UCP 600

A Corporate Perspective on the Changes

to the UCP - Things you Need to Know

Presenter - Donald R. Smith, Norman Technologies

don.smith@normantech.com
 History in 30 Seconds
„ 9 person Drafting Group
„ 39 member Consulting Group
„ 7 Articles accounted for 58% of all ICC Opinions re:
UCP 500: 9, 13, 14, 21, 23, 37, 48
„ Article 14 resulted in more ICC Opinions than any
other article
„ 17 Articles had 0, or only 1 or 2 ICC Opinions
„ Approved October 25 by ICC Banking Commission
„ Rules have an “implementation date” of July 1, 2007

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 MAJOR CHANGES
„ 4 Position Papers of September 1994 not effective for
UCP 600 as they were written specifically for the UCP
500 and the principles contained therein have been
incorporated.
„ ICC Decision on Originals – the major points were
incorporated into UCP 600 Article 17 in principle and
the full Decision will be an annex to the revised ISBP.

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 MAJOR CHANGES
„ 6 Articles Removed:
– 5 – Instructions to Issue/Amend Credits
– 6 – Revocable vs Irrevocable Credits
– 8 – Revocation of a Credit
– 12 – Incomplete or Unclear Instructions
– 30 – Freight Forwarders Transport Documents
– 38 – Other documents

„ Several Articles merged:

– The content of UCP 500 articles 2, 6, 9, 10, 20, 21, 22, 30,
31, 33, 35, 36, 46 & 47 were merged or dealt with in other
ways within the text of the revision.

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 UCP 600
„ All quoted material comes from the final draft version
of the ICC Uniform Customs and Practice for
Documentary Credits “UCP 600”
„ The “UCP 600” is copyright ICC Publishing.
„ Reproduction in any manner is strictly prohibited.
„ The UCP 600 and important related materials may be
purchased at:
www.iccbooksusa.com
Telephone: 212-703-5066 Fax: 212-944-0012
E-mail: iccbooks@uscib.org

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 Definitions
„ Article 2 – New Article – Important Definitions:

Among the most important are:

Honour

Negotiation

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 Definitions
„ Article 2 – New Article – Important Definitions:

– “Honour” means:
– 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.”

„ “HONOUR” IS NOT ACCOMPLISHED FOR A TIME

CREDIT UNTIL PAYMENT IS MADE AT MATURITY.

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 Definitions
„ Article 2 – New Article – Important Definitions:

– “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.”

„ IN UCP 500, “NEGOTIATION” WAS DEFINED AS

‘GIVING VALUE.’

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 Negotiation
„ Article 12 (c):

– “Receipt or examination and forwarding of documents by a

nominated bank that is not a confirming bank does not make
that nominated bank liable to honour or negotiate, nor does it
constitute honour or negotiation.”

„ NEGOTIATION MEANS “PURCHASE” UNDER UCP

600

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 Standard for Examination
„ Article 14 (b):

– “A nominated bank acting on its nomination, a confirming

bank, if any, and the issuing bank shall each have a
maximum of five banking days following the day of
presentation to determine if a presentation is complying. This
period is not curtailed or otherwise affected by the occurrence
on or after the date of presentation of any expiry date or last
day for presentation.”

„ CHANGED FROM UCP 500 – REASONABLE TIME

AND 7 DAYS

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 Payment When?
„ Article 15 (a):

– “When an issuing bank determines that a presentation is

complying, it must honour.”

„ Honour – Article 2 (a): “to pay at sight if the credit is

available by sight payment.”

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 Mythical Discrepancies - Addresses
„ 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.”

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 Mythical Discrepancies - Addresses
„ Article 14 (j):

– “Contact details (telefax, telephone, email and the like) stated

as part of the beneficiary’s and the applicant’s address will be
disregarded.”

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 Mythical Discrepancies - Addresses
„ Article 14 (j):

– “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.”

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 Mythical Discrepancies - Inconsistency
„ 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.”

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 UCP 600
„ All quoted material comes from the final draft version
of the ICC Uniform Customs and Practice for
Documentary Credits “UCP 600”
„ The “UCP 600” is copyright ICC Publishing.
„ Reproduction in any manner is strictly prohibited.
„ The UCP 600 and important related materials may be
purchased at:
www.iccbooksusa.com
Telephone: 212-703-5066 Fax: 212-944-0012
E-mail: iccbooks@uscib.org

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Questions
&
Answers
 Thank You For Participating
For a copy of UCP 600 email your complete name and
address to:

Pauline.Wert@nationalcity.com

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 Company Profile
National City is one of the
nation’s largest financial
holding companies.

We operate through an
extensive distribution
network and serve
customers in selected
markets nationally.

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