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Introductionto UCP 600for Importers
Introduction to UCP 600 for Importers
Victor PenaVice President Americas Regional Trade Advisor
Global Transaction ServicesCash Management Trade Services and Finance Securities Services Fund Services
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“These materials are provided for educational and illustrative
purposes only and not as a solicitation by Citigroup for any
particular product or service.
Furthermore, although the information contained herein is
believed to be reliable, the following does not constitute legal
advice, and Citigroup makes no representation or warranty as to
the accuracy or completeness of any information contained
herein or otherwise provided by it.”
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UCP 600 Understanding & Application
Review History & Process
Comparison with UCP 500
Overview of UCP 600 Articles
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The UCP is the work of the ICC, a private international organization founded in 1919.
Remains, to date, the most successful set of private rules for trade ever developed.
UCP 600 – Sixth (6th) revision since it’s inception by theInternational Chamber of Commerce in 1933
Included review - ICC Opinions, Decisions, DOCDEX cases, legal decisions, URR525, ISP98 and eUCP
Review History & Process
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Review History & Process
*Seven Articles that have lead to nearly 60% of ICC Opinions are:
- Article 9 Liability of Issuing and Confirming Banks- Article 13 Standard for Examination of Documents- Article 14 Discrepant Documents and Notice- Article 21 Unspecified Issuers of Contents of Documents- Article 23 Marine/Ocean Bills of Lading- Article 37 Commercial Invoices- Article 48 Transferable Credits
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Review History & Process
ICC National Committees were requested to vote on issues such as:– “On its face”, “Reasonable time”, “Negotiation” - leave out or retain– Introduction of new articles, splitting of others, “parties” or “banks”, – Discounting of deferred payment undertakings”– Degree of review for “inconsistency” or “non conflicting”
ICC unanimously approved 2007 Revision on 25th October 2006
Effective July 1, 2007
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New terminology, concepts & wording introduced
Re-organization of the rules
Substantive & cosmetic changes
Improved clarity, yet created new ambiguity
IrrevocableIrrevocableIrrevocable
IndependentIndependentIndependent DocumentaryDocumentaryDocumentary
What’s not changed …
Comparison with UCP 500
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Comparison with UCP 500
UCP 600 (39 Articles)
New:– Article 2 Definitions– Article 3 Interpretations– Article 9 Advising of Credits
& Amendments– Article 12 Nomination– Article 15 Complying
Presentation– Article 17 Original Documents
& Copies
UCP 500 (49 Articles)
Not included in new Revision:
– Article 5 Instructions to Issue/Amend Credits
– Article 6 (part) Revocable– Article 8 Revocation– Article 12 Incomplete or
Unclear Instructions– Article 38 Other Documents– Articles 2,6,9,10,20,21,22,
30,31,33,35,36,46,47 content merged or amalgamated
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Comparison with UCP 500
No Change from UCP 500 legal status
Rules apply to LC by incorporation into the LC - not by operation of the law
Rules may be overridden by express terms in the L/C
Rules are subject to interpretation by national courts
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General Provisions and Definitions 1 - 5
Liabilities and Responsibilities 6 - 13
Examination of Documents 14 - 17
Documents 18 - 28
Miscellaneous Provisions 29 - 33
Disclaimers 34 - 37
Transferable Credit & Assignment 38 - 39
UCP 600 39 UCP 500 49v.v.
Overview of UCP 600 Articles
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Use of SWIFT:
This credit is subject to the Uniform Customs and Practice This credit is subject to the Uniform Customs and Practice for Documentary Creditsfor Documentary Credits,, 2007 2007 RRevisionevision, ICC Publication , ICC Publication No. 600.No. 600.
This credit is subject to UCP 600This credit is subject to UCP 600
40E:40E: Applicable RulesApplicable RulesUCP LATEST VERSIONUCP LATEST VERSION
Use of telex or letter:
Applicable when the credit expressly indicates that is subject to these “rules” - (SWIFT changes have been made to bring in line).
Overview of UCP 600 Article 1
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“Binding on all parties unless modified or excluded by the terms of the L/C.”
Contrary to article 32 of the UCP, Contrary to article 32 of the UCP, ththis is credit remaincredit remainssvalid for subsequent valid for subsequent instalinstalllmentsments despite any shipment despite any shipment or drawing not made within the period allowed.or drawing not made within the period allowed.
SubSub--Article 28(c) does not apply.Article 28(c) does not apply.
Documents must not be dated earlier than the date ofDocuments must not be dated earlier than the date ofthe issuance of this credit.the issuance of this credit.
Overview of UCP 600 Article 1
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A Advising bank H Honour
Applicant
B Banking day
Beneficiary
C Complying presentation
Confirmation
Confirming bank
Credit
I Issuing bank
N Negotiation
Nominated bank
P Presentation
Presenter
Banking day
Honour
Negotiation
Presenter
PresentationComplying presentation
Nominated bank
Article 2 – Definitions (UCP 500 - Part of Art. 2, 7, 9, & 10)NEW
Certain terms are defined, so that they provide references whenCertain terms are defined, so that they provide references whensuch terms are used in the articlessuch terms are used in the articles
Overview of UCP 600 Article 2
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Honour
Pay at sightPay at sight
Incur deferred payment undertakingIncur deferred payment undertakingPay at maturityPay at maturity
Accept bill of exchangeAccept bill of exchangePay at maturityPay at maturity
For credit available by For credit available by ……
Sight paymentSight payment
Deferred paymentDeferred payment
Acceptance Acceptance
Negotiation– Purchase by the nominated bank of drafts (drawn on another bank)
and/or documents under a complying presentation,– By advancing or agreeing to advance funds to beneficiary, on or
before the banking day on which reimbursement is due to thenominated bank.
Overview of UCP 600 Article 2
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Nominated Bank
The bank with which the credit is available, or any bank in the case of a freely available credit
BeneficiaryBeneficiaryAdvising Advising BankBank
Issuing Issuing BankBank
IssuingIssuing AdvisingAdvising
Nominated Nominated BankBank
Nominated Nominated BankBank
L/C available with any bank
Any bank is a nominated bank
Nominated Nominated BankBank
Restricted L/C
Bank named in the L/C
Overview of UCP 600 Article 2
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Article 3 – Interpretations (UCP 500 - Art. 47 & part of Art. 2, 20, 46)
30 days 30 days fromfrom shipment dateshipment date 30 days 30 days afterafter shipment dateshipment date==Shipment date: 1 AUG 2007Shipment date: 1 AUG 2007 Maturity date: 31 AUG 2007Maturity date: 31 AUG 2007
For determining maturity date, the words For determining maturity date, the words ““fromfrom”” and and ““afterafter””exclude the date mentioned exclude the date mentioned (ISBP (ISBP –– 45,d)45,d)
A credit is irrevocable even if no indication to that effect.A credit is irrevocable even if no indication to that effect.
NEW
NEW
NEW
Overview of UCP 600 Article 3
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For determining a period of shipment, the words “from” and “after” have different meanings
– “From” includes the date mentioned– “After” excludes the date mentioned
Shipment to be effectedShipment to be effectedfromfrom August 10thAugust 10th
Earliest shipment dateEarliest shipment dateis August 10this August 10th==
Shipment to be effectedShipment to be effectedafter after August 10thAugust 10th
Earliest shipment dateEarliest shipment dateis August 11this August 11th==
Overview of UCP 600 Article 3
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Independence Principle - L/C is a separate transaction from the underlying contract
Banks should discourage any attempt to include contract as integral part of L/C
Contract No.123Contract No.123L/CL/C
Details as per Contract Details as per Contract No.123, which is No.123, which is appended and forms an appended and forms an integral part of the credit. integral part of the credit.
DiscouragedDiscouraged ????
Article 4 - Credits v. Contracts (UCP 500 - Art. 3)
NEW
Overview of UCP 600 Article 4
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Overview of UCP 600 Article 5
Article 5 - Documents v. Goods/Services/Performance (UCP 500 - Art. 4)
Banks deal with documents and not with goods, services or performances to which the documents may relate.
In Credit operations all parties concerned deal with documents, and not with goods, services and/or other performances to which the documents may relate. (UCP 500 Article 4)
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Place for presentation– Bank with which the L/C is available, or– Any bank, if the L/C is available with any bank, and– Issuing bank
L/C available with any bank L/C available with Bank XYZ
1.1. Any bankAny bank
2.2. Issuing bankIssuing bank
1.1. Bank XYZBank XYZ
2.2. Issuing bankIssuing bank
Place for presentationPlace for presentation
Expiry date
Last day for presentation of documents
Overview of UCP 600 Article 6
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Article 9 - Advising of Credits and Amendments (UCP500 - Art.7, 11,b)
By advising an L/C, the advising bank signifies:– Its without any undertaking to honour or negotiate– It has satisfied itself as to the apparent authenticity of the L/C
or amendment– The advice accurately reflects the L/C’s terms and conditionsNEW
Overview of UCP 600 Article 9
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Article 10 – Amendments (UCP500 - Art. 9,d)
Confirming bank must inform issuing bank of election not toextend confirmation to an amendment and may advisebeneficiary of amendment without it’s confirmation
Partial acceptance = Notice of rejection
Disregard any provision that the amendment shall be in force unless rejected by beneficiary within certain time
Presentation that complies with the credit and not yet accepted amendment – deemed to be beneficiary’s acceptance of the amendment
Overview of UCP 600 Article 10
NEW
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Article 12 – Nomination (UCP500 - Art. 10,c)
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
L/CL/C
Available with Available with Citibank N.A. by Citibank N.A. by deferred paymentdeferred paymentat 90 days after at 90 days after date of shipmentdate of shipment
Citibank N.A.Citibank N.A. is authorized to :is authorized to :
1.1. Incur a Deferred Payment Incur a Deferred Payment Undertaking (Undertaking (““DPUDPU””); and); and
2.2. ““PrepayPrepay”” its DPU (its DPU (ieie early early payment before maturity)payment before maturity)
Nomination does not obligate nominated bank to honour
NEW
Overview of UCP 600 Article 12
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Article 14 - Standard for Examination of Documents (UCP 500 - Art. 13, 21, 22)
Must examine documents on their face to determine compliance Must examine documents on their face to determine compliance
Other than the commercial invoice, description of goods, Other than the commercial invoice, description of goods, servicesservicesor performanceor performance,, may be stated in general termsmay be stated in general terms
Disregard documents not required by L/C and may be returnedDisregard documents not required by L/C and may be returned
Disregard nonDisregard non--documentary conditiondocumentary condition
Documents may be dated prior to issuance date of LC, but notDocuments may be dated prior to issuance date of LC, but notlater than date of presentationlater than date of presentation
Overview of UCP 600 Article 14
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UCP 500: Reasonable time, not to exceed SEVEN banking days following the day of receipt of documents
00 11 22 33 44 XX XX 55UCP 600UCP 600
00 11 22 33 44 XX XX 55 66 77UCP UCP 500500
MM TuTu WW ThTh FF SaSa SS MM TuTu WW
UCP 600: Max. of FIVE banking days following day of presentation. Not curtailed or affected by other events.
What is reasonable ?What is reasonable ?
Overview of UCP 600 Article 14
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Presentation Period
Presentation including an original transport document must be made not later than 21 calendar days after date of shipment
Transport document - Subject to Articles 19-25
Overview of UCP 600 Article 14
Data Not Conflicting
Data in a document must not conflict with data in that document, other stipulated documents or the L/C
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Unspecified Issuer or Content
Other than invoice, transport document or insurance document, banks will accept the document if (1) its content appears to fulfill the function, and (2) it complies with 14(d)
Example: L/C calls for Inspection Certificate
Goods have been inspected and are certified to be in order.
Signed
Dated
Goods have been inspected and are certified to be in order.Signed
Dated
Inspection Inspection CertificateCertificate
Goods are certified to be of Singapore origin.
Signed
Dated
Inspection Inspection CertificateCertificate
1 AUG 20071 AUG 2007 1 AUG 20071 AUG 2007 1 AUG 20071 AUG 2007
Overview of UCP 600 Article 14
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Addresses of Beneficiary & Applicant
Need not be the same between stipulated documents & the credit; but
Must be within the same country as in the credit
Disregard contact details of beneficiary and applicant (fax, phone, email) stated in the credit (ISBP 61)
However, if they form part of consignee and notify party details intransport document, applicant’s contact details must be as stated in the credit
NEW
Overview of UCP 600 Article 14
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Shipper, Consignor, Transport Document IssuerShipper or consignor of goods indicated on any documents need not be the L/C beneficiary, but must be consistent among all documents
Transport document may be issued by party other than carrier/ owner/ master/ charterer, provided it meets the requirements of articles 19, 20, 21, 22, 23 or 24
NEW
Overview of UCP 600 Article 14
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Notice of refusal must be given no later than close of the fifth banking day following day of presentation
After providing notice of refusal– The bank may return documents to presenter at any time
Article 16 – Discrepant Documents, Waiver and Notice (UCP 500 – Art. 14,b,c,d,e)
Nominated/Confirming/Issuing bank may refuse to honour ornegotiate discrepant documents
Issuing bank, in its sole judgment approach applicant for waiver
NEW
Overview of UCP 600 Article 16
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Single Notice of Refusal must state:– the bank is refusing to honour or negotiate, – each discrepancy in respect of the refusal, and– one of the following:
The bank is holding documents pending presenter’s further instructions
The bank is returning the documents
The bank is acting in accordance with instructions previously received from the presenter
The issuing bank is holding documents until it receives waiver from applicant and agrees to accept it, or receives further instructions from presenter prior to agreeing to accept the waiver
NEWNEW
NEWNEW
Overview of UCP 600 Article 16
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Article 17 – Original Documents and Copies (UCP 500 - Art. 20,c,ii)
At least one original must be presentedAt least one original must be presented
Original Document = apparent original signature, mark, stamp orOriginal Document = apparent original signature, mark, stamp orlabel of issuer of the doclabel of issuer of the documentument
Also an Original = written, typed, perforated or stamped by theAlso an Original = written, typed, perforated or stamped by thedocument issuerdocument issuer’’s hand; ors hand; oron original stationery; oron original stationery; orstates that it is originalstates that it is original
L/C requires copies of documents, either originals or copies isL/C requires copies of documents, either originals or copies isacceptableacceptable
Documents Documents ““in duplicatein duplicate””, , ““in two foldin two fold”” or or ““in two copiesin two copies””, , presentation of at least one original and remaining number ipresentation of at least one original and remaining number inncopies is acceptable.copies is acceptable.
Overview of UCP 600 Article 17
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Issued by beneficiary, made out in the name of applicant, and need not be signed (except as provided inarticle 38 – Transferable L/C)
Invoice amount in excess of L/C – May be accepted by the nominated bank, but must not be honoured or negotiated in excess of L/C amount
Description of goods, services or performance must correspond with L/C description
Must be in the same currency as L/C
Article 18 – Commercial Invoice (UCP 500 - Art. 37)
Overview of UCP 600 Article 18
NEW
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Courier and Post Receipts29Courier Receipt, Post Receipt or Certificate of Posting
25
Road, Rail or Inland Waterway Transport Documents
28Road, Rail or Inland Waterway Transport Documents
24
Air Transport Document27Air Transport Document23
Charter Party Bill of Lading25Charter Party Bill of Lading22
Non-Negotiable Sea Waybill24 Non-Negotiable Sea Waybill21
Marine/Ocean Bill of Lading23Bill of Lading20
Multimodal Transport Document26Transport Document Covering At Least Two Different Modes of Transport
19
UCP 600 UCP 500
Overview of UCP 600 – Transport Articles
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New SWIFT 700 fields for transport details:
Place of Final Destination/ For Transportation to …/ Place of Delivery
44B
Port of Discharge/ Airport of Destination44F
Port of Loading/ Airport of Departure44E
Place of Taking in Charge/ Dispatch from …/ Place of Receipt
44A
Overview of UCP 600 – Transport Articles
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As AgentAs Agent
ForFor MasterMaster
ABC ForwardersABC Forwarders
As AgentAs Agent
ForFor Master, Master, Takashi Takashi YanagawaYanagawa
ABC ForwardersABC Forwarders600600 600600
500500 500500
Must appear to indicate name of carrier
Signed by carrier, master or named agent
If signed by agent, need to specify for whom - carrier or master - it is signed
Article 19 – Transport Documents Covering at Least TwoDifferent Modes of Transport (UCP500 - Art. 26)
Overview of UCP 600 Article 19
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Must appear to indicate name of carrier
Signed by carrier, master or named agent– If signed by master, name of master is not necessary
If signed by agent, need to specify for whom,carrier or master - it is signed
Article 20 – Bill of Lading (UCP500 – Art. 23)Article 21 – Non-Negotiable Sea Waybill (UCP500 – Art. 24)
MasterMaster 600600500500
As AgentAs Agent
ForFor Master,Master, John DoeJohn Doe
ABC ForwardersABC Forwarders600600
500500As AgentAs AgentForFor MasterMaster
ABC ForwardersABC Forwarders600600
500500
Overview of UCP 600 Article 20 & 21
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B/L containing indication that it is subject to a charter party
Signed by master, owner, charterer or named agent– If signed by master, or owner, or charterer, their
names are not necessary
If signed by agent, need to specify for whom –master, owner or charterer - it is signed
Charter Party Bill of Lading (UCP500 – Art. 25)
Master, Owner or Master, Owner or ChartererCharterer 600600
Overview of UCP 600 Article 22
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Agent signing for owner or charterer must indicate name of owner or charterer
As AgentAs Agent
For For ChartererCharterer, , John DoeJohn Doe
ABC ForwardersABC Forwarders600600
As AgentAs Agent
ForFor Owner, John DoeOwner, John Doe
ABC ForwardersABC Forwarders600600
As AgentAs Agent
ForFor MasterMaster
ABC ForwardersABC Forwarders600600
Overview of UCP 600 Article 22
Charter Party Bill of Lading (UCP500 – Art. 25)
40
Port of discharge may be shown as a range of ports, or geographical area, as stated in L/C (ISBP 106)
– e.g. L/C calls for shipment to Asian portsNEW
Overview of UCP 600 Article 22
Charter Party Bill of Lading (UCP500 – Art. 25)
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Must appear to indicate name of carrier
Signed by carrier or named agent
If signed by agent, need to indicate that agent has signed for or on behalf of carrier
Must indicate date of issuance, which will be deemed tobe the date of shipment, unless……….
Specific notation of actual date of shipment, even not called for in the credit, will be deemed to be the date ofshipment
Article 23 – Air Transport Document (UCP500 – Art. 27)
NEW
Overview of UCP 600 Article 23
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If it does not identify the carrier, any signature or stamp of railway company is accepted as being signed by thecarrier (ISBP – 172)
Transport document marked “duplicate” is accepted as an originalTransport document will be accepted as original whethermarked as an original or not (also applicable to inlandwaterway transport)
For rail transport document:
Road transport document marked for consignor or shipperor bear no marking for whom the document has beenprepared – is the original
NEW
NEW
Overview of UCP 600 Article 24
Road, Rail or Inland WaterwayTransport Documents(UCP500 – Art. 28)
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Insurance document – Insurance policy, insurance certificate or declaration under open cover
Issued and signed by insurance company, underwriter or their agents or their proxies
Signature by agent or proxy indicated as being for or on behalf of insurance company or underwriter
ABC Insurance Co. Ltd.ABC Insurance Co. Ltd.ABC Insurance Co. Ltd.ABC Insurance Co. Ltd.Agent forAgent for
Article 28 – Insurance Document and Coverage (UCP500 – Art. 34-36)
ABC Insurance Co. Ltd.ABC Insurance Co. Ltd.By proxy forBy proxy for
Overview of UCP 600 Article 28
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All originals must be presented, if the document indicates that more than one original has been issued
Cover Note not acceptable
Insurance policy is acceptable in lieu of insurance certificate or declaration under open cover
Issued no later than shipment date, or it appears from the document that cover is effective from a date no later than shipment date
Issued on 8 AUG 2007
Effective Date1 AUG 2007
Insurance PolicyInsurance Policy
Issued on 1 AUG 2007
Shipped On Board1 AUG 2007
Bill of LadingBill of Lading
Issued on 8 AUG 2007
Effective Date1 AUG 2007
Insurance PolicyInsurance Policy
Issued on 1 AUG 2007
Shipped On Board1 AUG 2007
Bill of LadingBill of Lading
Article 28 – Insurance Document and Coverage (UCP500 – Art. 34-36)
Overview of UCP 600 Article 28
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Min. 110% of CIF or CIP value, if L/C does not indicate insurance coverage required
If CIF or CIP value cannot be determined from documents – take the greater of the following:
– Amount for which honour or negotiation is requested; or– Gross invoice value of the goods
Place of taking in charge or Place of taking in charge or shipmentshipment
Place of dischargePlace of discharge or final or final destinationdestination
… as stated in the L/C
Risks covered at least : NEW
Article 28 – Insurance Document and Coverage (UCP500 – Art. 34-36)
Overview of UCP 600 Article 28
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L/C should state type of insurance required and additional risks to be covered
If L/C uses imprecise terms such as “usual risks” or “customary risks”, bank will accept insurance document without regard to any risks not covered
If L/C requires insurance against “all risks”, bank will accept insurance document containing any “all risks” notation or clause, without regard to any risks stated to be excluded
Insurance document may :– Contain reference to any exclusion clause– Indicate that cover is subject to franchise or excess
(deductible)
NEW
Article 28 – Insurance Document and Coverage (UCP500 – Art. 34-36)
Overview of UCP 600 Article 28
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Partial drawings or shipments are allowed
Presentation of multiple sets of transport docs evidencing shipment on the same means of conveyance (e.g. vessel, aircraft) from different ports/places on different dates and for the same journey to the same destination – not partial shipment
AAA BBB CCC = L/C quantity= L/C quantity
Port APort A
Port BPort B
Port CPort C
B/L B/L ““AA”” AUG 1AUG 1AUG 1
B/L B/L ““BB”” AUG 7AUG 7AUG 7
B/L B/L ““CC”” AUG 9AUG 9AUG 9
Take latest of the shipment dates as date of shipment (Aug 9 in the above example) (ISBP 89)
•• Same vessel and voyageSame vessel and voyage
•• Same destinationSame destinationPort DPort D
Article 31 – Partial Drawings or Shipments (UCP 500 – Art. 40)
Overview of UCP 600 Article 31
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Presentation of multiple sets of transport docs evidencing shipment on more than one means of conveyance within the same mode of transport(e.g. shipment by truck) will be regarded as partial shipment, even if shipped on the same day for the same destination (ISBP 89)
AAA BBB CCC = L/C quantity= L/C quantity
AUG 1AUG 1AUG 1
AUG 1AUG 1AUG 1
AUG 1AUG 1AUG 1
DestinationDestinationDD
Partial ShipmentPartial ShipmentTruckTruck AA
TruckTruck BB
TruckTruck CC
NEW
Overview of UCP 600 Article 31
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Article 37 Article 37 –– Disclaimer for Acts of an Instructed PartyDisclaimer for Acts of an Instructed Party(UCP 500 (UCP 500 –– Art. 18)Art. 18)
Bank instructing another bank to perform services is liablefor that bank’s charges
Issuing bank is liable for charges that cannot be collectedor deducted from the proceeds
Overview of UCP 600 Article 37
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Transferable credit – An L/C may be made available by the transferring bank to a second beneficiary
TransferringTransferringBankBank
IssuingIssuingBankBank
ApplicantApplicantApplicant FirstBeneficiary
FirstFirstBeneficiarBeneficiaryy
SecondBeneficiary
SecondSecondBeneficiaryBeneficiary
11 22 33 44
1.1. L/C applicationL/C application
2.2. Transferable creditTransferable credit
3.3. Request for transferRequest for transfer
4.4. Transferred creditTransferred credit ––((Credit has been made available Credit has been made available to a second beneficiary)to a second beneficiary)
Article 38 – Transferable Credits (UCP 500 - Art. 48)
NEW
(May be the(May be theIssuing Bank)Issuing Bank)
Overview of UCP 600 Article 38
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Transferred credit must accurately reflect the terms and conditions of the credit, including confirmation …
Second beneficiary’s documents may be sent to issuing bank if first beneficiary fails, on first demand, to:
– Present its invoice (and draft, if any), or– Rectify discrepancies in its invoice (where such discrepancies did not
exist in second bene’s invoice)NEW
Article 38 – Transferable Credits (UCP 500 - Art. 48)
Overview of UCP 600 Article 38
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38 (k): Second beneficiary’s documents must be presented to transferring bank
Second beneficiary’s documentsFirst beneficiary’s draft & invoiceDocuments after substitution
AABB
CC
NEW
Article 38 – Transferable Credits (UCP 500 - Art. 48)
Overview of UCP 600 Article 38
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Bank not obligated to effect transfer
All charges relating to the transfer are for the account of first beneficiary
If L/C allows partial drawings or shipments, it can be transferred in part to more than one second beneficiary
Transferred L/C cannot be transferred to any subsequent beneficiary
Must determine the handling of subsequent amendments
Rejection of an amendment by one or more second beneficiary doesnot invalidate the acceptance by any other second beneficiary
Allowable changes:- credit amount - unit price - expiry date - period for presentation- latest shipment date - percentage of insurance coverageFirst beneficiary’s name may be substituted for that of the applicant
Honour or negotiation of transferred L/C may be in the second beneficiary’s country
Overview of UCP 600 Article 38
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Overview of UCP 600 Articles
Article 7 – Issuing Bank Undertaking (UCP500 – part of Art. 9,a)
Article 8 – Confirming Bank Undertaking (UCP500 - 9,c and part of Art.9,b)
Article11 – Teletransmitted and Pre-Advised Credits and Amendments (UCP 500 - Art. 11,a,c)
Article 13 – Bank to Bank Reimbursement Agreements (UCP500 - Art.19)
Article 15 – Complying Presentation NEW
Article 25 – Courier Receipt, Post Receipt or Certificate of Posting(UCP 500 – Article 29)
Article 26 – “On Deck”, “Shipper’s Load and Count”, “Said by Shipper to Contain” and Charges Additional to Freight(UCP 500 – Art. 31,i,ii and Art. 33,d)
55
Overview of UCP 600 Articles
Article 30 – Tolerance in Credit Amount, Quantity and Unit Prices(UCP500 - Art. 39)
Article 32 – Installment Drawings or Shipments (UCP 500 - Art. 41)
Article 33 – Hours of Presentation (UCP 500 - Art. 45)
Article 36 – Force Majeure (UCP 500 - Art. 17)
Article 27 – Clean Transport Document (UCP 500 – Art. 32)
Article 29 – Extension of Expiry Date or Last Day for Presentation(UCP 500 – Art. 44)
Article 34 – Disclaimer on Effectiveness of Documents(UCP 500 - Art. 15)
Article 35 – Disclaimer on Transmission and Translation(UCP 500 - Art. 16)
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Any Questions?
Our Technical Trade Specialists are happy to answer your technical LC questions. Please mention that you attended our Introduction to UCP 600 for Importers Webinar!
Barbara Fernandez in Tampa, FL
Phone: 1-813-604-7088
E-Mail: barbara.e.fernandez@citigroup.com
Victor Pena in Tampa, FL
Phone: 1-813-604-7042
E-Mail: victor.a.pena@citigroup.com
Our Trade Bankers are available to provide additional information about our trade services, our trade finance capabilities, and our global network. Please contact:
Phyllis Kai-Kee in New York, USA
Phone: 1-213-239-1749
E-Mail: phyllis.kaikee@citigroup.com
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