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it contains two undertakings: one is to the beneficiary, the other to the
nominated bank. The two are independent of each other.
Advising bank has an obligation to accurately advise the terms and
conditions of the credit received
This is the result of standard letter of credit practice, and it is consistent
with sub-rule 2.05(a) (ii) of ISP98 and 5-107(c) of the revised UCC.
The nominated bank is allowed to prepay or purchase its promised
undertaking
UCP600 adds a stipulation that,
“a nomination by an issuing bank for a
nominated bank to accept a draft or incur a deferred payment undertaking
includes an authorization for the nominated bank to prepay or purchase a
draft accepted or a deferred payment undertaking incurred by the nominated
bank.”
Such wording was added to clarify the obstruction brought by the
cases in relation to the discounting before maturity. With this revision,
the controversial issue regarding the nominated bank’s prepayment under
acceptance or deferred payment credit is settled under UCP600.
Different addresses of beneficiary and applicant are allowed unless
they are part of consignee information in bills of lading
The use of different addresses for the beneficiary and the applicant has
always been used by the banks as a reason for refusal, although it does not
affect the underlying transaction and the identification of the beneficiary
and the applicant. ICC discourages using such a “minimal” discrepancy as
the basis for refusal, but there are two exceptions mentioned in UCP600.
The first is the indication of a different country from that of the credit, and
the other is indication of different addresses in the consignee or “notify
party” fields on bills of lading. Another point that merits attention is that if
the credit specifically requires indication in a document of the beneficiary
or applicant’s address as stipulated in the credit, the address shown in that
document should be the same as that on the credit.
The requirement for “reasonable time” is replaced with a fixed
period of five banking days
Under UCP500, when the credit lacks agreement both in express
terms and implied terms for determination of the time of refusal, the