LC-seminar359

8/7/2019 LC-seminar359

1/20

UCP 600

A Corporate Perspective on the Changesto the UCP - Things you Need to Know

Presenter - Donald R. Smith, Norman [email protected]


2/20

2

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 anyother 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


3/20

3

MAJOR CHANGES

4 Position Papers of September 1994 not effective for

UCP 600 as they were written specifically for the UCP500 and the principles contained therein have beenincorporated.

ICC Decision on Originals the major points wereincorporated into UCP 600 Article 17 in principle andthe full Decision will be an annex to the revised ISBP.


4/20

4

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 otherways within the text of the revision.


5/20

5

UCP 600

All quoted material comes from the final draft version

of the ICC Uniform Customs and Practice forDocumentary 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 bepurchased at:

www.iccbooksusa.com

Telephone: 212-703-5066 Fax: 212-944-0012

E-mail: [email protected]


6/20

6

Definitions

Article 2 New Article Important Definitions:

Among the most important are:

Honour

Negotiation


7/20

7

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 byacceptance.

HONOUR IS NOT ACCOMPLISHED FOR A TIMECREDIT UNTIL PAYMENT IS MADE AT MATURITY.


8/20

8

Definitions


Negotiation means the purchase by the nominated bankof 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 onor before the banking day on which reimbursement is due tothe nominated bank.

IN UCP 500, NEGOTIATION WAS DEFINED ASGIVING VALUE.


9/20

9

Negotiation

Article 12 (c):

Receipt or examination and forwarding of documents by anominated bank that is not a confirming bank does not makethat nominated bank liable to honour or negotiate, nor does it

constitute honour or negotiation.

NEGOTIATION MEANS PURCHASE UNDER UCP600


10/20

10

Standard for Examination

Article 14 (b):

A nominated bank acting on its nomination, a confirmingbank, if any, and the issuing bank shall each have amaximum of five banking days following the day of

presentation to determine if a presentation is complying. Thisperiod is not curtailed or otherwise affected by the occurrenceon or after the date of presentation of any expiry date or lastday for presentation.

CHANGED FROM UCP 500 REASONABLE TIMEAND 7 DAYS


11/20

11

Payment When?

Article 15 (a):

When an issuing bank determines that a presentation iscomplying, it must honour.

Honour Article 2 (a): to pay at sight if the credit isavailable by sight payment.


12/20

12

Mythical Discrepancies - Addresses

Article 14 (j):

When the addresses of the beneficiary and the applicantappear in any stipulated document, they need not be thesame as those stated in the credit or in any other stipulated

document, but must be within the same country as therespective addresses mentioned in the credit.


13/20

13


Article 14 (j):

Contact details (telefax, telephone, email and the like) statedas part of the beneficiarys and the applicants address will bedisregarded.


14/20

14


Article 14 (j):

However, when the address and contact details of theapplicant appear as part of the consignee or notify partydetails on a transport document subject to articles 19, 20, 21,

22, 23, 24 or 25, they must be as stated in the credit.


15/20

15

Mythical Discrepancies - Inconsistency

Article 14 (d):

Data in a document, when read in context with the credit, thedocument 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.


16/20

16

UCP 600

All quoted material comes from the final draft version

of the ICC Uniform Customs and Practice forDocumentary 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 bepurchased at:

www.iccbooksusa.com

Telephone: 212-703-5066 Fax: 212-944-0012

E-mail: [email protected]


17/20

Questions&

Answers


18/20

18

Thank You For Participating

For a copy of UCP 600 email your complete name and

address to:

[email protected]


19/20

19

Other National City Global Trade Institute Programs

Inside Trade Finance Seminar

Full Day Trade Finance Basics

Fifteen Locations Throughout Midwest

China: Threat or Opportunity Seminar

Half-day program

Eight Locations Throughout Midwest

Synchronizing the Global Supply Chain Webinar

60 minute Overview of the GSC and Impacts on Trade

Offered September 20, 2007

More Information and registration at: www.nationalcityseminars.com/


20/20

20

National City is one of the

nations largest financial

holding companies.

We operate through an

extensive distribution

network and servecustomers in selected

markets nationally.

Company Profile

LC-seminar359

Documents

Transcript of LC-seminar359