UCP 600 is the International Chamber of Commerce rules commonly incorporated into documentary credits, including commercial letters of credit. The rules apply when the credit expressly states that it is subject to UCP 600.
What does UCP 600 address?
- Roles and responsibilities of banks
- Standards for document examination
- Presentation and expiry
- Complying presentations and discrepancies
- Transport, insurance and commercial documents
- Transfer and assignment provisions
Does UCP 600 govern the sales contract?
No. A documentary credit is separate from the underlying sale. Banks examine documents rather than the actual goods or performance.
What is a complying presentation?
It is a presentation that complies with the credit terms, UCP 600 and applicable international standard banking practice. Small document inconsistencies can still create discrepancies.
How long do banks have to examine documents?
UCP 600 provides a maximum of five banking days following the day of presentation for a nominated bank, confirming bank or issuing bank to determine compliance.
What should parties do before shipment?
Review the credit for workable dates, documents and wording; request amendments early; and align shipping, insurance and invoice records with the requirements.
