - Credits v.

8 ContractsUCP 600 General Provisions and Definitions1515 Contract as per Contract Details as per Contract , which is , which is appended and forms an appended and forms an integral part of the Credit . integral part of the Credit . DiscouragedDiscouraged ????Article 5 - Documents v. Goods/Services/Performance Banksdeal with documents and not with goods, services or performances to which the documents may relate. UCP 600 General Provisions and Definitions1616 Article 6 - Availability, Expiry Date and Place for Presentation L/C must + State the bank with which it is available, or that it is available with any bank (available with a nominated bank also available withthe issuing bank)UCP 600 Liabilities and Responsibilities1717 State that it is available by sight payment, deferred payment, acceptance or negotiation Not be available by draft on applicantExamples.

9 Available with issuing bank by deferred paymentAvailable with issuing bank by deferred paymentAvailable with Bank XYZ by paymentAvailable with Bank XYZ by paymentAvailable with Available with any bankany bank by by negotiation negotiationAvailability, Expiry Date & Place for Presentation Place for presentation Bank with which the L/C is available, or Any bank, if the L/C is available with any bank, and Issuing bankUCP 6006 Expiry date Last day for presentation of documents1818 Issuing bankL/C available with any bankL/C available with Bank Any bank Any Issuing bank Issuing Bank XYZ Bank Issuing bank Issuing bankPlace for presentationPlace for presentationArticle 7 Issuing Bank Undertaking Honour complying presentation made to nominated bank or to issuing bank itself Reimburse nominated bank that has honoured/negotiated and forwarded complying documents to issuing bank Irrevocably bound as of the time L/C is issuedUCP 600 Liabilities and Responsibilities1919 Issuing bank s undertaking to reimburse nominated bank is independent of its undertaking to beneficiary Irrevocably bound as of the time L/C is issued For usance L/C.

10 Reimbursement is due at maturity of deferred payment undertaking or acceptance, whether or not nominated bank prepaidor purchased before maturityArticle 8 Confirming Bank Undertaking Honour a complying presentation, or negotiate without recourse Reimburse nominated bank that has honoured/negotiated and forwarded complying documents to confirming bank Irrevocably bound as of the time of confirmation For usance L/C, reimbursement is due at maturity of deferred payment UCP 600 Liabilities and Responsibilities2020 Confirming bank s undertaking to reimburse nominated bank is independent of its undertaking to beneficiary For usance L/C, reimbursement is due at maturity of deferred payment undertaking or acceptance, whether or not nominated bank prepaid or purchased before maturityArticle 9 - Advising of Credits and Amendments By advising an L/C, the advising bank signifies.