ucpdc simplified

1. UCPDC 600
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understand the logic

2. Article 1
• Will apply to any documentary credit
("credit") (including any standby letter
of credit) when the text of the credit
expressly indicates that it is subject to
these rules.
• They are binding on all parties thereto
unless expressly modified or excluded by
the credit.

3. DEFINITIONS
• Advising Bank means the bank that advised
the credit at the request of the issuing bank.
• Applicant means the party on whose request
the credit is issued.
• Banking day means a day on which a bank
is regularly open at the place at which an
act subject to these rule is to be performed.
• Beneficiary means the party in whose
favour a credit is issued.

4. DEFINITIONS
• 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.
• Confirmation means a definite undertaking of the
confirming bank, in addition to that of the issuing
bank, to honour or negotiate a complying
presentation.

5. DEFINITIONS
• Confirming bank means the bank that adds
its confirmation to a credit upon the issuing
bank’s authorization or request.
• Credit means any arrangement, however
named or described, that is irrevocable and
thereby constitutes a definite undertaking of
the issuing bank to honour a complying
presentation.

6. DEFINITIONS
• Issuing bank means the bank that issues a credit at the
request of an applicant or on its own behalf.
• Nominated bank means the bank with which the credit is
available or any bank in the case of a credit available with
any bank.
• Presentation means either the delivery of documents under
a credit to the issuing bank or nominated bank or the
documents so delivered.
• Presenter means a beneficiary, bank or other party that
makes a presentation.

7. 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.

8. INTERPRETATIONS
• When used to determine a period of shipment the
words “before” and “after”exclude the date
mentioned.
• The words “to”,”until”,”till”,”from” and
“between” include the date mentioned.
• For maturity date the words “from” and “after”
exclude the date mentioned.
• For determining period of shipment,the
words”from” include the date and “after” excludes
the date mentioned.

9. Article 4-Credits v. Contracts
• A credit is a separate transaction from
the sale or other contract on which it
may be based.
• An issuing bank should discourage
attempt to include, as an integral part
of the credit, copies of the underlying
contract, proforma invoice etc.

10. ARTICLE 5-Documents v. Goods,
Services or Performance
• Banks deal with documents and not with
goods, services or performance to which the
documents may relate.

11. Article 6
• A credit must state the bank with which it is
available or whether it is available with any
bank.
• A credit available with a nominated bank is also
available with the issuing bank.
• A credit must state whether it is available by
sight payment, deferred payment, acceptance or
negotiation.
• A credit must not be issued available by a draft
drawn on the applicant.

12. Article 6
• A credit must state an expiry date for
presentation.
• The place of the bank with which the credit is
available is the place for presentation.
• A place for presentation other than that of the
issuing bank is in addition to the place of the
issuing bank.
• A presentation by or on behalf of the
beneficiary must be made on or before the
expiry date.

13. Article 7-Issuing Bank’s
Undertaking
• An issuing bank is irrevocably bound to
honour a complying presentation whether
nominated bank honours or not.
• An issuing bank’s undertaking to reimburse
a nominated bank is independent of issuing
bank’s undertaking to beneficiary.

14. Article 8-Confirming bank’s
undertaking
• A confirming bank’s undertaking to
reimburse a nominated bank is independent
of issuing bank’s undertaking to
beneficiary.
• Nominated bank may prefer not to add
confirmation but communicate to the
issuing bank without delay.

15. Article 9-Advising Credits and
Amendments
• Advising bank advises without any
commitment on its part.
• Advising constitutes apparent authenticity of
L/C. (Applicable to II advising bank too).
• When not willing to advise should inform
without delay.
• If authenticity could not be verified should
state to beneficiary and take up with issuing
bank

16. Article 10-Amendments
• Should be with consent of issuing bank, confirming
bank and beneficiary.
• Confirming bank if not agreeable to amendment should
inform without delay.
• Beneficiary should confirm acceptance/rejection.
Presentation complying will be construed as
acceptance.
• Partial acceptance not acceptable.
• Time frame in L/C for acceptance can be ignored.

17. Article 11-Preadvice
• When authenticated tele transmission
received mail confirmation will be
disregarded and vice versa.
• When authenticated message to follow
issuing bank should send without delay.
• When pre advice is issued issuing bank is
committed to issue authenticated message.

18. Article 12 Nomination
• If nominated bank is not confirming bank it
is not bound to honour or negoatiate but
should so inform issuing bank without
delay.
• By nominating issuing bank authorises
nominated bank to negotiate.
• Forwarding documents by nominated bank
does not make it liable to negoatiate.

19. Article 13-Bank to bank
reimbursement
• When reimbursement is specified L/C should
state it is under URR 525.
• Issuing bank should provide reimbursement
authority without expiry.
• Compliance certificate is not necessary.
• Issuing bank is responsible for interest/charges
if reimbursing bank does not reimburse on I
demand.
• Charges are for issuing bank if L/C is silent.

20. Article 14- Standard examination
• 5 banking days following day of presentation.
Expiry does not curtail this time.
• Data in document should not be inconsistent with
that of L/C.
• Description of goods may not be identical but
should correspond.
• If not mentioned any document issued is
acceptable. If not required by credit return
document.

21. Article 14- Standard examination
• Compliance without document condition may
be ignored.
• Documents may be dated prior to credit but
not later than date of presentation.
• Address of beneficiary & applicant need not be
identical but be in same country.
• Consignor/shipper need not be beneficiary.
• Transport document may be issued by anybody
other than owner/carrier.

22. Article 15-complying presentation
• When documents are presented
complying with the terms of L/C
• Issuing bank and confirming bank
should honour and
• Nominated bank should forward the
documents.

23. Article 16-Discrepent Documents
• If not complying issuing bank/confirming
bank can refuse to honour.
• Issuing bank may seek waiver but does not
extend ‘5’ days.
• Single notice of dishonour should be given.

24. Article 16-Discrepent Documents
• Should list discrepancies, holding or
returning or acting according to previous
instructions.
• Should be given through expeditious
means.
• If notice is not given issuing bank can not
claim it later. It is entitled to refund of
reimbursement on refusal.

25. Article 17-original documents
• One original should be presented.
• Will be considered original if not
specifically mentioned as not original and
by apparent authenticity.
• When copies are stipulated either originals
or copies are acceptable.
• Two fold or more will be satisfied with one
original and rest copies.

26. Article 18-Commercial Invoice
• Should apparently appear to have been
issued by beneficiary.
• In the name of the applicant.
• In the same currency of credit.
• Need not be signed.
• Invoice in excess value may be permitted at
the discretion if honour is not for more than
L/C amount. Binding on all parties.

27. Articles 19, 20, 21 & 22
• Signed by carrier/representative indicating
date of despatch/shipped/place/discharge/
intended vessal/not subject to charter
party/terms of carriage/transhipment.
• Transhipment permitted even if L/C prohibits
the same. If carrier reserves the right it may be
ignored.
• Charter party contract need not be looked into.

28. Article 23, 24 and 25
• 23: A/W bill: signature/accepatance for
carriage/date of issuance /departure/
destination/terms and transhipment.
• 24: Railways: Any duplicate will be
construed as original.
• 25: Courier/Post: name/signature/
Place of despatch/courier charges notation.
Date of receipt will be date of shipment.

29. Article 26- on deck-shippers load and
count-said by shipper to contain
• Transport document should not indicate that
goods will be loaded on deck. A clause that
goods may be loaded on deck is acceptable.
• Shippers load and count, said to contain are
acceptable.
• Transport document may bear a reference to
charges additional to freight.

30. Article 27-Clean Transport
Document
• Bank will accept only clean transport
document.
• It is one not indicating any defective
condition of goods or packaging.
• The word clean need not appear on the
document.

31. Article 27-Insurance Documents
• Should signed by Co/agent and in full set.
• Cover note not acceptable
• Document later than shipment not
acceptable. (if cover not available).
• Currency of policy and L/C should be same.
• Coverage if not specified should be for
110%.

32. Article 27-Insurance Documents
• If CIF/CIP can not be ascertained insurance
value may be based on negotiated value or
gross value of invoice whichever is more.
• Risk should be between shipment & discharge.
• Risk to be specified. Notations like all or
customary or usual will disregard any exclusion
clause.

33. Article 29- Extension of Expiry Date
• If the bank is closed on expiry day the
following banking day will be the expiry
day.
• The latest date of shipment will however be
not extended for this purpose.
• Nominated bank should certify in the
covering schedule that presentation was
within time limit.

34. Article 30-Tolerance in credit
amount
• About or approximately for quantity or unit
price- > or < 10%.
• When not mentioned > or < 5% is allowed if no
of packets are not mentioned.
• When partial shipment is allowed tolerance is >
or < 5%.
• In all cases should not exceed value of credit.

35. Article 31-Partial shipment/drawings
• Same means of conveyance-same journey-same
destination-different dates-different ports of
loading and discharge- not partial shipment. Latest
date of shipment will be date of shipment.
• More than one means of conveyance – partial
shipment even if conveyance leave same day.
• More than one courier receipt for same destination
from same place booked on same day will not
constitute partial shipment.

36. Article 32 and 33
32 Instalment drawings /shipments:
When credit stipulates instalment
drawings/shipment and if and when one
instalment fails the entire credit ceases.
33 Hours of Presentation:
Bank has no obligation to accept presentation
outside banking hours

37. ARTICLE 34- DISCLAIMER
• A Bank assumes no liability or
responsibility on the effectiveness of the
documents such as sufficiency, accuracy or
genuineness.

38. Article 35 Disclaimer on
transmission and translation
• Banks assumes no responsibility for
transmission mutilation in its choice of
transmission.
• When complying documents negotiated or not,
are lost in transit, issuing bank or confirming
bank should honour.
• Banks have no responsibility for errors in
translation and interpretation of technical
terms.
• May transmit without translating.

39. Article 36-Force Majeure
• Bank assumes no responsibility for
consequences of interruption because
of acts of God, riots, civil commotions,
insurrections, wars, acts of terrorism,
strikes lockouts etc.
• Upon resumption honour or negotiate.

40. Article 37- Disclaimer
• Bank utilising services of another bank for appilcant’s
instruction will be at his risk.
• Not responsible if not carried out.
• Instructing bank liable for charges of instructed bank.
• Even if charges are a/c of beneficiary, issuing bank
liable to pay.
• L/C/Amendment should not say charges only on
acceptance.
• Applicant indemnifies issuing bank for foreign laws.

41. Article 38 Transferable Credits
• a. A bank is under no obligation to transfer a credit
except to the extent and in the manner expressly
consented to by that bank.
• b. For the purpose of this article:
• Transferable credit means a credit that specifically
states it is “transferable” and
• that may be made available in whole or in part to
another beneficiary (“second beneficiary”) at the
request of the beneficiary (“first beneficiary”).

42. Article 38 Transferable Credits
• c. Unless otherwise agreed at the time of
transfer, all charges (such as commissions, fees,
costs or expenses) incurred in respect of a
transfer must be paid by the first beneficiary.
• d. A credit may be transferred in part to more
than one second beneficiary provided partial
drawings or shipments are allowed.

43. Article 38 Transferable Credits
• d. A transferred credit cannot be transferred
at the request of a second beneficiary to any
subsequent beneficiary.
• e. Any request for transfer must indicate if
and under what conditions amendments
may be advised to the second beneficiary.
• The transferred credit must clearly indicate
those conditions.

44. Article 38-Transferable Credit
• F. rejection by one II beneficiary does not
• Invalidate acceptance by other II
beneficiary.
• It will remain unamended for rejector and
amended for acceptor.

45. Article 38 Transferable Credits
• g. The transferred credit must accurately reflect the
terms and conditions of the credit, including
confirmation, if any, with the exception of:
• - the amount of the credit,
• - any unit price stated therein,
• - the expiry date,
• - the period for presentation, or
• - the latest shipment date or given period for shipment,
• any or all of which may be reduced or curtailed.
• The percentage for which insurance cover must be
effected may be increased to provide the amount of
cover stipulated in the credit or these articles.

46. Article 38 g) Transferable Credits
• The name of the first beneficiary may be
substituted for that of the applicant in the
credit,
• but if the name of the applicant is
specifically required by the credit to appear
in any document other than the invoice,
such requirement must be fulfilled.

47. Article 38 Transferable Credits
• h. The first beneficiary has the right to
substitute its own invoice and draft, if any,
for those of a second beneficiary for an
amount not in excess of that stipulated in
the credit, and upon such substitution
• the first beneficiary can draw under the
credit for the difference, if any, between its
invoice and the invoice of a second
beneficiary.

48. Article 38 I Transferable Credits
• If the first beneficiary is to present its own invoice
and draft, if any, but fails to do so on first demand,
or if the invoices presented by the first beneficiary
create discrepancies that did not exist in the
presentation made by the second beneficiary and the
first beneficiary fails to correct them on first
demand, the transferring bank has the right to
present the documents as received from the second
beneficiary to the issuing bank, without further
responsibility to the first beneficiary.

49. Article 38 Transferable Credits
• j. The first beneficiary may, in its request
for transfer, indicate that honour or
negotiation is to be effected to a second
beneficiary at the place to which the credit
has been transferred, up to and including
the expiry date of the credit.
• This is without prejudice to the right of the
first beneficiary in accordance with sub-
article 38 (h).

50. Article 38 Transferable Credits
• k. Presentation of documents
by or on behalf of a second
beneficiary must be made to
the transferring bank.

51. Article 39-Assignment of Proceeds
• Even if a credit does not state it is
transferable the beneficiary can assign
proceeds and it will be entitled under the
credit and according to law.
• This is only for assignment of proceeds and
not for assignment of performance under
the terms of the credit.