Documentary Credit 2007 revision UCP 600

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Documentary Documentary Credit Credit 2007 2007 revision revision 

정용혁 11. July . 200 2009 

UCP UCP 600 600 

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Effective July 1, 2007 

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UCP 600 – General Provisions and Definitions 

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Article 1 – Application of UCP 

� UCP 600 are rules 

� Expressly indicates in the credit 

� Applicable also to standby credit 

�� Binding on all parties unless expressly modified or 

excluded 

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Examples of express indication: UCP 600 1 

Use of SWIFT: 

40E: Applicable Rules 

UCP LATEST VERSION 

Use of telex or letter: 

This credit is subject to the Uniform Customs and Practice 

for Documentary Credits Credits, 2007 Revision, evision, ICC Publication 

No. 600. 

This credit is subject to UCP 600 

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Examples of an exclusion or modification to a rule: 

Contrary to article 32 of the UCP, th this is credit remains remain 

valid for subsequent instal installments ments despite any shipment 

or drawing not made within the period allowed. 

Sub Sub-Article Article 28(c) does not apply. 

Documents must not be dated earlier than the date of 

the issuance of this credit. 

UCP 600 1 

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Article 2 – Definitions 

Certain terms are defined, so that they provide references when 

such terms are used in the articles 

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 

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Banking Day UCP 600 2 

� Day on which a bank is regularly open for performance of an act 

subject to these rules 

SATURDAY 

Trade Dept. 

Banking Hall 

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Complying Presentation UCP 600 2 

� Presentation in accordance with 

� Terms & conditions of the credit 

� Applicable UCP provisions 

� International standard banking practice 

What is international standard 

banking practice ? 

Is it referring to the “ISBP” ? 

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Honour & Negotiation UCP 600 2 

� Honour 

For credit available by �� 

�� Sight payment 

�� Deferred payment 

�� Acceptance 

� Negotiation 

Pay at sight 

Incur deferred payment undertaking 

Pay at maturity 

Accept bill of exchange 

Pay at maturity 

� 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 the 

nominated bank. 

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Nominated Bank; Presentation; Presenter UCP 600 2 

� The bank with which the credit is available, or any bank in the case 

of a freely available credit 

� Presentation 

� Delivery of documents to issuing bank or nominated bank; or 

� The documents so delivered 

� Presenter 

� Party that makes a presentation 

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Article 3 – Interpretations 

�� Where applicable, words in the singular include the plural 

and vice versa. 

� No more “(s)” - “Document” instead of “Document(s)” 

�� A A credit credit is is irrevocable irrevocable even if no indication to that effect. 

�� For determining maturity date, the words “from” and “after” 

exclude the date mentioned 

= 

30 days from shipment date 30 days after shipment date 

Shipment date: 1 AUG 2007 Maturity date: 31 AUG 2007 

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Interpretations 

�A documents 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. 

�Branches of a bank in different countries are considered to be 

separate bank. 

�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. 


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Interpretations 

�Unless required to be used in a document, words such as “prompt”, 

“immediately” or “as soon as possible” will be disregarded. 

�Expression “on or about” or similar is a stipulation that an event is to 

occur five calendar days before until five calendar days after the 

specified date, both start and end dates included. 


�For �For determining shipment period: 

- words “to”, “until”, “till”, “from” and “between” include the date or dates 

mentioned. 

- words “before” and “after” exclude the date mentioned. 

- Terms “first half” and “second half of a month means the 1 st – 15 th and 

16 th – last day of the month, all dates inclusive. 

- Terms “beginning”, “middle” and “end” of a month means the 1 st – 10 th , 

the 11 th – 20 th and 21 st – last day of the month, all days inclusive. 

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Interpretations UCP 600 3 

� 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 effected 

Earliest shipment date 

from August 10th 

is August 10th 

Shipment to be effected 

after August 10th 

= 

Earliest shipment date 

is August 11th 

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Article 4 - Credits v. Contracts 

� 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 

Discouraged ?? 

Details as per Contract 

No.123, which is 

appended and forms an 

integral part of the credit. 

L/C 

Contract No.123 

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Article 5 - Documents v. Goods/Services/Performance 

� Banks deal with documents and not with goods, services or 

performances to which the documents may relate. 

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UCP 600 – Liabilities and Responsibilities 

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Article 6 - Availability, Expiry Date and Place for Presentation 

� L/C must � 

� State the bank with which it is available, or that it is available with 

any bank (available with a nominated bank also available with 

the issuing bank) 

� State that it is available by sight payment, deferred payment, 

acceptance or negotiation 

� Not be available by draft on applicant 

Examples: 

Available with issuing bank by deferred payment 

Available with Bank XYZ by payment 

Available with any bank by negotiation 

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Availability, Expiry Date & Place for Presentation 

� Expiry date 

� Last day for presentation of documents 

� 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. Any bank 

2. Issuing bank 

Place for presentation 

1. Bank XYZ 

2. Issuing bank 

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Article 7 – Issuing Bank Undertaking 

� Honour complying presentation made to nominated bank or to issuing 

bank itself 

� Reimburse nominated bank that has honoured/negotiated and forwarded 

complying documents to issuing bank 

�� Irrevocably bound as of the time L/C is issued 

� For usance L/C, reimbursement is due at maturity of deferred payment 

undertaking or acceptance, whether or not nominated bank prepaid 

or purchased before maturity 

� Issuing bank’s undertaking to reimburse nominated bank is 

independent of its undertaking to beneficiary 

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Article 8 – Confirming Bank Undertaking 

� Honour a complying presentation, or negotiate without recourse 

� Reimburse nominated bank that has honoured/negotiated and 

forwarded complying documents to confirming bank 

� Irrevocably bound as of the time of confirmation 

�� For usance L/C, reimbursement is due at maturity of deferred payment 

undertaking or acceptance, whether or not nominated bank 

prepaid or purchased before maturity 

� Confirming bank’s undertaking to reimburse nominated bank is 

independent of its undertaking to beneficiary 

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Article 9 - Advising of Credits and Amendments 

� 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 conditions 

� An advising bank may utilize the services of another bank to advise 

the credit - second advising bank 

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Article 10 – Amendments 

� Amendment must be agreed to by the issuing bank, confirming 

bank, if any, and the beneficiary 

� Issuing bank/Confirming bank is irrevocably bound as of time of 

issuance and advising of amendment 

�� Confirming bank must inform issuing bank of election not to 

extend confirmation to an amendment and may advise 

beneficiary of amendment without it’s confirmation 

� Notification of acceptance or rejection received should be given 

by second advising bank to the advising and the advising bank 

to the issuing bank 

� Partial acceptance = Notice of rejection 

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Amendments 

� Disregard any provision that the amendment shall be in 

force unless rejected by beneficiary within certain time 

Disregard 

Silence = Consent 

Amendment No.1 

- Amount reduced by USD100,000.00 

This amendment shall be in force 

unless rejected by beneficiary on 

or before 30 Nov 2007. 


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Acceptance of Amendment by Performance 

� Presentation that complies with the credit and not yet accepted 

amendment – deemed to be beneficiary’s acceptance of the 

amendment 

Original L/C 

Date: 1 JUL 07 

US$150,000 

Ship by 20 AUG 7 

Partial shipments 

allowed 

Complying 

Amendment 

Date: 4 JUL 07 

Amt. reduced to 

US$100,000 

Ship by 20 JUL 07 

Complying 


Deemed 

accepted ? 

Document 

US$100,000 

Shipped 20 JUL 07 

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Article11 – Teletransmitted and Pre-Advised Credits and 

Amendments 

� Authenticated teletransmission of credit and amendment deemed 

to be operative, unless otherwise stated. 

� If teletransmission states “full details to follow” (or words of similar effect), 

issuing bank must then issue the operative credit or amendment in terms 

not inconsistent with the teletransmission 

� Preliminary advice of issuance of a credit or amendment obligates 

the issuing bank to issue the operative credit or amendment. 

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Article 12 – Nomination 

� Nomination does not obligate nominated bank to honour 

� 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 

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Article 13 – Bank to Bank Reimbursement Agreements 

� If a credit states that reimbursement is to be obtained from a reimbursing 

bank, it must state if the reimbursement is subject to the ICC rules for 

bank-to-bank reimbursements in effect on the date of issuance of the 

credit. 

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UCP 600 – Examination of Documents 

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Article 14 - Standard for Examination of Documents 

�� Must examine documents on their face to determine compliance 

�� Other than the commercial invoice, description of goods, services 

or performance 

performance, may be stated in general terms 

�� Disregard Disregard documents documents not required by L/C and may be returned 

�� Disregard non non-documentary documentary condition 

�� Documents may be dated prior to issuance date of LC, but not 

later than date of presentation 

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Reasonable Time 

� UCP 500: Reasonable time, not to exceed SEVEN banking days 

following the day of receipt of documents 

� UCP 600: Max. of FIVE banking days following day of presentation. 

Not curtailed or affected by other events. 

UCP 600 

UCP 500 


M Tu 

Tu W Th 

Th F Sa Sa S M Tu 

Tu W 

0 1 2 3 4 X X 5 

0 1 2 3 4 X X 5 6 7 

What is reasonable ? 

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Period for Presentation 

� 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 

Data in Documents 

� 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 

Inspection 

Certificate 

Goods have been 

inspected and are 

certified to be in 

order. 

Signed 

Dated 

Inspection 

Certificate 

Goods are 

certified to be of 

Singapore origin. 

Signed 


Goods have 

been inspected 

and are certified 

to be in order. 

Signed 

1 JUL 2009 

Dated 

1 JUL 2009 

Dated 

1 JUL 2009 

�� 

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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 

� However, if they form part of consignee and notify party details in 

transport document, applicant’s contact details must be as stated in 

the credit 

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Addresses of Beneficiary & Applicant 

Letter of Credit 

Applicant: ABC Inc. 

3 Temasek Avenue 

16-00 16 00 Centennial Tower 

Singapore 039190 

Fax No. 6328 5201 

B/L to notify applicant 

Bill of Lading 

Notify: ABC Inc. 

10 Coleman Street 


Fax No. 6328 5464 

�� 

Invoice 

Bill to: ABC Inc. 

10 Coleman Street 


Fax No. 6328 5464 


Notify: ABC Inc. 

3 Temasek Avenue 

16-00 16 00 Centennial Tower 


Fax No. 6328 5201 


�� 

�� 

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Shipper, Consignor, Transport Document Issuer 

� Shipper or consignor of goods indicated on any 

documents need not be the L/C beneficiary, but must 

be consistent among all documents 


Shipper: XYZ Co. Ltd. 

L/C 

Beneficiary: ABC Co. Ltd. 


�� 

Certificate of Origin Certificate of Origin 

Shipper: XYZ Co. Ltd. 

� 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 

Shipper: ABC Co. Ltd. 

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Article 15 – Complying Presentation 

When When …… 

Issuing bank determines 

a presentation is 

complying 

Confirming bank 

determines a presentation 

is complying 

Nominated bank 

determines a presentation 

is complying, and 

honours or negotiates 

It must honour 

and release documents to 

the applicant 

It must honour or 

negotiate and forward 

documents to issuing bank 

It must forward 

documents to confirming 

bank or issuing bank 

Without 

delay 

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Article 16 – Discrepant Documents, Waiver and Notice 

� Nominated/Confirming/Issuing bank may refuse to honour or 

negotiate discrepant documents 

� Issuing bank, in its sole judgment approach applicant for waiver 

�� Notice of refusal must be given no later than close of the fifth 

banking day following day of presentation 

� Failing to act in accordance with this article precludes the bank from 

claiming the presentation does not comply 

� After providing notice of refusal 

� The bank may return documents to presenter at any time 

� Issuing bank or confirming bank may claim refund for any 

reimbursement made, with interest 

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NEW 

NEW 

Discrepant Documents, Waiver and Notice 

� 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 

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Important Timelines (UCP 600 – 14,15,16) 

� Document Examination: 

� Max. 5 banking days following the day of presentation 

� Complying Presentation: 

� When an issuing bank determines that a presentation is complying, it 

must honour 

� Refusal: 

� Notice of refusal by the close of the fifth banking day following the 

day of presentation 

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Article 17 – Original Documents and Copies 

�� At least one original must be presented 

�� Original Document = apparent original signature, mark, stamp or 

label of issuer of the document 

�� Also an Original = written, typed, perforated or stamped by the 

document issuer’s hand; or 

on original stationery; or 

states that it is original 

�� L/C requires copies of documents, either originals or copies is 

acceptable 

�� Documents “in duplicate”, “in two fold” or “in two copies”, 

presentation of at least one original and remaining number in 

copies is acceptable. 

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UCP 600 – Documents 

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Article 18 – Commercial Invoice 

� Issued by beneficiary, made out in the name of applicant, and 

need not be signed (except as provided in article 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 

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Commercial Invoice 

� Must be in the same currency as L/C 

L/C 

Currency & Amount: 

USD1,000,000.00 

Invoice No.123 

Invoice Amount: 

USD1,000,000.00 

(Equivalent to 

SGD1,560,000.00) 

Invoice No.456 

Invoice Amount: 

SGD1,560,000.00 

(Equivalent to 

USD1,000,000.00) 

�� 


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Article 19 – Transport Documents Covering at Least Two Different 

Modes of Transport 

� 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 

ABC Forwarders 

As Agent 

For For Master 

�� 


600 600 

�� 

As Agent 

500 500 

For For Master, 

Takashi Yanagawa 

�� 

�� 

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Transport Document Covering at Least 

Two Different Modes of Transport 

� Indicating goods have been dispatched, taken in charge 

or shipped on board: 

� by pre-printed wording – issuance date is the 

date of dispatch, taking in charge or shipped 

on board 

� by a dated notation indicating the date goods 

have been dispatched, taken in charge or 

shipped on board – this date is the date of 

shipment 

� Must indicate place of dispatch, taking in charge or 

shipment and place of final destination stated in the L/C, 

even if transport document: 

� states, in addition, different place of dispatch, taking in 

charge or shipment or place of final destination 

� contains indication “intended” or similar qualification in 

relation to vessel, port of loading or port of discharge 


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Changes to SWIFT MT700 

� New fields for transport details: 

44A Place of Taking in Charge/ Dispatch from …/ 

Place of Receipt 

44E Port of Loading/ Airport of Departure 

44F Port of Discharge/ Airport of Destination 

44B Place of Final Destination/ For Transportation to …/ 

Place of Delivery 

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Transport Document Covering at Least 

Two Different Modes of Transport 

� If issued in more than one original, all originals are required 

� Need not examine contents of Terms and Conditions of 

carriage 

� Must not indicate it is subject to a charter party (no 

mention of “vessel propelled by sail”) 

�� 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 destination – is transshipment 

� Transport document may indicate goods will or may be 

transshipped provided entire carriage is covered by 

one and the same transport document 

� Even prohibited by the L/C, transport document 

indicating transshipment will or may take place is 

acceptable 


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Article 20 – Bill of Lading 

Article 21 – Non-Negotiable Sea Waybill 


� Signed by carrier, master or named agent 

� If signed by master, name of master is not necessary 

Master 

600 �� 

500 �� 

� If signed by agent, need to specify for whom, 

carrier or master - it is signed 


As Agent 

For Master 

600 �� 

500 �� 


As Agent 


500 �� 

For Master, John Doe 

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Non-Negotiable Sea Waybill 

� Indicating goods have been shipped on board: 


date of shipment, or 

� by a dated on board notation – on board date 

is the date of shipment 

�� Port of loading in B/L differs from that stated in the L/C, or 

B/L contains “intended” qualification with regards to port of 

loading – “On Board Notation” is required, regardless of 

pre-printed “shipped” B/L is presented, indicating: 

� port of loading as in the L/C 

� date of shipment 

� name of vessel 

�If issued in more than one original, all originals are required 

UCP 600 20,21 

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Non-Negotiable Sea Waybill 

� Need not examine contents of Terms and Conditions of 

carriage 

� Must not indicate it is subject to a charter party (no 

mention of “vessel propelled by sail”) 

� Unloading from one vessel and reloading to another 

vessel during the carriage from port of loading to port of 

discharge - is transshipment 

� B/L may indicate goods will or may be transshipped 

provided entire carriage is covered by one and the 

same B/L 

� Even prohibited by the L/C, B/L indicating transshipment 

will or may take place is acceptable if goods have been 

shipped in a container, trailer or LASH barge 

� Disregard clauses in B/L carrier reserve the right to 

transship 

UCP 600 20,21 

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Article 22 – Charter Party Bill of Lading 

� 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 

Master, Owner or Charterer 600 �� 

� If signed by agent, need to specify for whom –master, 

owner or charterer - it is signed 

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Charter Party Bill of Lading 

� Agent signing for owner or charterer must indicate name 

of owner or charterer 


As Agent 


For Owner, John Doe 


As Agent 

For Master 


As Agent 


For Charterer, 

John Doe 



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Charter Party Bill of Lading 

� Indicating goods have been shipped on board: 


date of shipment, or 

� by a dated on board notation – on board date 

is the date of shipment 

�� Port of discharge may be shown as a range of ports, or 

geographical area, as stated in L/C 

� e.g. L/C calls for shipment to Asian ports 

�If issued in more than one original, all originals are required 

� Need not examine charter party contracts 

� No mention that the B/L must not indicate vessel 

propelled by sail only 


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Article 23 – Air Transport Document 


� 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 to 

be 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 of 

shipment 

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Air Transport Document 

� Shipment date not determined by any other information 

re flight number and date (in box marked “for carrier’s 

use only) 

� Be the original for consignor or shipper, even if credit 

stipulates full set of originals 

� Need not examine Terms and Conditions of carriage 

�� Unloading from one aircraft and reloading to another 

aircraft during the carriage from the airport of loading to 

the airport of destination – is transshipment 

� Even L/C prohibits transshipment, air transport 

document indicating goods will or may be transshipped 

is acceptable, provided entire carriage is covered by 

one and the same air transport document 


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Article 24 – Road, Rail or Inland Waterway 

Transport Documents 


� Signed by carrier or named agent 

� If signed by agent, need to indicate that agent has signed 

for or acted for or on behalf of carrier 

�� Must indicate date of issuance or date goods have been 

received for shipment, dispatch or carriage, which is the 

date of shipment, unless the transport document contains a 

dated reception stamp, an indication of date of receipt or a 

date of shipment 

� Indicate place of shipment and place of destination as per 

L/C 

� In the absence of indication as to the number of originals 

issued, the number presented deemed to be the full set 

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Road, Rail or Inland Waterway Transport Documents UCP 600 24 

� Unloading from one means of conveyance and reloading to 

another means of conveyance, within the same mode of 

transport, during the carriage from the place of shipment, 

dispatch or carriage to the place of destination – 

is transshipment 

� Transport document may indicate goods will or may be 

transshipped provided entire carriage is covered by one 

and the same transport document 

� Even prohibited by the L/C, transport document indicating 

transshipment will or may take place is acceptable 

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Road, Rail or Inland Waterway Transport Documents UCP 600 24 

� For rail transport document: 

� If it does not identify the carrier, any signature or stamp 

of railway company is accepted as being signed by the 

carrier 

� Transport document marked “duplicate” is accepted as 

an original 

�� Transport document will be accepted as original whether 

marked as an original or not (also applicable to inland 

waterway transport) 

� Road transport document marked for consignor or shipper 

or bear no marking for whom the document has been 

prepared – is the original 

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Article 25 – Courier Receipt, Post Receipt or 

Certificate of Posting 

� Courier receipt must appear to: 

� Indicate the name of courier service, and be stamped 

or signed by the named courier service at the place 

the goods are to be shipped 

�� Indicate a date of pick-up or receipt, which will be 

deemed to be the date of shipment 

� Requirement that courier charges to be paid or prepaid 

is satisfied by the courier receipt evidencing courier 

charges are for account of a party other than the 

consignee 

� Post receipt of certificate of posting, must appear to be 

stamped or signed and dated at the place the goods are to 

be shipped. This date will be deemed to be the date of 

shipment 

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Article 26 – “On Deck”, “Shipper’s Load and Count”, “Said by 

Shipper to Contain” and Charges Additional to Freight 

� Transport document indicating goods are or will be loaded 

on deck not acceptable 

�� Transport document indicating goods may be loaded 

on deck is acceptable 

� “Shipper’s Load and Count” and “said by shipper to contain” 

is acceptable 

� Transport document bearing reference to charges additional 

to freight is acceptable 

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Article 27 – Clean Transport Document 

� Clean transport is one bearing no clause or notation expressly 

declaring a defective condition of goods or their packaging 

� The word “clean” need not appear on a transport document, 

even credit requires “clean on board” 

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Article 28 – Insurance Document and Coverage) 

� 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. 

Agent for 


By proxy for 


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Insurance Document and Coverage UCP 600 28 

� 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 

Insurance Policy 

Policy 

Effective Date 

Effective Date 

1 AUG 2007 


Issued on 8 AUG 2007 



Lading 

Shipped On Board 

Shipped On Board 





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Insurance Document and Coverage UCP 600 28 

� Insurance coverage expressed in the L/C as percentage of 

goods/invoice value (e.g. 110% of CIF value) is deemed to be 

minimum coverage required 

L/C: Insurance required for 

110% of invoice value 

Min. coverage 

required 

Invoice: Total CIF value 

US$100,000 

Insurance Policy: 

Insured amount US$110,000 

Insured amount US$120,000 

Acceptable 

120 % 

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Insurance Document and Coverage 

� 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 

� Risks covered at least : 

Place of taking in charge or 

shipment 

� as stated in the L/C 

Place of discharge or final 

destination 


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Insurance Document and Coverage 

� 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) 


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UCP 600 – Miscellaneous Provisions 

65 

Article 29 – Extension of Expiry Date or Last Day for Presentation 

� Expiry date or last day for presentation falls on a day the bank is 

closed for reasons other than “Force Majeure”, it will be extended 

to the first following banking day 

�� Nominated bank must provide the issuing bank or confirming 

bank with a statement that presentation was made within the time 

limits extended 

� Latest date for shipment will not be extended 

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Article 30 – Tolerance in Credit Amount, Quantity and Unit Prices 

� Words “about” or “approximately” used in conjunction with credit 

amount, quantity or unit prices, are to be construed as allowing 

a tolerance not to exceed 10% more or 10% less 

�� Quantity not in terms of stipulated number of packing units or 

individual items has a tolerance not to exceed 5% more or 5% less, 

providing credit amount is not over drawn 

� Even when partial shipment is not allowed, a tolerance not to exceed 

5% less than the credit amount is allowed, provided the quantity 

is shipped in full and that any unit price is not reduced. 

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Article 31 – Partial Drawings or Shipments 

� 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 

Port A 

Port B 

B/L “A” AUG 1 

Port C 

B/L “B” AUG 7 

B/L “C” AUG 9 

• Same vessel and voyage 

• Same destination 

Port D 

A B C = L/C quantity 

� Take latest of the shipment dates as date of shipment (Aug 9 in 

the above example) 

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NEW 

Partial Drawings or Shipments 

� 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 

Truck A 

Truck B 

Truck C 

AUG 1 

AUG 1 

AUG 1 


Partial Shipment 

Destination 

D 

A B C = L/C quantity 

� Multiple courier receipts not regarded as partial shipment, if 

stamped/signed by same courier at same place & date and for same 

destination 

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Article 32 – Installment Drawings or Shipments 

� Any installment not drawn or shipped, credit ceases 

to be available 

Article 33 – Hours of Presentation 

� Banks have no obligation to accept presentation outside 

of its banking hours 

69

UCP 600 – Disclaimers 

70 

Article 34 – Disclaimer on Effectiveness of Documents 

� Banks are not liable or responsible for any fraudulent 

documents or the accuracy and representation of any documents. 

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71 

Article 35 – Disclaimer on Transmission and Translation 

� When act in accordance with instruction or on own initiative, 

banks are not liable or responsible for any loss in transit, 

mutilation or other errors arising in the transmission of any 

messages or delivery of letters or documents 

�� Complying documents lost in transit, between: 

� Nominated bank and issuing/confirming bank, or 

� Confirming bank and issuing bank 

Issuing/confirming bank must honour or negotiate, or reimburse 

� Banks are not obligated to translate and may transmit credit 

terms without translating them 

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Article 36 – Force Majeure 

� Bank will not honor or negotiate under a credit that expired 

during interruption of its business, which is not under 

it’s control 

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Article 37 – Disclaimer for Acts of an Instructed Party 

� Issuing bank or advising bank not liable or responsible for 

instructions not carried by another bank 

� Bank instructing another bank to perform services is liable 

for that bank’s charges 

� Issuing bank is liable for charges that cannot be collected 

or deducted from the proceeds 

� Applicant is bound by and liable to indemnify a bank against 

all obligations and responsibilities imposed by foreign 

laws and usages 

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Disclaimer for Acts of an Instructed Party 

� L/C or amendment should not stipulate that advising to beneficiary is 

conditional upon the receipt by advising bank or second advising bank 

of its charges 

Unacceptable clause: 

Notwithstanding sub sub-article article 37c, the advising 

bank must collect their advising fee prior to 

advising the credit to the beneficiary 


74

UCP 600 – Transferable LC & Assignment of Proceeds 

75 

Article 38 – Transferable Credits 

� Transferable credit – An L/C may be made available by the 

transferring bank to a second beneficiary 

Applicant 

Issuing 

Bank 

First 

Beneficiar Beneficiary 

Transferring 

Bank 

Second 

Beneficiary 

1 2 3 4 

1. L/C application 

2. Transferable credit 

3. Request for transfer 

4. Transferred credit – 

(May be the 

Issuing Bank) 

(Credit Credit has been made available 

to a second beneficiary) 

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Transferable Credits 

� 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) 


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� 38 (k): Second beneficiary’s documents must be presented to 

transferring bank 

B 

C 

Second beneficiary’s documents 

First beneficiary’s draft & invoice 

Documents after substitution 

A 


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� 38 (k): Second beneficiary’s documents must be presented to 

transferring bank 

� However, in case of Full Transfer, documents may be presented 

directly to issuing bank 

� Therefore the Transferred Credit should expressly exclude subarticle 

38 (k) 

Full Transfer 

(No substitution) 


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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 does 

not 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 coverage 

First 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 


79

UCP 600 – Transferable LC & Assignment of Proceeds 

80 

Article 39 – Assignment of Proceeds 

� Assignment of proceeds under the credit only. 

Not an assignment of right to perform under the credit. 

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THANK 

YOU 

81

Documentary Credit 2007 revision UCP 600

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