Uniform Customs and Practice that govern the operation of letters of credit. (25.X. 2006, UCP N 600, сomes into effect on 01 July 2007)

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UNIFORM CUSTOMS AND PRACTICE

that govern the operation of letters of credit.

25.X. 2006, UCP N 600

(the latest revision)

Comes into effect on 01 July 2007

See the text of the document in Russian

Introduction

Article 1. Application of UCP

Article 2. Definitions

Article 3. Interpretations

Article 4. Credits v. Contracts

Article 5. Documents v. Goods, Services or Performance

Article 6. Availability, Expiry Date and Place for Presentation

Article 7. Issuing Bank Undertaking

Article 8. Confirming Bank Undertaking

Article 9. Advising of Credits and Amendments

Article 10. Amendments

Article 11. Teletransmitted and Pre-Advised Credits and Amendments

Article 12. Nomination

Article 13. Bank-to-Bank Reimbursement Arrangements

Article 14. Standard for Examination of Documents

Article 15. Complying Presentation

Article 16. Discrepant Documents, Waiver and Notice

Article 17. Original Documents and Copies

Article 18. Commercial Invoice

Article 19. Transport Document Covering

at Least Two Different Modes of Transport

Article 20. Bill of Lading

Article 21. Non-Negotiable Sea Waybill

Article 22. Charter Party Bill of Lading

Article 23. Air Transport Document

Article 24. Road, Rail or Inland Waterway

Transport Documents

Article 25. Courier Receipt, Post Receipt or

Certificate of Posting

Article 26. On Deck", "Shipper's Load and Count",

"Said by Shipper to Contain" and

Charges Additional to Freight

Article 27. Clean Transport Document

Article 28. Insurance Document and Coverage

Article 29.

Article 30. Tolerance in Credit Amount, Quantity

and Unit Prices

Article 31. Partial Drawings or Shipments

Article 32. Instalment Drawings or Shipments

Article 33. Hours of Presentation

Article 34. Disclaimer on Effectiveness of Documents

Article 35. Disclaimer on Transmission and Translation

Article 36. Force Majeure

Article 37. Disclaimer for Acts of an Instructed Party

Article 38. Transferable Credits

Article 39. Assignment of Proceeds

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.

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 Commerces (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 ICCs 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