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Uniform Customs and Practice for Documentary Credits
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The techniques and methods for handling letters of credit in
international trade finance were standardized by the International Chamber
of Commerce (hereinafter referred to as the “ICC”) by publishing the
Uniform Customs and Practice for Documentary Credits (hereinafter
referred to as the “UCP”) in 1933. The ICC has developed the UCP by
regular revisions, the current version being the UCP600. The result is the
most successful international attempt at unifying rules ever, as the UCP
has a substantially universal effect. The latest revision, called the UCP600,
formally commenced on 1 July 2007, and it is the sixth revision of the
rules since they were first promulgated in 1933.
UCP600 does not automatically apply to a credit if the credit is silent
as to which set of rules it is subject to.
Below you will find a basic comparison which focuses on some major
points of divergence between UCP500 and UCP600.
Major Changes
Six articles of UCP500 have been removed:
Art.– 5 – Instructions to Issue/Amend Credits; Art.– 6 – Revocable
vs Irrevocable Credits; Art.– 8 – Revocation of a Credit; Art.– 12 –
Incomplete or Unclear Instructions, Art. – 30 – Freight Forwarders
Transport Documents; Art. – 38 – Other documents.
Several Articles merged:
The content of UCP500 articles 2, 6, 9, 10, 20, 21, 22, 30, 31, 33, 35,
36, 46 & 47 were merged or dealt with in other ways within the text of the
revision.
The new definition: “honor”
UCP500 has no specific definitions section, while UCP600 has.
However, some definitions like Advising Bank, Applicant, Beneficiary,
and Issuing Bank have the same meaning as in UCP500. There are
new definitions such as “honor” and “negotiation”. The definition only
introduces a new word “honor” and demonstrates what kinds of payment
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Article of November 2010