Dc ucp 600 for lc

Documentary Credits –
UCP 600

The Institute of Bankers, Pakistan
February 20-21, 2008

Nemat Ali, SEVP, Soneri Bank Ltd
Abid Aziz Merchant, GM Pakistan, Mashreqbank

1

A Quote by Bernard Wheble, CBE
Hon. Chairman, ICC Commission on Banking Technique
It still has to be appreciated, however, that UCP are not – and cannot
be – intended to give a precise answer to each and every problem
arising in practice.
Those concerned with international trade, whether in banking,
commerce and industry, transport or insurance, should not act like
robots. Whilst taking full advantage of the overall guidance given by
UCP, they should still apply their own intelligence and experience for
the solution of the occasional essentially individual problem. Better still
if they can avoid the problem ever arising, by the early use of
common-sense – unfortunately the least common of senses.
Bankers, for example, as experts in this method of payment, could
help their customers – and themselves – by timely advice to the
applicant so that he gives instructions which produce a workable credit
at the outset and to the beneficiary so that he knows precisely what he
has to do to get payment under the credit.
In fact, UCP needs to be supplemented by what can be described as a
form of education, with a constant readiness on the part of those who
have the knowledge to impart it, and a matching willingness on the
part of all concerned to receive it – and act on it.

2

UCP 500 Articles Not Covered in UCP 600
During the course of the revision of UCP 500 it was decided that the
content of a number of articles and sub-articles would not be included in
UCP 600. We will examine the rationale behind those decisions.
Article 5 – Instructions to Issue/Amend Credits
Sub-article 6 (b) – Revocable v Irrevocable Credits
Article 8 – Revocation of a Credit
Article 12 – Incomplete or Unclear Instructions
Article 38 – Other Documents
Sub-article 14 (f) – Discrepant Documents and Notice
Sub-article 33 (a), (b-part), (c) and (d-part) – Freight
Payable/Prepaid Transport Documents
Sub-article 42 (c) – Expiry Date and Place for Presentation of
Documents
Sub-article 46 (a) – General Expressions as to Dates for Shipment

3

Issue/Amend Credits – UCP 500 Article 5 –
Instructions to Issue/Amend Credits
Article 5 of UCP 500 which related to instructions to issue and
amend credits was seen as an article that stated the obvious.
For example sub-article 5 (a) referred to the need for a credit
and any amendment to be complete and precise.
UCP 500 sub-article 5 (a)
Instructions for the issuance of a Credit, the Credit itself,
instructions for an amendment thereto, and the amendment
itself, must be complete and precise.
Similarly, sub-article 5 (b) referred to the need for a credit and
any relevant amendment to state precisely the documents
against which payment, acceptance or negotiation was to be
made.
UCP 500 sub-article 5 (b)
All instructions for the issuance of a Credit and the Credit itself
and, where applicable, all instructions for an amendment
thereto and the amendment itself, must state precisely the
document(s) against which payment, acceptance or negotiation
is to be made.
4

Issue/Amend Credits – UCP 500 Article 5 –
Instructions to Issue/Amend Credits (cont’d)
Outside of obvious errors or omissions, an advising
bank would find it almost impossible to determine
whether a credit was complete. Where an issuing
bank omitted to list a document or a condition, it may
not be apparent that such an omission had occurred.
The need for sub-article discouraging the issuance of
a credit by reference to a previously issued credit has
been negated through the advances in, and use of,
technology for the delivery of a credit application and
the issuance of the credit.
The absence of a specific rule in UCP 600 in relation to
instructions to issue or amend credits does not relieve
issuing banks from their duty of care for the proper
creation, completeness and content of their credit or
any amendment thereto.
5

Revocation of a Credit – UCP 500 Article 8 – Revocation
of a Credit and UCP 500 Sub-article 6 (b) – Revocable v.
Irrevocable Credits
UCP 600 does not contain any reference to the issuing
or handling of revocable credits due to their minimal
usage today.
For a bank to issue a revocable credit in the future,
they have two options:
To issue the credit subject to UCP 600, but include a
specific condition that the credit is revocable and
include the full conditions relating to the revocability
and handling of the credit – which will, invariably,
come down to incorporation of the basic conditions
expressed in article 8 of UCP 500.
To issue the credit subject to UCP 500; provided all
parties are in agreement to the usage of those rules.

6

Unclear Instructions – UCP 500 Article 12 –
Incomplete or Unclear Instructions
Article 12 of UCP 500 covered the issuance of a preliminary
notification, by the advising bank, in the event a credit or an
amendment was incomplete or unclear in its terms.
If a credit is received that is unworkable or incomplete there is
no necessity for a rule to instruct an advising bank that they
should seek clarification or request a complete message.
Similarly, it is not necessary to provide a rule that the issuing
bank must give the appropriate information without delay.
The decision as to whether an advising bank provides a
preliminary advice of a credit or amendment should be
governed by the information that is before that advising bank
and not be subject to a rule that may not take account of the
reasons why a bank sought further clarification in the first
place.
The absence of a specific rule in UCP 600 in relation to
incomplete or unclear instructions does not relieve issuing
banks from their duty of care for the proper creation,
completeness and content of their credit or any amendment
thereto.
7

Reserve or Indemnity – UCP 500 Sub
-

a
rticle 14

(f) – Discrepant Documents and Notice
Whether a nominated bank has honoured or negotiated under
reserve or indemnity is of no concern to an issuing bank or
confirming bank as it does not affect or influence their
determination as to whether or not they will refuse or take up
documents.
UCP 500 sub-article 14 (f)
If the remitting bank draws the attention of the Issuing Bank
and/or Confirming Bank, if any, to any discrepancy(ies) in the
document(s) or advises such banks that it has paid, incurred a
deferred payment undertaking, accepted Draft(s) or negotiated
under reserve or against an indemnity in respect of such
discrepancy(ies), the Issuing Bank and/or Confirming Bank, if
any, shall not be thereby relieved from any of their obligations
under any provision of this Aritcle. Such reserve or indemnity
concerns only the relations between the remitting bank and the
party towards whom the reserve was made, or from whom, or
on whose behalf, the indemnity was obtained.
UCP 600 does not contain an equivalent of sub-article 14 (f).
8

Freight Payable/Prepaid – UCP 500 Sub-articles 33 (a),
(b-part), (c) and (d-part) – Freight Payable/Prepaid
Transport Documents
Article 33 of UCP 500 contained information as to how the status of
freight costs were to be shown on transport documents and took the
view that credits may not be precise in this respect.
When issuing a credit, a bank would invariably indicate whether a
transport document is to evidence that freight is to be prepaid or
payable at destination. Failing this, a credit would indicate the
applicable Incoterm which by its definition will imply whether freight is
to be prepaid i.e. CFR or CIF or payable at destination i.e. FOB or FCA.
46A: Documents Required
COMMERCIAL INVOICE IN 1 ORIGINAL AND 3 COPIES
PACKING LIST IN 4 COPIES
FULL SET CLEAN ON BOARD OCEAN BILLS OF LADING ISSUED TO
ORDER OF ORIGINAL BANK LTD, HONG KONG MARKED NOTIFY ACME
DIESEL ENGINE COMPANY, UPPER STREET, UPPER BAY, HONG KONG
AND FREIGHT PREPAID
CERTIFICATE OF UK ORIGIN
45A: Description of Goods and/or Services
4 MARK 3 DIESEL ENGINES FOR AGRICULTURAL USE TOGETHER WITH
SPARE PARTS FOR 12 MONTHS AS PER PROFORMA INVOICE 123456
DATED JUNE 1, 2007, CIF HONG KONG
9

Freight Payable/Prepaid – UCP 500 Sub-articles 33 (a),
(b-part), (c) and (d-part) – Freight Payable/Prepaid
Transport Documents (cont’d)
The content of sub-article 33 (c) was seen as stating
the obvious in that “prepayable” or “to be prepaid”
clearly do not indicate that freight has been paid and
a rule is not necessary to reflect this position.
Sub-article 33 (d) is now re-phrased and appears at
sub-article 26 (c) of UCP 600 as “A transport
document may bear a reference, by stamp or
otherwise, to charges additional to the freight”. The
position concerning transport documents evidencing
costs additional to freight is covered further in the
transport section of the ISBP.

10

Other Documents – UCP 500 Article
38 – Other Documents
Article 38 of UCP 500 has no equivalent in UCP 600.
UCP 500 article 38 – Other Documents
If a Credit calls for an attestation or certification of
weight in the case of transport other than by sea, banks
will accept a weight stamp or declaration of weight which
appears to have been superimposed on the transport
document by the carrier or his agent unless the Credit
specifically stipulates that the attestation or certification
of weight must be by means of a separate document.
The basis for the issuance of any credit is that it will
specify the type of document that is required for
presentation and its content.
If a condition such as an attestation of certification of
weight is required, then the credit should specify the
form and document in which such information is to
appear.
11

Expiry Date – UCP 500 Sub-article 42 (c) – Expiry Date
and Place for Presentation of Documents
UCP 500 sub-article 42 (c)
If an Issuing Bank states that the Credit is to be available
“for one month”, “for six months” or the like, but does not
specify the date from which the time is to run, the date of
issuance of the Credit by the Issuing Bank will be deemed
to be the first day from which such time is to run. Banks
should discourage indication of the expiry date of the Credit
in this manner.
The requirement of sub-article 6 (d) (i) of UCP 600 is that a
credit must state an expiry date for presentation.
Having stated a rule that a credit must have an expiry date
it is not deemed necessary to provide options for
determining an expiry date where the information is vague
or unclear as from when a period would commence.
Such an occurrence would be deemed to be an unworkable
credit and the issuing bank should be requested to provide
a definitive date of expiry.
12

Dates for Shipment – UCP 500 Sub-article 46 (a) –
General Expressions as to Dates for Shipment
Unless otherwise stipulated in the Credit, the
expression “shipment” used in stipulating an earliest
and/or a latest date for shipment will be understood
to include expressions such as, “loading on board”,
“dispatch”, “accepted for carriage”, “date of post
receipt”, “date of pick-up”, and the like, and in the
case of a Credit calling for a multimodal transport
document the expression “taking in charge”.
Sub-article 46 (a) of UCP 500 has been omitted from
UCP 600 as the transport document articles (articles
19-25) include the expressions such as shipped on
board, taking in charge, dispatch, that are relevant to
each of those transport documents linking them to a
definition of the date of shipment.
13

UCP 600 Articles not found in UCP 500

Article
Article
Article
Article
Article
Article

2
3
9
12
15
17

Definitions
Interpretations
Advising of Credits and Amendments
Nomination
Complying Presentation
Original Documents and Copies

14

UCP 600 – Overview of Article 1
UCP 600 Article 1
Application of UCP
Publication Number & Date of Revision
Modify or Exclude – The concept in
UCP 600 is that a rule is a rule, thus
UCP 600 allows for any rule to be
modified or excluded by the terms &
conditions of a credit
Applicable when the LC expressly
indicates that it is subject to these
“rules”
By establishing the articles as rules
negates the need for an article to
either commence or include the words
“unless otherwise stipulated in the
credit” or similar, thus no reference to
“unless otherwise stipulated in the
credit” throughout
Retention of Standby Letters of Credit
due to high usage of UCP for Standbys

UCP 500 Article 1
The Uniform Customs and Practice for
Documentary Credits, 1993 Revision,
ICC Publication No 500 shall apply to
all Documentary Credits (including to
the extent to which they may be
applicable, Standby Letter(s) of Credit)
where they are incorporated into the
text of the Credit. They are binding
on all parties thereto, unless otherwise
expressly stipulated in the Credit.

15

UCP 600 Article 2
Definitions
Advising Bank
Applicant*
Banking Day*
Beneficiary
Complying
Presentation*
Confirmation
Confirming Bank

Credit
Honour*
Issuing Bank
Negotiation*
Nominated Bank
Presentation
Presenter

16

Applicant: the party on whose request the credit is issued. The reference
to party does not impose any greater role for the applicant under UCP 600.
It is merely to signify that it may encompass one of any number of different
entities i.e. a bank, a customer, a customer of another bank (outsourced
processing) etc.
Banking Day: a day on which a bank is regularly open at the place at
which an act subject to these rules is to be performed. A bank may be
regularly open Mondays to Saturdays but its trade department is only open
Mondays to Fridays. In this example, the bank is regularly open Mondays
to Saturdays but only regularly open for trade transactions Mondays to
Fridays. In this context, a banking day would be any day between Monday
to Friday.
Complying Presentation: 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. The reference in this definition
to international standard banking practice does not relate solely to the ICC
publication of the same name. International standard banking practice as
seen in this definition is wider than the publication. There are a number of
practices that are carried out by banks globally that are not encompassed
within the ISBP publication.
17

Honour:
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.
18

Negotiation:
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.
The definition emphasizes that negotiation relates to the purchase of a
draft drawn on a bank other than the nominated bank. If it was drawn
on the nominated bank, it would be a payment or acceptance credit.
Further, negotiation is either the advancing or agreeing to advance
funds to a beneficiary. Use of agreeing to advance allows the bank
and beneficiary to determine the terms under which negotiation will
occur. These terms would include when, for how much and whether or
not the advance is with or without recourse.

19

UCP 600 Article 3
Interpretations

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.
Branches of a bank in different countries are considered to be separate banks.
Unless required to be used in a document, words such as “prompt”,
“immediately” or “as soon as possible” will be disregarded – article 46 of UCP 500
made reference to these terms but only in relation to general expressions as to
the dates for shipment. ISBP widened the application to any usage of these
terms. UCP 600 adopts the same stance as ISBP but creates a caveat where the
credit may require the word or words to appear within a document i.e. within a
certification made by a beneficiary.
The words “from” and “after” when used to determine a maturity date
exclude the date mentioned – UCP 500 covered the issue of “from” and “after”
but only in relation to the date terminology for periods of shipment. There are
two separate interpretations in relation to the word “from” in article 3 of UCP
600. For maturity date calculation, it excludes the date mentioned but for
determination of periods of shipment, it includes the date mentioned.

20

Interpretations (from UCP 500 Article 20):
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.
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.
21

Interpretations (from UCP 500 Articles 46 & 47):
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 dates mentioned.
The terms “first half” and “second half” of a month shall be
construed respectively as the 1st to 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.
22

UCP 600 Article 4
Credits v. Contracts
Addition:

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 500 Article 3
a.
Credits, by their nature are separate
transactions from the sales or other
contract(s) on which they may be
based and banks are in no way
concerned with or bound by such
contract(s), even if any reference
whatsoever to such contract(s) is
included in the Credit. Consequently,
the undertaking of a bank to pay,
accept and pay Draft(s) or negotiate
and/or to fulfil any other obligation
under the Credit, is not subject to
claims or defences by the Applicant
resulting from his relationships with
the Issuing Bank of the Beneficiary.
b.

A Beneficiary can in no case avail
himself of the contractual relationships
existing between the banks or
between the Applicant and the Issuing
Bank.

23

UCP 600 Article 5
Documents v. Goods,
Services or Performance
Banks deal with documents,
other parties deal with
documents and/or goods.
There is a just a structural
change to this article, to
emphasize that banks deal
with documents and not with
goods, services or
performance. As the UCP is
generally related to actions of
banks, the wording in this
article creates the rule under
which banks operate.

UCP 500 Article 4
In Credit operations all
parties concerned deal with
documents, and not with
goods, services and/or
performances to which the
documents may relate.

24

UCP 600 Article 6
Availability, Expiry Date and Place for
Presentation

Same principle in
Article 6(b)
Always available with
issuing bank
Freely available credits
as opposed to freely
negotiable
Stronger wording
“must not” and no
reference to additional
document

UCP 500 sub-Articles 10(a) and (b)(i)
All Credits must clearly indicate
whether they are available by sight
payment, by deferred payment, by
acceptance or by negotiation
Unless the Credit stipulates that it is
available only with the Issuing Bank,
all Credits must nominate the bank
(the “Nominated Bank”) which is
authorised to pay, to incur a deferred
payment undertaking, to accept
Draft(s) or to negotiate. In a freely
negotiable Credit any bank is a
Nominated Bank.
UCP 500 sub-Articles 9(a)(iv) and 9(b)(iv)
A Credit should not be issued available
by Draft(s) on the Applicant. If the
Credit nevertheless calls for Draft(s)
on the Applicant, banks will consider
such Draft(s) as an additional
document(s).

25

UCP 600 Article 6
Availability, Expiry Date and Place
for Presentation

Covered in Article
6(d)(i) and (ii)
A place other than the
issuing bank includes
the place of the issuing
bank
Covered in Article 6(e)

UCP 500 sub-Articles 42(a) and (b)
a. All Credits must stipulate an
expiry date and a place for
presentation of documents for
payment, acceptance, or with the
exception of freely negotiable
Credits, a place for presentation
of documents for negotiation. An
expiry date stipulate for
payment, acceptance or
negotiation will be construed to
express an expiry date for
presentation of documents.
b.

Except as provided in sub-Article
44(a), documents must be
presented on or before such
expiry date.

26

Introduction
The primary function of a letter of credit
is to provide payment security for an
international trade transaction coupled
with the opportunity for banks to
provide financing thereunder.
UCP 600 has specific rules as to how
credits can be made available with
banks to facilitate payment and permit
financing.
28

Available With
Under UCP 600 a credit may be issued stating that it
is available with the issuing bank or with a nominated
bank.
Article 2 of UCP 600 defines nominated bank.
UCP 600 article 2 – definition
Nominated bank means the bank with which the credit
is available or any bank in the case of a credit
available with any bank.
Where a credit is available with a nominated bank, the
presentation of documents by or on behalf of the
beneficiary will typically be made to that nominated
bank, however, documents may be presented directly
to an issuing bank.
29

Available By
A credit may be made available with a nominated bank:
By sight payment (Draft is optional)
By deferred payment (Draft not required)
By acceptance (Draft required)
By negotiation (Draft is optional)
A credit may be made available with an issuing bank:
By sight payment (Draft is optional)
By deferred payment (Draft not required)
By acceptance (Draft required)
A credit cannot be available with an issuing bank by negotiation
Where a credit is available by sight payment or negotiation, the use of
a draft is optional and it is for the issuing bank and applicant to decide
at the time of issuance of the credit whether or not a draft is needed.
Credit available by sight payment (Draft is optional)
Credit available by negotiation (Draft is optional)
A credit must not be made available by sight payment, acceptance or
negotiation with a draft drawn on the applicant.

30

Nominated Bank
In nominating a bank to pay, incur a deferred
payment undertaking, accept a draft or
negotiate, an issuing bank authorizes that
nominated bank to honour or negotiate upon
receipt of a complying presentation.
A nominated bank is under no obligation to
honour or negotiate unless it has added its
confirmation to the credit or it has expressly
communicated to the beneficiary its agreement
to honour or negotiate.
Where a nominated bank honours or negotiates
under a complying presentation, an issuing bank
undertakes to reimburse them.
31

Honour
Article 2 of UCP 600 defines how credits can be
settled by honour or negotiation.
Honour means:
To pay at sight if the credit is available by sight
payment.

To incur a deferred payment undertaking and
pay at maturity if the credit is available by
deferred payment.
To accept a bill of exchange (“draft”) drawn by
the beneficiary and pay at maturity if the credit
is available by acceptance.
32

Negotiation
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.
If a nominated bank with which a credit is available by
negotiation examines documents, determines
compliance but does not advance funds or agree to
advance funds to the beneficiary, then that nominated
bank has not negotiated as defined by UCP 600.
33

Expiry Date and Place
Linked to where a credit is available is the
need for the credit to indicate an expiry date
and a place for presentation.
An expiry date stated for honour or
negotiation will be deemed to be an expiry
date for presentation.
Where a credit states that it is available with
a nominated bank and that the expiry date is
at the place of the nominated bank, the
expiry date would also apply to a
presentation made directly to the issuing
bank.
34

Confirmation
Confirmation means a definite undertaking
of the confirming bank, in addition to that
of the issuing bank, to honour or negotiate
a complying presentation.
A confirming bank is irrevocably bound to
honour or negotiate as of the time it adds
its confirmation to the credit.
In most cases a confirming bank will be a
nominated bank but this is not always the
case.
35

Prepay or Purchase
When a nominated bank, acting on its nomination, a confirming bank,
if any or an issuing bank receives a complying presentation under a
credit available by deferred payment, it incurs a deferred payment
undertaking and pays at maturity.
When a nominated bank, acting on its nomination, a confirming bank,
if any or an issuing bank receives a complying presentation under a
credit available by acceptance, it accepts the bill of exchange and pays
at maturity.
Sometimes the beneficiary may wish to receive funds in advance of the
maturity or due date and request the nominated or issuing bank to
prepay or purchase an accepted draft or a deferred payment
undertaking.
UCP 600 sub-article 12 (b) is a new rule that states where a credit is
issued available by acceptance or deferred payment such issuance
provides an implicit authority from an issuing bank to a nominated
bank to prepay or purchase a draft accepted or a deferred payment
undertaking incurred by the nominated bank.
“Article 7 – Issuing Bank Undertaking” and “Article 8 – Confirming
Bank Undertaking” clarify that reimbursement for the amount of a
complying presentation is due at maturity whether or not the
nominated bank prepaid or purchased.
36

UCP 600 Article 7
Issuing Bank Undertaking

Definition of credit
An issuing bank
‘honours’ – it does not
negotiate
Refined wording to
reflect the position if a
nominated bank does
not act (as shown in
next slide)

UCP 500 sub-Article 9(a)
a.

An irrevocable Credit constitutes a definite
undertaking of the Issuing Bank, provided
that the stipulated documents are presented
to the Nominated Bank or to the Issuing Bank
and that the terms and conditions of the
Credit are complied with:
i.
if the Credit provides for sight payment
– to pay at sight;
ii.
if the Credit provides for deferred
payment – to pay on the maturity
date(s) – determinable in accordance
with the stipulations of the Credit;
iii.
if the Credit provides for acceptance:
a.
by the Issuing Bank – to accept
Draft(s) drawn by the Beneficiary
on the Issuing Bank and pay them
at maturity
or
b.
by another drawee bank – to
accept and pay at maturity
on the Issuing Bank in the event
the drawee bank stipulated in the
Credit does not accept Draft(s)
drawn on it, or to pay Draft(s)
accepted but not paid by such
drawee bank at maturity.

37

UCP 600 Article 7(a)
ii.
iii.

iv.
v.

sight payment with a nominated bank and that nominated
bank does not pay;
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;
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;
negotiation with a nominated bank and that nominated
bank does not negotiate.

NOTE: same principle for Article 8 Confirming Bank Undertaking
38

UCP 600 Article 7

Covered in Article 6(c)
Issuing bank irrevocable
bound to honour as of
time of issuance
Reimbursement condition
appears in Article 7(c)
Reimbursement due
whether or not Draft or
DP Undertaking prepaid
or purchased – see
Article 12

iv.
if the Credit provides for negotiation – to
pay without recourse to drawers and/or
bonafide holders, Draft(s) drawn by the
Beneficiary and/or document(s) presented
under the Credit. A Credit should not be
issued available by Draft(s) on the
Applicant. If the Credit nevertheless calls
for Draft(s) on the Applicant, banks will
consider such Draft(s) as an additional
document(s).
UCP 500 sub-Article 10(d)
By nominating another bank, or by
allowing for negotiation by any bank, or
by authorising or requesting another bank
to add its confirmation, the Issuing Bank
authorises such bank to pay, accept
Draft(s) or negotiate as the case may be,
against documents which appear on their
face to be in compliance with the terms
and conditions of the Credit and
undertakes to reimburse such bank in
accordance with the provisions of these
Articles.

39

UCP 600 Article 8
Confirming Bank Undertaking

Definition of confirmation
and confirming bank
Confirming bank –
honours or negotiates
Confirming bank is
irrevocably bound to
honour or negotiate as of
time it adds confirmation
Reimbursement due
whether or not Draft or
DP Undertaking
purchased or prepaid

UCP 500 sub-Article 9(b)
b.
A confirmation of an irrevocable Credit
by another bank (the “Confirming
Bank”) upon the authorisation or
request of the Issuing Bank,
constitutes a definite undertaking of
the Confirming Bank, in addition to
that of the Issuing Bank, provided that
the stipulated documents are
presented to the Confirming Bank or
to any other Nominated Bank and that
the terms and conditions of the Credit
are complied with:
i.
ii.

iii.

if the Credit provides for sight payment
– to pay at sight;
if the Credit provides for deferred
payment – to pay on the maturity
date(s) determinable in accordance
with the stipulations of the Credit;
if the Credit provides for acceptance:
a.
by the Confirming Bank – to
accept Draft(s) drawn by the
Beneficiary on the Confirming
Bank and pay them at maturity,
or

40

UCP 600 Article 8
Confirming Bank Undertaking

Covered in Article 6 (c)
Reflects position if a
nominated bank does not
act (see slide where
NOTE mentioned “same
principle for Article 8
Confirming Bank
Undertaking”)
Nominated bank may or
may not be a confirming
bank
Refined wording in
Article 8 (d)

UCP 500 sub-Article 9(b) and (c)(i) and (ii)
b.

by another drawee bank – to accept and pay
at maturity, Draft(s) drawn by the Beneficiary
on the Confirming Bank, in the event the
drawee bank stipulated in the Credit does not
accept Draft(s) drawn on it, or to pay Draft(s)
accepted but not paid by such drawee bank at
maturity;
iv.
if the Credit provides for negotiation –
to negotiate without recourse to
drawers and/or bonafide holders,
and/or document(s) presented under
the Credit. A Credit should not be
issued available by Draft(s) on the
Applicant. If the Credit nevertheless
calls for Draft(s) on the Applicant,
banks will consider such Draft(s) as an
additional document(s).
c. i. If another bank is authorised or
requested by the Issuing Bank to add
its confirmation to a Credit but is not
prepared to do so, it must so inform
the Issuing Bank without delay.
ii. Unless the Issuing Bank specifies
otherwise in its authorisation or request
to add confirmation, the Advising Bank
may advise the Credit to the
Beneficiary without adding its
confirmation.

41

UCP 600 Article 9
Advising of Credits and Amendments

Concept of 2nd advising
bank
Bank now “satisfies
itself” as to the apparent
authenticity
Advice of credit or
amendment “accurately
reflects” the terms and
conditions of the credit
or amendment
Now appears in Article
9(d)

UCP 500 Article 7
a.

b.

A Credit may be advised to a Beneficiary
through another bank (the “Advising Bank”)
without engagement on the part of the
Advising Bank, but that bank, if it elects to
advise the Credit, shall take reasonable care
to check the apparent authenticity of the
Credit which it advises. If the bank elects not
to advise the Credit, it must so inform the
Issuing Bank without delay.
If the Advising Bank cannot establish such
apparent authenticity it must inform, without
delay, the bank from which the instructions
appear to have been received that it has been
unable to establish the authenticity of the
Credit and if it elects nonetheless to advise
the Credit it must inform the Beneficiary that
it has not been able to establish the
authenticity of the Credit.

If a bank uses the services of an Advising
Bank to have the Credit advised to the
Beneficiary, it must also use the services of
the same bank for advising an
amendment(s).

42

UCP 600 Article 10
Amendments

i.

Except as otherwise provided by
Article 48, an irrevocable Credit
can neither be amended nor
cancelled without the agreement of
the Issuing Bank, the Confirming
Bank, if any, and the Beneficiary.

ii.

The Issuing Bank shall be
irrevocably bound by an
amendment(s) issued by it from
the time of the issuance of such
amendment(s). A Confirming Bank
may extend its confirmation to an
amendment and shall be
irrevocably bound as of the time of
its advice of the amendment. A
Confirming Bank may, however,
choose to advise an amendment to
the Beneficiary without extending
its confirmation and if so, must
inform the Issuing Bank and the
Beneficiary without delay.

Covered in Article 10(a)

Covered in Article 10(b)

43

UCP 600 Article 10
Amendments

Covered in Article
10(c)
Advice of acceptance
or rejection to be
advised
Partial acceptance of
an amendment =
rejection
Time limits for
acceptance or
rejection will be
disregarded

iii.
The terms of the original Credit (or a
Credit incorporating previously
accepted amendment(s) will remain in
force for the Beneficiary until the
Beneficiary communicates his
acceptance of the amendment to the
bank that advised such amendment.
The Beneficiary should give notification
of acceptance or rejection of
amendment(s). If the beneficiary fails
to give such notification, the tender of
documents to the Nominated Bank or
Issuing Bank, that conform to the
Credit and to not yet accepted
amendment(s), will be deemed to be
notification of acceptance by the
Beneficiary of such amendment(s) and
as of that moment the Credit will be
amended.
iv.

Partial acceptance of amendments
contained in one and the same advice
of amendment is not allowed and
consequently will not be given any
effect.
44

UCP 600 Article 11

Teletransmitted and PreAdvised Credits and
Amendment
Revised text to remove
the “should a mail
confirmation
nevertheless be sent”
Where a mail
confirmation is the
operative instrument, it
must be issued in terms
not inconsistent with the
teletransmission

UCP 500 Article 11
a.

i. When an Issuing Bank instructs an
Advising Bank by an authenticated
teletransmission to advise a Credit or an
amendment to a Credit, the
teletransmission will be deemed to be the
operative Credit instrument or the
operative amendment, and no mail
confirmation should be sent. Should a
mail confirmation nevertheless be sent, it
will have not effect and the Advising Bank
will have no obligation to check such mail
confirmation against the operative Credit
instrument or the operative amendment
received by teletransmission.
ii. If the teletransmission states “full
details to follow” (or words of similar
effect) or states that the mail
confirmation is to be the operative Credit
instrument or the operative amendment,
then the teletransmission will not be
deemed to be the operative Credit
instrument or the operative amendment.
The Issuing Bank must forward the
operative amendment to such Advising
Bank without delay.

45

UCP 600 Article 11
Teletransmitted and PreAdvised Credits and
Amendment

Covered in Article 9(d)
Revised and shortened
text appears in Article
11(b)

UCP 500 Article 11
b.

c.

If a bank uses the services of an
Advising Bank to have the Credit
advised to the Beneficiary, it must
also use the services of the same
bank for advising an
amendment(s).
A preliminary advice of the issuance
or amendment of an irrevocable
Credit (pre-advice), shall only be
given by an Issuing Bank if such
bank is prepared to issue the
operative amendment thereto.
Unless otherwise stated in such
preliminary advice by the Issuing
Bank, an Issuing Bank having given
such pre-advice shall be irrevocably
committed to issue or amend the
Credit, in terms not inconsistent
with the pre-advice, without delay.

46

UCP 600 Article 12
Nomination

but widened to include
honour
Covered in Article 12(a)
referencing honour or
negotiation
For new Article 12(b) –
see next slide

UCP 500 sub-Article 10(b)(ii)
Negotiation means the giving of value
for Draft(s) and/or document(s) by the
bank authorised to negotiate. Mere
examination of the documents without
giving of value does not constitute a
negotiation.

UCP 500 sub-Article 10(c)
Unless the Nominated Bank is the
Confirming Bank, nomination by the
Issuing Bank does not constitute any
undertaking by the Nominated Bank to
pay, incur a deferred payment
undertaking, to accept Draft(s), or to
negotiate. Except where expressly
agreed to by the Nominated Bank and
so communicated to the Beneficiary,
the Nominated Bank’s receipt of
and/or examination and/or forwarding
of the documents does not make that
bank liable to pay, to incur a deferred
payment undertaking, to accept
Draft(s), or to negotiate.

47

UCP 600 Article 12
Nomination
Article 12(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.
48

UCP 600 Article 13
Bank-to-Bank Reimbursement
Arrangement

Principle in Article 13(a)
is that the credit and
reimbursement
authorisation must
reference URR or Article
13(b) will apply
Reimbursement
authorisation subject to
Article 13(b) must not
include an expiry date –
to bring in line with URR

UCP 500 Article 19
a.

b.

c.

d.

If an Issuing Bank intends that the
reimbursement to which a paying,
accepting or negotiating bank is entitled,
shall be obtained by such bank (the
“Claiming Bank”, claiming on another
party (the “Reimbursing Bank”), it shall
provide such Reimbursing Bank in good
time with the proper instructions or
authorisation to honour such
reimbursement claims.
Issuing banks shall not require a Claiming
Bank to supply a certificate of compliance
with the terms and conditions of the
Credit to the Reimbursing Bank.
An Issuing Bank shall not be relieved from
any of its obligations to provide
reimbursement if and when
reimbursement is not received by the
Claiming Bank from the Reimbursing
Bank.
The Issuing Bank shall be responsible to
the Claiming Bank for any loss of interest
if reimbursement is not provided by the
Reimbursing Bank on first demand, or as
otherwise specified in the Credit, or
mutually agreed, as the case may be.

49

UCP 600 Article 13
Bank-to-Bank Reimbursement
Arrangement

Article 13(b)(iv) states
that reimbursing bank
charges are for account
of the issuing bank. If
they are for account of
beneficiary it must be
clearly indicated in the
credit and the
reimbursement
authorisation

UCP 500 Article 19
e.

The Reimbursing Bank’s charges
should be for the account of the
Issuing Bank. However, in cases
where the charges are for the
account of another party, it is the
responsibility of the Issuing Bank
to so indicate in the original
Credit and in the reimbursement
authorisation. In cases where
the Reimbursing Bank’s charges
are for the account of another
party they shall be collected from
the Claiming Bank when the
Credit is drawn under. In cases
where the Credit is not drawn
under, the Reimbursing Bank’s
charges remain the obligation of
the Issuing Bank.

50

UCP 600 Article 14
Standard for Examination of
Documents

Applicable banks defined
“On their face” – sole
reference here
Definition: complying
presentation
Check on the basis of
documents alone
Covered in Article 14(d)
– see next slide
Covered in Article 14(g)

UCP 500 Article 13
Banks must examine all documents
stipulated in the Credit with
reasonable care, to ascertain whether
or not they appear, on their face, to be
in compliance with the terms and
conditions of the Credit. Compliance
of the stipulated documents on their
face with the terms and conditions of
the Credit, shall be determined by
international standard banking practice
as reflected in these Articles.
Documents which appear on their face
to be inconsistent with one another
will be considered as not appearing on
their face to be in compliance with the
terms and conditions of the Credit.
Documents not stipulated in the Credit
will not be examined by banks. If they
receive such documents, they shall
return them to the presenter or pass
them on without responsibility.

51

UCP 600 Article 14
Standard for Examination of Documents

Article 14(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.
52

UCP 600 Article 14
Documents

Removal of “reasonable
time”
Maximum of 5 banking
days
Period of 5 banking days
not subject to any
upcoming event
Covered in Article 14(h)

UCP 500 Article 13
b.

The Issuing Bank, the Confirming
Bank, if any, or a Nominated
Bank acting on their behalf, shall
each have a reasonable time, not
to exceed seven banking days
following the day of receipt of the
documents, to examine the
documents and determine
whether to take up or refuse the
documents and to inform the
party from which it received the
documents accordingly.

c.

If a Credit contains conditions
without stating the document(s)
to be presented in compliance
therewith, banks will deem such
conditions as not stated and will
disregard them.

53

UCP 600 Article 14
Documents

Covered in Article 14(f)
Document must appear
to fulfil its function
Principle extended to a
document may be dated
no later than the date of
its presentation

UCP 500 Article 21
When documents other than
transport documents, insurance
documents and commercial invoices
are called for, the Credit should
stipulate by whom such documents
are to be issued and their wording
or data content. If the Credit does
not so stipulate, banks will accept
such documents as presented,
provided that their data content is
not inconsistent with any other
stipulated document presented.

UCP 500 Article 22
Unless otherwise stipulated in the
Credit, banks will accept a
document bearing a date of
issuance prior to that of the Credit,
subject to such document being
presented within the time limits set
out in the Credit and in these
Articles.
54

UCP 600 Article 14
Documents

Article was not deemed
to be necessary as UCP
does not define who has
to “issue” the transport
document. Covered in
Article 14(l)
Covered in Article 14(k)
and widened to any
document

UCP 500 Article 30
Unless otherwise authorised in the Credit,
banks will only accept a transport
document issued by a freight forwarder if
it appears on its face to indicate:
i. the name of the freight forwarder as a
carrier or multimodal transport operator
and to have been signed or otherwise
authenticated by the freight forwarder as
carrier or multimodal transport operator,
or
ii. The name of the carrier or multimodal
transport operator and to have been
signed or otherwise authenticated by the
freight forwarder as a named agent for or
on behalf of the carrier or multimodal
transport operator.

UCP 500 sub-Article 31(iii)
Indicates as the consignor of the goods a
party other than the Beneficiary of the
Credit.

55

UCP 600 Article 14
Standard for Examination of Documents
Article 14(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.

56

UCP 600 Article 14
Documents

Second sentence
removed from
Commercial Invoice
Article and appears at
Article 14(e)
Default of 21 days
applies where there is an
original transport
document to be
presented

The description of the goods in the
commercial invoice must correspond
with the description in the Credit. In
all other documents, the goods may be
described in general terms not
inconsistent with the description of the
goods in the Credit.
In addition to stipulating an expiry
date for presentation of documents,
every Credit which calls for a transport
document(s) should also stipulate a
specified period of time after the date
of shipment during which presentation
must be made in compliance with the
terms and conditions of the Credit. If
no such period of time is stipulated,
banks will not accept documents
presented to them later than 21 days
after date of shipment. In any event,
documents must be presented not
later than the expiry date of the
Credit.

57

Standard for
Examination of
Documents

58

Introduction
UCP 600 sub-article 14 (a) provides the standard for examination of
documents.
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.
A complying presentation is defined in article 2 of UCP 600.
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.
It should be noted that reference in this definition to “international
standard banking practice” is not confined to the practices detailed in
the ICC Publication of the same name.
By inclusion in sub-article 14 (a) of the reference to “appear on their
face”, it is now deemed that there is no need for similar reference in
the articles covering transport, insurance or commercial invoice as was
the case in UCP 500.
59

Documents Alone
The document checker must decide on the basis
of the documents alone whether or not the
documents constitute a complying presentation.
For example:
The actual quality of goods received by the
applicant – even if not of merchantable quality –
is not a consideration for the document checker,
who must determine compliance based on the
documents alone as stated in sub-article 14 (a)
of UCP 600.
This point is emphasized by article 5 of UCP 600
which makes it clear that banks deal with
documents and not with goods, services or
performance to which the documents may relate.
60

5 Banking Days
An issuing bank, a confirming bank or a nominated bank acting on
its nomination, each have a maximum number of days in which to
examine the documents and determine if the presentation
complies. This maximum number of days is 5 banking days
following the day of presentation. As defined in article 2 of UCP
600:
Presentation means either the delivery of documents under a
credit to the issuing bank or nominated bank or the documents so
delivered.
It should be noted that in addition to the maximum number of
days being reduced from 7 to 5 banking days following the day of
presentation, the concept of “reasonable time” has been removed.
Despite this removal of reference to reasonable time it is still
expected that banks will not in all cases utilize the maximum
number of days allowed by the rules.
This position is emphasized by the content of article 15 of UCP 600
which states that when a bank determines that a presentation is
complying it must honour or negotiate.
61

Documents Required
The document checker must examine all
documents required by the terms and
conditions of the credit.
If the presentation contains a document that is
not required by the credit, UCP 600 sub a
rticle
14 (g) states that document will be
disregarded and may be returned to the
presenter.
Furthermore, UCP 600 sub aticle 14 (h) states
- r
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.
62

Date of Issuance
UCP 600 sub-article 14 (i) makes it clear that
documents may be dated prior to the issuance date of
the credit, but must not be dated later than its date of
presentation.
Example:
Date of Issue: 070702
Date of Presentation: July 25 2007
Date of Invoice: July 1 2007
Date of Packing List: July 27 2007
In this presentation the invoice is dated prior to the
issuance date but the packing list is dated after the
date of presentation. The invoice complies with subarticle 14 (i). The packing list does not. In simple
terms, a document may be dated any date upto and
including the date of its presentation.
63

Addresses
Under UCP 500 there was some confusion as to whether the
addresses of the beneficiary and the applicant as shown on
the documents presented were to be identical to those
stated in the credit.
UCP 600 now states specifically that the addresses of the
beneficiary and the applicant in any document 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 shown in the credit.
There is however one exception and this relates to the
situation where the address of the applicant is to appear as
part of the consignee or notify party details on a transport
document subject to articles 19 to 25.
Sub-article 14 (j) states that when the address and the
contact details of the applicant appear as part of the
consignee or notify party details in a transport document
they must be as stated in the credit.
64

Contact Details
In the past, document checkers have
examined documents to determine that
contact information such as telefax,
telephone and email addresses are in
compliance with those stated in the credit.
UCP 600 sub-article 14 (j) removes the
need to review contact information by
expressly stating that contact details shown
as part of the beneficiary or applicant
addresses in the credit will be disregarded.
65

Other Documents
UCP 600 has specific articles that guide the document
checker in determining compliance for:
Transport documents – articles 19 to 25
Insurance documents – article 28
Commercial invoice – article 18
However, if a credit requires presentation of a document
other than these, 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 UCP 600.
Examples of how a document would fulfil its function
include:
A certificate of origin showing the origin of the goods
An inspection certificate indicating that the goods have
been inspected
66

Data in a Document
UCP 600 makes it clear that when checking
documents the data does not have to be
identical.
The essential requirement under UCP 600
sub a
rticle 14 (d) is that 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.
67

Consignor
UCP 600 sub-article 14 (k) states that
the shipper or consignor of the goods
indicated on any document need not
be the beneficiary of the credit.
In UCP 500 this provision applied only
to transport documents, UCP 600
widens the scope beyond transport
documents to any document that may
contain a shipper or consignor field.
68

Transport Document Issuer
The transport articles of UCP 600 do not impose a
condition as to who is to issue a transport document.
These articles detail how the carrier, owner, master or
charterer is to be shown on the transport document and
how the documents are to be signed including the
capacity of the signer.
UCP 600 sub-article 14 (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.
Sub-article 14 (l) emphasizes that a transport document
may be issued by a party other than the carrier, owner,
master or charterer – i.e. freight forwarder, etc.,
provided that the transport document meets the
requirements of articles 19 to 24 of UCP 600.
69

21 Calendar Days
In addition to the document checker establishing that the
presentation has been made within the expiry date of the
credit, there is a need to ensure that the documents have
been presented within the specified period of presentation
after the date of shipment.
A credit should specify the number of days after shipment
within which presentation is to be made. In the absence of
such indication in the credit, UCP 600 sub-article 14 (d)
provides a default position of 21 calendar days after the
date of shipment as evidenced on the transport document.
It should be noted that the default position of 21 days after
the date of shipment applies where the credit calls for the
presentation of one or more original transport documents
subject to articles 19 to 25 of UCP 600.
For credits calling for copies of such transport documents or
transport documents not covered by the UCP, the credit
must make specific reference to the number of days within
which presentation is to be made.
70

UCP 600 Article 15
Complying Presentation
Outlines the principle that honour or negotiation
follows the determination of a complying presentation
i.e.,
Article 15(b):
When a confirming bank determines that a
presentation is complying, it must honour or negotiate
and forward the documents to the issuing bank.

71

UCP 600 Article 16
Discrepant Documents, Waiver
and Notice

Removal of “on their
face”
“....may refuse to honour
or negotiate”

UCP 500 Article 14
a.

b.

When the Issuing Bank authorises
another bank to pay, incur a deferred
payment undertaking, accept Draft(s), or
negotiate against documents which
appear on their face to be in compliance
Credit, the Issuing Bank and the
Confirming Bank, if any, are bound:
i. to reimburse the Nominated Bank which
has paid, incurred a deferred payment
undertaking, accepted Draft(s), or
negotiated
ii. To take up documents.
Upon receipt of the documents the
Issuing Bank and/or Confirming Bank, if
any, or a Nominated Bank acting on their
behalf, must determine on the basis of
the documents alone whether or not they
appear on their face to be in compliance
Credit. If the documents appear on their
face not to be in compliance with the
terms and conditions of the Credit, such
banks may refuse to take up the
documents.

72

UCP 600 Article 16
and Notice

Maximum of 5 banking
days following day of
presentation
Notice must state (1)
bank refuses, (2) each
discrepancy and (3)
status of the handling of
documents – see next
slide

UCP 500 Article 14
c.

d.

If the Issuing Bank determines that the
documents appear on their face not to be
in compliance with the terms and
conditions of the Credit, it may in its sole
judgment approach the Applicant for a
waiver of the discrepancy(ies). This does
not, however, extend the period
mentioned in sub-Article 13(b).
i. If the Issuing Bank and/or Confirming
Bank, if any, or a Nominated Bank acting
on their behalf, decides to refuse the
documents, it must give notice to that
effect by telecommunication or, if that is
not possible, by other expeditious means,
without delay but no later than the close
of the seventh banking day following the
day of receipt of the documents. Such
notice shall be given to the bank from
which it received the documents, or to the
Beneficiary, if it received the documents
directly from him.
ii. Such notice must state all discrepancies
in respect of which the bank refuses the
documents and must also state whether it
is holding the documents at the disposal
of, or is returning them to, the presenter.

73

UCP 600 Article 16
Discrepant Documents, Waiver and Notice
Article 16(c)(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.

74

UCP 600 Article 16
and Notice

UCP 500 Article 14
iii. The Issuing Bank and/or
Confirming Bank, if any, shall
then be entitled to claim from the
remitting bank, refund, with
interest, of any reimbursement
which has been made to that
bank.

Covered in Article 16(g)
Covered in Article 16(f)
If a bank has provided a
notice of refusal and
chosen (a) or (b), it may
return the documents at
any time

e.

If the Issuing Bank and/or
Confirming Bank, if any, fails to
act in accordance with the
provisions of this Article and/or
fails to hold the documents at the
disposal of, or return them to the
presenter, the Issuing Bank
and/or Confirming Bank, if any,
shall be precluded from claiming
that the documents are not in
compliance with the terms and
conditions of the Credit.

75

UCP 600 Article 16
and Notice

This is not included in
UCP 600. This is
considered to be a
matter between
beneficiary and the
nominated bank. A
confirming or issuing
bank still makes a
decision on the
documents based on
Articles 14 and 16.

UCP 500 Article 14
f.
If the remitting bank draws the
attention of the Issuing Bank and/or
Confirming Bank, if any, to any
discrepancy(ies) in the document(s)
or advises such banks that it has
paid, incurred a deferred payment
undertaking, accepted Draft(s) or
negotiated under reserve or against
an indemnity in respect of such
discrepancy(ies), the Issuing Bank
and/or Confirming Bank, if any, shal
not be thereby relieved from any of
their obligations under any
provision of this Article. Such
reserve or indemnity concerns only
the relations between the remitting
bank and the party towards whom
the reserve was made, or from
whom, or on whose behalf, the
indemnity was obtained.

76

Discrepant Documents,
Waiver and Notice

77

Introduction
Article 16 of UCP 600 provides that when a
bank determines that the documents do not
comply, it may refuse to honour or negotiate.
The issuing bank having determined that a
presentation does not comply may:
Provide a notice of refusal to the presenter
It may decide, in its sole judgement, to
contact the applicant for a waiver of the
discrepancies – subject to the presenter
having not provided any instructions to the
contrary.
78

Giving Notice
When a bank decides to refuse to honour or negotiate, it
must give a single notice to that effect to the presenter.
This notice must be sent:
By telecommunication or other expeditious means
But in any event no later than the close of fifth
banking day following the day of presentation.
The issuing bank must be aware that the act of
contacting the applicant for a waiver does not extend the
period of five banking days following the day of
presentation for providing a notice of refusal to the
presenter.

79

Notice of Refusal
When a bank decides to refuse to honour or
negotiate, the creation and content of its
notice of refusal are of critical importance.
Sub-article 16 (c) provides banks with
specific direction as to the required content
of a notice of refusal.
The notice must state:
That the bank is refusing to honour or
negotiate
Each discrepancy in respect of which the
bank refuses to honour or negotiate
80

Notice of Refusal (cont’d)
Additionally, it must state what action it is taking in
relation to the status of the documents. There are 4
options provided in sub-article 16 (c) in relation to the
status of the documents:
That the bank is holding the documents pending
further instructions from the presenter
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
That the bank is returning the documents
That the bank is acting in accordance with
instructions previously received from the
presenter
81

Returning Documents
Sub-article 16 (e) makes it clear that once the
bank has given a notice of refusal, it may return
the documents to the presenter at any time.
UCP 600 sub-article 16 (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.
In these circumstances it is expected that a bank
will not return the documents without prior notice
but it is important to remember that the bank
has the right to merely return them.
82

Preclusion Rule
If an issuing bank or confirming bank fail to
give a notice of refusal in accordance with
article 16, it will be precluded from claiming
that the presentation does not comply and
must honour or negotiate.
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.
83

Reimbursement
When an issuing bank or confirming bank has
given its notice of refusal in accordance with
article 16, it shall be entitled to claim refund
with interest of any reimbursement
previously made.
UCP 600 sub a
rticle 16 (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.
84

Reserve or Indemnity
Article 16 of UCP 600 does not contain an equivalent
rule to that of sub-article 14 (f) of UCP 500.
If the remitting bank draws the attention of the
Issuing Bank and/or Confirming Bank, if any, to any
discrepancy(ies) in the document(s) or advises such
banks that it has paid, incurred a deferred payment
undertaking, accepted Draft(s) or negotiated under
reserve or against an indemnity in respect of such
discrepancy(ies), the Issuing Bank and/or Confirming
Bank, if any, shall not be thereby relieved from any of
their obligations under any provision of this Article.
Such reserve or indemnity concerns only the relations
between the remitting bank and the party towards
whom the reserve was made, or from whom, or on
whose behalf, the indemnity was obtained.
85

Reserve or Indemnity (cont’d)
Whether a nominated bank has honoured or
negotiated under reserve or indemnity is of no
concern to an issuing bank or confirming bank
as it does not affect or influence the decision
process of the issuing or confirming bank.
To emphasize this point UCP 600 sub aticle 14
- r
(a) clearly states that a confirming bank or an
issuing bank must examine the presentation to
determine, on the basis of the documents
alone, whether or not the documents appear
on their face to constitute a complying
presentation.
86

UCP 600 Article 17
Original Documents and
Copies

Based on concept in
ICC Decision of
Original Documents
Article 17(a) makes
clear that at least
one of each
document must be
an original

Unless otherwise stipulated
in the Credit, banks will also
accept as an original
document(s), a
document(s) produced or
appearing to have been
produced:
i. by reprographic,
automated or computerized
systems;
ii. As carbon copies;
provided that it is marked
as original and, where
necessary, appears to be
signed.

87

UCP 600 Article 17
Original Documents and
Copies

Article 17(d) states that
copies will be satisfied by
either originals or copies
(copies would include
photocopies)
Covered in Article 17(e)
with emphasis on
presentation of “at least
one original....”

i.
Unless otherwise stipulated in
the Credit, banks will accept
as a copy(ies), a
document(s) either labelled
copy or not marked as an
original – a copy(ies) need
not be signed.
ii. Credits that require multiple
document(s) such as
“duplicate”, “two fold”, “two
copies” and the like, will be
satisfied by the presentation
of one original and the
remaining number in copies
except where the document
itself indicates otherwise.

88

UCP 600 Article 18
Commercial Invoice

Definition of
beneficiary
Definition of
applicant
New (iii) stating that
invoice must be in
the same currency
as the credit
Old (iii) becomes (iv)

UCP 500 Article 37
a. Unless otherwise
stipulated in the Credit,
commercial invoices:
i.

must appear on their
face to be issued by the
Beneficiary named in
the Credit (except as
provided in Article 48),
and
ii. must be made out in
the name of the
Applicant (except as
provided in sub-Article
48(h)), and
iii. need not be signed.

89

UCP 600 Article 18
Commercial Invoice

Emphasis is changed that
banks may accept an
invoice for a greater
value, provided it has not
honoured or negotiated
for an amount in excess
of the credit
with second sentence
now appearing in Article
14(e)

UCP 500 Article 37
b.
Unless otherwise stipulated in the
Credit, banks may refuse commercial
invoices issued for amounts in excess
of the amount permitted by the Credit.
Nevertheless, if a bank authorised to
pay, incur a deferred payment
undertaking, accept Draft(s), or
negotiate under a Credit accepts such
invoices, its decision will be binding
upon all parties, provided that such
bank has not paid, incurred a deferred
payment undertaking, accepted
Draft(s) or negotiated for an amount
in excess of that permitted by the
Credit.
c.
The description of the goods in the
commercial invoice must correspond
with the description in the Credit. In
all other documents, the goods may be
described in general terms not
inconsistent with the description of the
goods in the Credit.

90

UCP 600 Article 19
Transport Document Covering at Least
Two Different Modes of Transport

Article 1 – exclude or
modify
Indicate name of
carrier
On its face
No reference to MTO –
carrier or master only
Authentication
removed
Consistent signing and
capacity details
No name of master

UCP 500 Article 26
a.

If a Credit calls for a transport document
covering at least two different modes of
transport (multimodal transport), banks will,
unless otherwise stipulated in the Credit,
accept a document, however named, which:
i.
appears on its face to indicate the
name of the carrier or multimodal
transport operator and to have signed
or otherwise authenticated by:
The carrier or multimodal transport
operator or a named agent for or on
behalf of the carrier or multimodal
transport operator, or
The master or a named agent for or on
behalf of the master.
Any signature or authentication of the
carrier, multimodal transport operator
or master must be identified as carrier,
multimodal transport operator or
master, as the case may be. An agent
signing or authenticating for the carrier,
master must also indicate the name
and capacity of the party i.e. carrier,
master, on whose behalf that agent is
acting,
and

91

UCP 600 Article 19
Transport Document Covering
at Least Two Different Modes of
Transport

UCP 500 Article 26
ii.

At the place stated
in the credit
Covered in Article
19(a)(ii)
ii.

Revised text appears
in Article 19(a)(iii) –
see next slide
b.

indicates that the goods have been
dispatched, taken in charge or loaded
on board.
Dispatch, taking in charge or loading on
board may be indicated by wording to
that effect on the multimodal transport
document and the date of issuance will
be deemed to be the date of dispatch,
taking in charge or loading on board
and the date of shipment. However, if
the document indicates, by stamp or
otherwise, a date of dispatch, taking in
charge or loading on board, such date
will be deemed to be the date of
shipment, and
a. indicates the place of taking in
charge stipulated in the Credit which
may be different from the port, airport
or place of lading, and the place of final
destination stipulated in the Credit
which may be different from the port,
airport or place of discharge, and/or

Contains the indication “intended” or
similar qualification in relation to the
vessel and/or port of loading and/or
port of discharge, and
92

UCP 600 Article 19
Transport Document Covering at Least Two Different
Modes of Transport
Article 19(a)(iii):
indicate the place of dispatch, taking in charge or shipment
and the place of final destination stated in the credit, even
if:
a.
b.

the transport document states, in addition, a different
place of dispatch, taking in charge or shipment or place of
final destination, or
the transport document contains the indication “intended”
or similar qualification in relation to the vessel, port of
loading or port of discharge.

93

UCP 600 Article 19
Transport Document Covering
at Least Two Different Modes of
Transport

UCP 500 Article 26
iv.

v.

No reference to sail
vi.

Not necessary due to
definition of
complying
presentation

vii.

consists of a sole original
multimodal transport document or,
if issued in more than one original,
the full set as so issued, and
appears to contain all of the terms
and conditions of carriage, or some
of such terms and conditions by
reference to a source or document
other than the multimodal transport
document (short form/blank back
multimodal transport document);
banks will not examine the contents
of such terms and conditions, and
contains no indication that it is
subject to a charter party and/or no
indication that carrying vessel is
propelled by sail only, and
in all other respects meets the
stipulations of the Credit.

94

UCP 600 Article 19
Transport Document
Covering at Least Two
Different Modes of
Transport

See next slide for
revised
transhipment
clauses

UCP 500 Article 26
b.

Even if the Credit prohibits
transhipment, banks will
accept a multimodal
transport document which
indicates that transhipment
will or may take place,
provided that the entire
carriage is covered by one
and the same multimodal
transport document.

95

UCP 600 Article 19
Transport Document Covering at Least Two Different
Modes of Transport
Article 19(b) and (c):
b.

c.

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 destinations
as stated in the credit.
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.
96

UCP 600 Article 20
Bill of Lading

Article 1 exclude or
modify
On its face
Indicate the carrier – see
next slide
Authentication removed
Consistent signing and
capacity details
No name of master
At the port of loading
stated in the credit

UCP 500 Article 23
a.

If a Credit calls for a bill of lading
covering a port-to-port shipment,
banks will, unless otherwise stipulated
in the Credit, accept a document,
however named, which:
i.

ii.

appears on its face to indicate the
name of the carrier and to have been
signed or otherwise authenticated by:
the carrier or a named agent for
or on behalf of the carrier, or
the master or a named agent for
or on behalf of the master.
Any signature or authentication of
the carrier or master must be
identified as carrier or master, as
the case may be. An agent
signing or authenticating for the
carrier or master must also
indicate the name and the
capacity of the party i.e. carrier or
master, on whose behalf that
agent is acting,
and
Indicates that the goods have been
loaded on board, or shipped on a
named vessel.

97

UCP 600 Article 20
Bill of Lading
Article 20(a)(i):
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
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.
NOTE: consistent style for all transport articles

98

UCP 600 Article 20
Bill of Lading

Covered in Article
20(a)(ii)

Covered in Article
20(a)(ii)

UCP 500 Article 23
Loading on board or shipment on a named
vessel may be indicated by pre-printed
wording on the bill of lading that the goods
have been loaded on board a named vessel or
shipped on a named vessel, in which case the
date of issuance of the bill of lading will be
deemed to be the date of loading on board
and the date of shipment.
In all other cases loading on board a named
vessel must be evidenced by a notation on
the bill of lading which gives the date on
which the goods have been loaded on board,
in which case the date of 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 vessel, loading on board a
named vessel must be evidenced by an on
board notation on the bill of lading which, in
addition to the date on which the goods have
been loaded on board, also includes the name
of the vessel on which the goods have been
loaded, even if they been loaded on the
vessel named as the “intended vessel”.

99

UCP 600 Article 20
Bill of Lading
Covered in Article 20(a)(iii)
Revised wording “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”

UCP 500 Article 23
If the bill of lading indicates a place of
receipt or taking in charge different
from the port of loading, the on board
notation must also include the port of
loading stipulated in the Credit and the
name of the vessel on which the goods
have been loaded, even if they have
been loaded on the vessel named in
the bill of lading. This provision also
applies whenever loading on board the
vessel is indicated by pre-printed
wording on the bill of lading, and
iii.
indicates the port of loading and the
port of discharge stipulated in the
Credit, notwithstanding that it:
a.

b.

indicates a place of taking in charge
different from the port of loading,
and/or a place of final destination
different from the port of discharge,
and/or
contains the indication “intended” or
similar qualification in relation to the
port of loading and/or port of
discharge, as long as the document
also states the ports of loading and/or
discharge stipulated in the Credit, and

100

UCP 600 Article 20
Bill of Lading

UCP 500 Article 23
iv.

v.

No reference to sail
definition of
complying
presentation

vi.

vii.

consists of a sole original bill of
lading or, if issued in more than
one original, the full set as so
issued, and
appears to contain all of the terms
and conditions of carriage, or some
of such terms and conditions by
reference to a source or document
other than the bill of lading (short
form/blank back bill of lading);
banks will not examine the
contents of such terms and
conditions, and
contains no indication that it is
subject to a charter party and/or
no indication that the carrying
vessel is propelled by sail only, and

101

UCP 600 Article 20
Bill of Lading

Covered in revised
Article 20(b), (c) and
(d) – see next slide

UCP 500 Article 23
b.

c.

d.

For the purpose of this Article,
transhipment means unloading and
reloading from one vessel to another
vessel during the course of ocean
carriage from the port of loading to the
port of discharge stipulated in the Credit.
Unless transhipment is prohibited by the
terms of the Credit, banks will accept a
bill of lading which indicates that the
goods will be transhipped, provided that
the entire ocean carriage is covered by
one and the same bill of lading.
Even if the Credit prohibits transhipment,
banks will accept a bill of lading which:
i.
indicates that transhipment will take
place as long as the relevant cargo
is shipped in Container(s), Trailer(s)
and/or “LASH” barge(s) as
evidenced by the bill of lading,
provided that the entire ocean
carriage is covered by one and the
same bill of lading, and/or
ii.
Incorporates clauses stating that the
carrier reserves the right to
tranship.

102

UCP 600 Article 20
Bill of Lading
Articles 20(b), (c) and (d):
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.

103

Introduction
When a credit requires port to port
shipment, a bill of lading will be
presented. In addition to reviewing
the bill of lading against the terms
and conditions of the credit, the
document checker will also need to
refer to article 20 of UCP 600.
We will examine article 20 – Bill of
Lading.
105

However Named
UCP 600 sub-article 20 (a) states that
when a credit calls for a bill of lading,
a bill of lading is acceptable ‘however’
named.
For example, if the credit calls for an
Ocean Bill of Lading and the
document presented is named Liner
Bill of Lading this would comply.
106

Name and Signature
When examining the bill of lading, the name of the
carrier must appear to be indicated. The name of the
carrier may be stated as a separate statement on the
bill of lading i.e. “King Line – the Carrier” or in the
manner the bill of lading is signed i.e. “For King Line –
the Carrier”.
The bill of lading must appear to have been signed by
the carrier or the master, or a named agent acting for
or on behalf of the carrier or master.
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.
It should be noted that where an agent signs for or on
behalf of the master, there is no longer a need to
state the name of the master.
107

Shipped On Board
The bill of lading must indicate that the goods have
been shipped on board a named vessel at the port of
loading stated in the credit.
Shipped on board may be evidenced by a pre-printed
wording to that effect. In this case the date of issue
of the bill of lading is deemed to be the date of
shipment.
Alternatively, shipped on board may be evidenced by
an on board notation indicating the date of shipment.
In this case the date indicated in the on board
notation will be taken as the date of shipment.
The date indicated in the on board notation will be
taken as the date of shipment irrespective of whether
this date is before or after the date of issuance of the
bill of lading.
108

Intended Vessel
Sometimes a bill of lading is not specific as to the
name of the vessel and may indicate an
“intended vessel” or similar qualification.
Sub-article 20 (a) (ii) states that 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.
This is required even if the name of the actual
vessel on which the goods have been shipped is
the one stated in the bill of lading as the
intended vessel.
109

Port of Loading
The port of loading in a bill of lading should
be the same as that stated in the credit.
It can happen that the bill of lading evidences
a port of loading that is not the same as that
indicated in the credit or has a qualification
such as “intended port of loading”. In this
event, the bill of lading must contain an on
board notation which includes the port of
loading indicated in the credit, the date of
shipment and the name of the vessel.
110

Original(s)
Bills of lading are issued in sets of
one or more originals – usually 3.
UCP 600 sub-article 20 (a) (iv) states
that if the credit calls for a bill of
lading then the bill of lading
presented must 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.
111

Terms and Conditions
Bills of lading are issued subject to terms and
conditions which reflect the contract of
carriage.
UCP 600 sub a
rticle 20 (a) (v) makes it clear
that the document checker must verify that the
bill of lading contains terms and conditions or
carriage or that it makes reference to another
source containing the terms and conditions of
carriage. However, it is not necessary for a
document checker to examine the contents of
the terms and conditions of carriage.
112

Charter Party
A charter party is a contract under which
the owner of a ship hires it to another party
for a specific time or purpose.
In such an event the bill of lading should
make reference to the fact that it is subject
to a charter party.
UCP 600 sub-article 20 (a) (vi) stipulates
that for a bill of lading to be acceptable
under article 20, it must not appear to
contain an indication that it is subject to a
charter party.
113

Transhipment
During a port-to-port shipment, transhipment will often
occur.
UCP 600 sub-article 20 (b) provides a definition of
transhipment where a bill of lading is presented.
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.
Generally, credits will indicate whether transhipment is
allowed or not. if a credit does not contain any condition in
relation to transhipment, then transhipment is allowed.
Even if a credit prohibits transhipment a bill of lading
indicating that transhipment will or may take place is
acceptable, provided the bill of lading indicates that the
goods have been shipped in containers, trailers or LASH
barges.
114

UCP 600 Article 21
Non-Negotiable Sea
Waybill

UCP 500 Article 24

Same comments
apply as for
Article 20 – Bill of
Lading

115

UCP 600 Article 22
Charter Party Bill of Lading

Changed opening –
“containing an indication
it is subject to a charter
party”
On its face
New capacity/signer =
Charterer
No name of master

UCP 500 Article 25
a.

If a Credit calls for or permits a
charter party bill of lading, banks will,
unless otherwise stipulated in the
Credit, accept a document, however
named, which:
i.
ii.

contains any indication that it is subject
to a charter party, and
appears on its face to have been signed
or otherwise authenticated by:
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.

Any signature or authentication of the
master or owner must be identified as
master of owner as the case may be.
An agent signing or authenticating for
the master or owner must also indicate
the name and the capacity of the
party, i.e. master or owner, on whose
behalf that agent is acting,
and

116

UCP 600 Article 22

No equivalent in
Article 22
“....at the port of
loading stated in the
credit....”
Covered in Article
22(a)(ii)

UCP 500 Article 25
iii.
iv.

does or does not indicate the name of the
carrier, and
Indicates that the goods have been
loaded on board or shipped on a named
vessel.
Loading on board or shipment on a
named vessel may be indicated by preprinted wording on the bill of lading that
the goods have been loaded on board a
named vessel or shipped on a named
vessel, in which case the date of issuance
of the bill of lading will be deemed to be
the date of loading on board and the date
of shipment.
In all other cases loading on board a
named vessel must be evidenced by a
notation on the bill of lading which gives
the date on which the goods have been
loaded on board, in which case the date
of the on board notation will be deemed
to be the date of shipment,
and

117

UCP 600 Article 22

Geographical or region as
port of discharge is
acceptable
Reference to sail is deleted
definition of complying
presentation
Refined text in Article 22(b)
– “A bank will not examine
charter party contracts,
even if they are required to
be presented by the terms
of the credit.”

UCP 500 Article 25
v.
vi.
vii.
viii.
b.

indicates the port of loading and the
port of discharge stipulated in the
Credit, and
consists of a sole original bill of lading
or, if issued in more than one original,
the full set as so issued, and
contains no indication that the carrying
vessel is propelled by sail only, and
Even if the Credit requires the
presentation of a charter party
contract in connection with a charter
party bill of lading, banks will not
examine such charter party contract,
but will pass it on without
responsibility on their part.

118

UCP 600 Article 23
Air Transport Document

Article 1 exclude or
modify
On its face
Indicate the name of the
carrier
Signing capacities shown
in Article 23(a)(i)
Covered in Article
23(a)(ii)

UCP 500 Article 27
a.

If a Credit calls for an air
transport document, banks will,
unless otherwise stipulated in the
Credit, accept a document,
however named, which:
i.

ii.

appears on its face to indicate
the name of the carrier and to
have been signed or otherwise
authenticated by:
the carrier, or
a named agent for or on
behalf of the carrier.
Any signature or authentication
of the carrier must be identified
as carrier. An agent signing or
authenticating for the carrier
must also indicate the name and
the capacity of the party, i.e.
carrier, on whose behalf that
agent is acting, and
indicates that the goods hae been
accepted for carriage, and

119

UCP 600 Article 23

Date in a notation = date
of shipment (whether
requested by the credit
or not)
Any other information
outside the notation, will
not be considered for
determining the date of
shipment
Covered in Article
22(a)(iv)

UCP 500 Article 27
iii.

iv.

where the Credit calls for an actual
date of dispatch, indicates a specific
notation of such date, the date of
dispatch so indicated on the air
transport document will be deemed to
be the date of shipment.
For the purpose of this Article, the
information appearing in the box on
the air transport document (marked
“For Carrier Use Only” or similar
expression) relative to the flight
number and date will not be
considered as a specific notation of
such date of dispatch.
In all other cases, the date of issuance
of the air transport document will be
deemed to be the date of shipment,
and
indicates the airport of departure and
the airport of destination stipulated in
the Credit,
and

120

UCP 600 Article 23

Covered in Article
23(a)(v)
Covered in Article
23(a)(vi)
definition of complying
presentation

UCP 500 Article 27
v.

appears to be the original for
consignor/shipper even if the
Credit stipulates a full set of
originals, or similar
expressions, and
vi. appears to contain all of the
terms and conditions of
carriage, or some of such
terms and conditions, by
reference to a source or
document other than the air
transport document; banks
will not examine the contents
of such terms and conditions,
and
vii. In all other respects meets
the stipulations of the Credit.

121

UCP 600 Article 23

UCP 500 Article 27
b.

Covered in Article
23(b) and (c) – see
next slide
c.

For the purpose of this
Article, transhipment means
unloading and reloading from
one aircraft to another
aircraft during the course of
carriage from the airport of
discharge to the airport of
destination stipulated in the
Credit.
Even if the Credit prohibits
transhipment, banks will
accept an air transport
document which indicates
that transhipment will or may
take place, provided that the
entire carriage is covered by
one and the same air
transport document.
122

UCP 600 Article 23
Articles 23(b) and (c):
b.

c.

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.
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.

123

Introduction
When a credit requires a transport
document covering shipment from an
airport to an airport, an air transport
document will be presented. In addition to
reviewing the air transport document
against the terms and conditions of the
credit, the document checker will also need
to refer to article 23 of UCP 600.
We will examine article 23 – Air Transport
Document.
125

However Named
UCP 600, sub-article 23 (a) states
that when a credit calls for an air
transport document, then an air
transport document is acceptable
“however” named.
For example, if the credit calls for an
Air Waybill and the document
presented is named Air Consignment
Note this would comply.
126

Name and Signature
When examining the air transport document, the
name of the carrier must appear to be indicated.
The name of the carrier may be stated as a
separate statement on the air transport
document i.e. “King Air Cargo – the Carrier” or in
the manner the air transport document is signed
i.e. “For King Air Cargo – the Carrier”.
The air transport document must appear to have
been signed by the carrier, or a named agent
acting for or on behalf of the carrier.
Any signature by an agent must indicate whether
the agent has signed for or on behalf of the
carrier.
127

Date of Shipment
The air transport document must indicate that the
goods have been accepted for carriage and indicate a
date of issuance.
For example, an air transport document was issued on
the 10th of August. Thus, 10th of August 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 this event, the date
stated in the notation, for example, 9th of August,
then 9th of August will be deemed to be the date of
shipment. If a specific notation exists on the air
transport document, the date of shipment will be the
date appearing in the notation i.e. 9th August.

128

Flight Number and Date
UCP 600 sub-article 23 (a) (iii) states
that any information appearing on the
air transport document relative to the
flight number and date will not be
considered in determining the date of
shipment.
The shipment date is deemed to be
the date of shipment from the airport
of departure to the airport of
destination stated in the credit.
129

Airports Indicated
UCP 600, sub-article 23 (a) (iv)
stipulates that an air transport
document must indicate the airport of
departure and the airport of
destination stated in the credit.

130

Original For Consignor
UCP 600, sub-article 23 (a) (v) states
that the air transport document must
be the original for the consignor or
shipper, even if the credit stipulates a
full set of originals.

131

Terms and Conditions
Air transport documents are issued subject
to terms and conditions which reflect the
contract of carriage.
UCP 600 sub-article 23 (a) (vi) makes it
clear that the document checker must
verify that the air transport document
contains terms and conditions of carriage or
that it makes reference to another source
containing the terms and conditions of
carriage. However, it is not necessary for a
document checker to examine the contents
of the terms and conditions of carriage.
132

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