UCP – 600 UCPDC

UCPDC or UCP 600  refers to The Uniform Customs and Practice for Documentary Credits which  is basically a set of rules published by the International Chamber of Commerce, Paris on 1st July, 2007, which apply to finance institutions which issue Letters of Credit – financial instruments helping companies finance trade.

It is a set of 39 articles  on issuing and using Letters of Credit, which applies to 175 countries around the world, constituting some $1tn USD of trade per year.

These rules were formulated with an objective to create a set of contractual rules that would establish uniformity in that practice, obtain global understanding, a common interpretation and application of documentary credit, so that practitioners would not have to cope with plenty of conflicting national regulations.

SUMMARY OF THE ARTICLES IN UCP 600

It comprises of 39 articles to cover the following:

Articles 1 – 3 – Application, Definition & Interpretation

Articles 4 – 6 – Characteristics of LC

Articles 7 – 13 – Liabilities and Responsibilities

Articles 14 – 17 – Presentation & Examination of Documents

Articles 18 – 28 – Documents

Articles 29 – 33 – Miscellaneous Provisions

Articles 34 – 37 – Disclaimers

Articles 38 – 39 – Transferable Credit & Assignment

FEATURES OF UCP – 600

  • The UCP 600 are only applicable if they are expressly incorporated (and there is provision for including them at field 40E in the SWIFT MT700)
  • If provisions of LC and UCPDC are contradictory , provisions of LC will prevail.
  • The first UCP was created in 1933 and has been revised by the ICC up to the point of the UCP 600.
  • The UCP 600 rules are voluntarily incorporated into contracts and have to be specifically outlined in trade finance contracts in order to apply.

Accounting & Finance for Banking

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Accounting and Finance for Banking Module A Pdf

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Accounting and finance for bankers all ePDFs are available in our an app. Get them all at https://iibf.info/app

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