Letters of Credit - UCP 600 For Importers
Letters of Credit - UCP 600 For Importers
Letters of Credit - UCP 600 For Importers
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Remains, to date, the most successful set of private rules for trade ever developed.
UCP 600 Sixth (6th) revision since its inception by the International Chamber of Commerce in 1933
Included review - ICC Opinions, Decisions, DOCDEX cases, legal decisions, URR525, ISP98 and eUCP
*Seven Articles that have lead to nearly 60% of ICC Opinions are: - Article 9 - Article 13 - Article 14 - Article 21 - Article 23 - Article 37 - Article 48 Liability of Issuing and Confirming Banks Standard for Examination of Documents Discrepant Documents and Notice Unspecified Issuers of Contents of Documents Marine/Ocean Bills of Lading Commercial Invoices Transferable Credits
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Independent Independent
New:
Article 2 Article 3 Article 9 Definitions Interpretations Advising of Credits & Amendments Article 12 Nomination Article 15 Complying Presentation Article 17 Original Documents & Copies
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
v. UCP 500
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Use of telex or letter: This credit is subject to the Uniform Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication No. 600. This credit is subject to UCP 600
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Contrary to article 32 of the UCP, this credit remains valid for subsequent installments despite any shipment or drawing not made within the period allowed.
Documents must not be dated earlier than the date of the issuance of this credit.
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Article 2 Definitions (UCP 500 - Part of Art. 2, 7, 9, & 10) Certain terms are defined, so that they provide references when such terms are used in the articles
A Advising bank Applicant B Banking day Beneficiary C Complying presentation Confirmation Confirming bank Credit
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H I N
Presentation Presenter
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 the nominated bank.
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Nominated Bank
Nominated Bank
Nominated Bank
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Article 3 Interpretations
NEW
A credit is irrevocable even if no indication to that effect. For determining maturity date, the words from and after exclude the date mentioned (ISBP 45,d)
NEW
16
= =
17
Banks should discourage any attempt to include contract as integral part of L/C L/C
Discouraged ??
Contract No.123
Details as per Contract No.123, which is appended and forms an integral part of the credit.
18
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)
19
Place for presentation 1. 2. Any bank Issuing bank 1. 2. Bank XYZ Issuing bank
20
NEW
21
Disregard any provision that the amendment shall be in force unless NEW rejected by beneficiary within certain time
Presentation that complies with the credit and not yet accepted amendment deemed to be beneficiarys acceptance of the amendment
22
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/C Available with Citibank N.A. by deferred payment at 90 days after date of shipment
Citibank N.A. is authorized to : 1. Incur a Deferred Payment Undertaking (DPU); and 2. Prepay its DPU (ie early payment before maturity)
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24
What is reasonable ?
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Data Not Conflicting Data in a document must not conflict with data in that document, other stipulated documents or the L/C
26
27
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 in transport document, applicants contact details must be as stated in the credit
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NEW
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
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30
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 The bank is returning the documents
NEW
The bank is acting in accordance with instructions previously received from the presenter
31
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
Issued by beneficiary, made out in the name of applicant, and need not be signed (except as provided in
article 38 Transferable L/C)
NEW
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UCP 600
19 Transport Document Covering At Least Two Different Modes of Transport Bill of Lading Non-Negotiable Sea Waybill Charter Party Bill of Lading Air Transport Document Road, Rail or Inland Waterway Transport Documents Courier Receipt, Post Receipt or Certificate of Posting
UCP 500
26 Multimodal Transport Document
20 21 22 23 24 25
23 24 25 27 28 29
Marine/Ocean Bill of Lading Non-Negotiable Sea Waybill Charter Party Bill of Lading Air Transport Document Road, Rail or Inland Waterway Transport Documents Courier and Post Receipts
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New SWIFT 700 fields for transport details: 44A 44E 44F 44B Place of Taking in Charge/ Dispatch from / Place of Receipt Port of Loading/ Airport of Departure Port of Discharge/ Airport of Destination Place of Final Destination/ For Transportation to / Place of Delivery
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600 500
600 500
For Master
For Master,
Takashi Yanagawa
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Master
600 500
If signed by agent, need to specify for whom, carrier or master - it is signed ABC Forwarders 600 As Agent 500
For Master
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
38
39
NEW
40
Specific notation of actual date of shipment, even not called for in the credit, will be deemed to be the date of shipment
41
If it does not identify the carrier, any signature or stamp of railway company is accepted as being signed by the carrier (ISBP 172) 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
42
NEW
43
44
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
NEW
Risks covered at least : Place of taking in charge or shipment as stated in the L/C Place of discharge or final destination
45
46
B/L B
B/L C Port C
Take latest of the shipment dates as date of shipment (Aug 9 in the above example) (ISBP 89)
47
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)
Partial Shipment
Truck A Truck B Truck C AUG 1 AUG 1 AUG 1 AUG 1 AUG 1 AUG 1 Destination D A BB C = L/C quantity C A
48
Bank instructing another bank to perform services is liable for that banks charges Issuing bank is liable for charges that cannot be collected or deducted from the proceeds
49
Transferable credit An L/C may be made available by the transferring bank to a second beneficiary Applicant Applicant 1 First First Beneficiary Beneficiary 2 3 Second Second Beneficiary Beneficiary 4
Transferring Bank
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NEW
51
NEW
B C
Second beneficiarys documents First beneficiarys draft & invoice Documents after substitution
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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 26 On Deck, Shippers Load and Count, Said by Shipper to Contain and Charges Additional to Freight
(UCP 500 Art. 31,i,ii and Art. 33,d)
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Any Questions?
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