FOREWORD
This revision of
the Uniform Customs and Practice for Documentary Credits (commonly called
“UCP”) is the sixth revision of the rules since they were first promulgated in
1933. It is the fruit of more than three years of work by the International Chamber
of Commerce’s (ICC) Commission on Banking Technique and Practice.
ICC, which was
established in 1919, had as its primary objective facilitating the flow of
international trade at a time when nationalism and protectionism posed serious
threats to the world trading system. It was in that spirit that the UCP were
first introduced – to alleviate the confusion caused by individual countries’
promoting their own national rules on letter of credit practice. The objective,
since attained, was to create a set of contractual rules that would establish
uniformity in that practice, so that practitioners would not have to cope with
a plethora of often conflicting national regulations. The universal acceptance
of the UCP by practitioners in countries with widely divergent economic and
judicial systems is a testament to the rules’ success.
It is important
to recall that the UCP represent the work of a private international
organization, not a governmental body. Since its inception, ICC has insisted on
the central role of self-regulation in business practice. These rules,
formulated entirely by experts in the private sector, have validated that
approach. The UCP remain the most successful set of private rules for trade
ever developed.
A range of
individuals and groups contributed to the current revision, which is entitled
UCP 600. These include the UCP Drafting Group, which sifted through more than
5000 individual comments before arriving at this consensus text; the UCP
Consulting Group, consisting of members from more than 25 countries, which
served as the advisory body reacting to and proposing changes to the various
drafts; the more than 400 members of the ICC Commission on Banking Technique
and Practice who made pertinent suggestions for changes in the text; and ICC national
committees worldwide which took an active role in consolidating comments from
their members. ICC also expresses its gratitude to practitioners in the
transport and insurance industries, whose perceptive suggestions honed the
final draft.
Guy Sebban
Secretary General
International Chamber of
Commerce
INTRODUCTION
In May 2003, the
International Chamber of Commerce authorized the ICC Commission on Banking
Technique and Practice (Banking Commission) to begin a revision of the Uniform
Customs and Practice for Documentary Credits, ICC Publication 500.
As with other
revisions, the general objective was to address developments in the banking,
transport and insurance industries. Additionally, there was a need to look at
the language and style used in the UCP to remove wording that could lead to
inconsistent application and interpretation.
When work on the
revision started, a number of global surveys indicated that, because of
discrepancies, approximately 70% of documents presented under letters of credit
were being rejected on first presentation. This obviously had, and continues to
have, a negative effect on the letter of credit being seen as a means of
payment and, if unchecked, could have serious implications for maintaining or
increasing its market share as a recognized means of settlement in
international trade. The introduction by banks of a discrepancy fee has
highlighted the importance of this issue, especially when the underlying
discrepancies have been found to be dubious or unsound. Whilst the number of
cases involving litigation has not grown during the lifetime of UCP 500, the
introduction of the ICC’s Documentary Credit Dispute Resolution Expertise Rules
(DOCDEX) in October 1997 (subsequently revised in March 2002) has resulted in
more than 60 cases being decided.
To address these
and other concerns, the Banking Commission established a Drafting Group to
revise UCP 500. It was also decided to create a second group, known as the
Consulting Group, to review and advise on early drafts submitted by the
Drafting Group. The Consulting Group, made up of over 40 individuals from 26
countries, consisted of banking and transport industry experts. Ably co-chaired
by John Turnbull, Deputy General Manager, Sumitomo Mitsui Banking Corporation
Europe Ltd, London and Carlo Di Ninni, Adviser,
Italian Bankers Association, Rome
The Drafting
Group began the review process by analyzing the content of the official
Opinions issued by the Banking Commission under UCP 500. Some 500 Opinions were
reviewed to assess whether the issues involved warranted a change in, an
addition to or a deletion of any UCP article. In addition, consideration was
given to the content of the four Position Papers issued by the Commission in
September 1994, the two Decisions issued by the Commission (concerning the
introduction of the euro and the determination of what constituted an original
document under UCP 500 sub-article 20(b) and the decisions issued in DOCDEX
cases.
During the
revision process, notice was taken of the considerable work that had been
completed in creating the International Standard Banking Practice for the
Examination of Documents under Documentary Credits (ISBP), ICC Publication
645. This publication has evolved into a necessary companion to the UCP for
determining compliance of documents with the terms of letters of credit. It is
the expectation of the Drafting Group and the Banking Commission that the
application of the principles contained in the ISBP, including subsequent
revisions thereof, will continue during the time UCP 600 is in force. At the
time UCP 600 is implemented, there will be an updated version of the ISBP to
bring its contents in line with the substance and style of the new rules.
The four Position
Papers issued in September 1994 were issued subject to their application under
UCP 500; therefore, they will not be applicable under UCP 600. The essence of
the Decision covering the determination of an original document has been
incorporated into the text of UCP 600. The outcome of the DOCDEX cases were
invariably based on existing ICC Banking Commission Opinions and therefore
contained no specific issues that required addressing in these rules.
One of the
structural changes to the UCP is the introduction of articles covering
definitions (article 2) and interpretations (article 3). In providing
definitions of roles played by banks and the meaning of specific terms and
events, UCP 600 avoids the necessity of repetitive text to explain their
interpretation and application. Similarly, the article covering interpretations
aims to take the ambiguity out of vague or unclear language that appears in
letters of credit and to provide a definitive elucidation of other
characteristics of the UCP or the credit.
During the course
of the last three years, ICC national committees were canvassed on a range of
issues to determine their preferences on alternative texts submitted by the
Drafting Group. The results of this exercise and the considerable input from
national committees on individual items in the text is reflected in the content
of UCP 600. The Drafting Group considered, not only the current practice
relative to the documentary credit, but also tried to envisage the future
evolution of that practice.
This revision of
the UCP represents the culmination of over three years of extensive analysis,
review, debate and compromise amongst the various members of the Drafting
Group, the members of the Banking Commission and the respective ICC national
committees. Valuable comment has also been received from the ICC Commission on
Transport and Logistics, the Commission on Commercial Law and Practice and the
Committee on Insurance.
It is not
appropriate for this publication to provide an explanation as to why an article
has been worded in such a way or what is intended by its incorporation into the
rules. For those interested in understanding the rationale and interpretation
of the articles of UCP 600, this information will be found in the Commentary to
the rules, ICC Publication 601, which represents the Drafting Group’s views.
On behalf of the
Drafting Group I would like to extend our deep appreciation to the members of
the Consulting Group, ICC national committees and members of the Banking
Commission for their professional comments and their constructive participation
in this process.
Special thanks
are due to the members of the Drafting Group and their institutions, who are
listed below in alphabetical order.
Nicole Keller –
Vice President, Service International Products, Dresdner Bank AG, Frankfurt , Germany
Laurence Kooy –
Legal Adviser, BNP Paribas, Paris ,
France
Katja Lehr –
Business Manager, Trade Services Standards, SWIFT, La Hulpe, Belgium, then Vice
President, Membership Representation, International Financial Services
Association, New Jersey, USA; Representative to the ICC Commission on Banking
Technique and Practice;
Ole Malmqvist –
Vice President, Danske Bank, Copenhagen ,
Denmark
Paul Miserez –
Head of Trade Finance Standards, SWIFT, La Hulpe , Belgium
René Mueller –
Director, Credit Suisse, Zurich ,
Switzerland
Chee Seng Soh –
Consultant, Association of Banks in Singapore ,
Singapore
Dan Taylor –
President and CEO, International Financial Services Association. , New Jersey
USA
Alexander Zelenov
– Director, Vnesheconombank, Moscow ,
Russia
Ron Katz – Policy
Manager, ICC Commission on Banking Technique and Practice,
International
Chamber of Commerce, Paris ,
France
The undersigned
had the pleasure of chairing the Drafting Group.
It was through
the generous giving of their knowledge, time and energy that this revision was
accomplished so successfully. As Chair of the Drafting Group, I would like to
extend to them and to their institutions my gratitude for their contribution,
for a job well done and for their friendship. I would also like to extend my
sincere thanks to the management of ABN AMRO Bank N.V., for their
understanding, patience and support during the course of this revision process.
Corporate Director,
ABN AMRO Bank N.V., London , England
and Technical Adviser to
the ICC Commission on Banking Technique and Practice
November 2006
Content
Article 1 Application of UCP
The Uniform
Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication
no. 600 (“UCP”) are rules that apply to any documentary credit (“credit”)
(including, to the extent to which they may be applicable, any standby letter
of credit) when the text of the credit expressly indicates that it is subject
to these rules. They are binding on all parties thereto unless expressly
modified or excluded by the credit.
Article 2 Definitions
For the purpose
of these rules:
Advising bank means the bank
that advises the credit at the request of the issuing bank.
Applicant means the party
on whose request the credit is issued.
Banking day means a day on
which a bank is regularly open at the place at which an act subject to these
rules is to be performed.
Beneficiary means the party
in whose favour a credit is issued.
Complying
presentation means a presentation that is in accordance with the terms
and conditions of the credit, the applicable provisions of these rules and
international standard banking practice.
Confirmation means a definite
undertaking of the confirming bank, in addition to that of the issuing bank, to
honour or negotiate a complying presentation.
Confirming bank means the bank
that adds its confirmation to a credit upon the issuing bank’s authorization or
request.
Credit means any
arrangement, however named or described, that is irrevocable and thereby
constitutes a definite undertaking of the issuing bank to honour a complying
presentation.
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 by acceptance.
Issuing bank means the bank
that issues a credit at the request of an applicant or on its own behalf.
Negotiation means the
purchase by the nominated bank of 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 on or before the banking day on
which reimbursement is due to the nominated bank.
Nominated bank means the bank
with which the credit is available or any bank in the case of a credit
available with any bank.
Presentation means either the
delivery of documents under a credit to the issuing bank or nominated bank or
the documents so delivered.
Presenter means a
beneficiary, bank or other party that makes a presentation.
Article 3 Interpretations
For the purpose
of these rules:
Where applicable,
words in the singular include the plural and in the plural include the
singular.
A credit is
irrevocable even if there is no indication to that effect.
A document may be
signed by handwriting, facsimile signature, perforated signature, stamp, symbol
or any other mechanical or electronic method of authentication.
A requirement for
a document to be legalized, visaed, certified or similar will be satisfied by
any signature, mark, stamp or label on the document which appears to satisfy
that requirement.
Branches of a
bank in different countries are considered to be separate banks.
Terms such as
"first class", "well known", "qualified",
"independent", "official", "competent" or
"local" used to describe the issuer of a document allow any issuer except
the beneficiary to issue that document.
Unless required
to be used in a document, words such as "prompt",
"immediately" or "as soon as possible" will be disregarded.
The expression
"on or about" or similar will be interpreted as a stipulation that an
event is to occur during a period of five calendar days before until five
calendar days after the specified date, both start and end dates included.
The words
"to", "until", "till", “from” and “between” when
used to determine a period of shipment include the date or dates mentioned, and
the words “before” and "after" exclude the date mentioned.
The words “from”
and "after" when used to determine a maturity date exclude the date
mentioned.
The terms
"first half" and "second half" of a month shall be
construed respectively as the 1st to the 15th and the 16th to the last day of
the month, all dates inclusive.
The terms
"beginning", "middle" and "end" of a month shall
be construed respectively as the 1st to the 10th, the 11th to the 20th and the
21st to the last day of the month, all dates inclusive.
Article 4 Credits v. Contracts
a. A credit by its nature is a separate transaction from
the sale or other contract on which it may be based. Banks are in no way concerned
with or bound by such contract, even if any reference whatsoever to it is
included in the credit. Consequently, the undertaking of a bank to honour, to
negotiate or to fulfil any other obligation under the credit is not subject to
claims or defences by the applicant resulting from its relationships with the
issuing bank or the beneficiary.
A beneficiary can in no case avail itself of the
contractual relationships existing between banks or between the applicant and
the issuing bank.
b. An issuing bank should discourage any attempt by the
applicant to include, as an integral part of the credit, copies of the
underlying contract, proforma invoice and the like.
Article 5 Documents v. Goods, Services or Performance
Banks deal with
documents and not with goods, services or performance to which the documents
may relate.
Article 6 Availability, Expiry Date and Place for Presentation
a. A credit must state the bank with which it is available
or whether it is available with any bank. A credit available with a nominated
bank is also available with the issuing bank.
b. A credit must state whether it is available by sight
payment, deferred payment, acceptance or negotiation.
c. A credit must
not be issued available by a draft drawn on the applicant.
d. i. A credit must state an expiry date for
presentation. An expiry date stated for honour or negotiation will be deemed to
be an expiry date for presentation.
ii. The place of the bank with which the credit is
available is the place for presentation. The place for presentation under a
credit available with any bank is that of any bank. A place for presentation
other than that of the issuing bank is in addition to the place of the issuing
bank.
e. Except as provided in sub-article 29 (a), a
presentation by or on behalf of the beneficiary must be made on or before the
expiry date.
Article 7 Issuing Bank Undertaking
a. Provided that the
stipulated documents are presented to the nominated bank or to the issuing bank
and that they constitute a complying presentation, the issuing bank must honour
if the credit is available by:
i. sight payment, deferred payment or acceptance with the
issuing bank;
ii. sight payment with a nominated bank and that nominated
bank does not pay;
iii. deferred payment with a nominated bank and that nominated
bank does not incur its deferred payment undertaking or, having incurred its
deferred payment undertaking, does not pay at maturity;
iv. acceptance with a nominated bank and that nominated bank
does not accept a draft drawn on it or, having accepted a draft drawn on it,
does not pay at maturity;
v. negotiation with a nominated bank and that nominated bank
does not negotiate.
b. An issuing bank is irrevocably bound to honour as of
the time it issues the credit.
c. An issuing bank undertakes to reimburse a nominated bank
that has honoured or negotiated a complying presentation and forwarded the
documents to the issuing bank. Reimbursement for the amount of a complying
presentation under a credit available by acceptance or deferred payment is due
at maturity, whether or not the nominated bank prepaid or purchased before
maturity. An issuing bank's undertaking to reimburse a nominated bank is
independent of the issuing bank’s undertaking to the beneficiary.
Article 8 Confirming Bank Undertaking
a. Provided that the
stipulated documents are presented to the confirming bank or to any other
nominated bank and that they constitute a complying presentation, the
confirming bank must:
i. honour, if the
credit is available by
a. sight payment, deferred payment or acceptance with the
confirming bank;
b. sight payment with another nominated bank and that
nominated bank does not pay;
c. deferred payment with another nominated bank and that
nominated bank does not incur its deferred payment undertaking or, having
incurred its deferred payment undertaking, does not pay at maturity;
d. acceptance with another nominated bank and that nominated
bank does not accept a draft drawn on it or, having accepted a draft drawn on
it, does not pay at maturity;
e. negotiation with another nominated bank and that
nominated bank does not negotiate.
ii. negotiate, without recourse, if the credit is available
by negotiation with the confirming bank.
b. A confirming bank is irrevocably bound to honour or
negotiate as of the time it adds its confirmation to the credit.
c. A confirming bank undertakes to reimburse another
nominated bank that has honoured or negotiated a complying presentation and
forwarded the documents to the confirming bank. Reimbursement for the amount of
a complying presentation under a credit available by acceptance or deferred
payment is due at maturity, whether or not another nominated bank prepaid or
purchased before maturity. A confirming bank's undertaking to reimburse another
nominated bank is independent of the confirming bank’s undertaking to the
beneficiary.
d. If a bank is authorized or requested by the issuing bank
to confirm a credit but is not prepared to do so, it must inform the issuing
bank without delay and may advise the credit without confirmation.
Article 9 Advising of Credits and Amendments
a. A credit and any amendment may be advised to a
beneficiary through an advising bank. An advising bank that is not a confirming
bank advises the credit and any amendment without any undertaking to honour or
negotiate.
b. By advising the credit or amendment, the advising bank
signifies that it has satisfied itself as to the apparent authenticity of the
credit or amendment and that the advice accurately reflects the terms and
conditions of the credit or amendment received.
c. An advising bank may utilize the services of another
bank (“second advising bank”) to advise the credit and any amendment to the
beneficiary. By advising the credit or amendment, the second advising bank
signifies that it has satisfied itself as to the apparent authenticity of the
advice it has received and that the advice accurately reflects the terms and
conditions of the credit or amendment received.
d. A bank utilizing the services of an advising bank or
second advising bank to advise a credit must use the same bank to advise any
amendment thereto.
e. If a bank is requested to advise a credit or amendment
but elects not to do so, it must so inform, without delay, the bank from which
the credit, amendment or advice has been received.
f. If a bank is requested to advise a credit or amendment
but cannot satisfy itself as to the apparent authenticity of the credit, the
amendment or the advice, it must so inform, without delay, the bank from which
the instructions appear to have been received. If the advising bank or second
advising bank elects nonetheless to advise the credit or amendment, it must
inform the beneficiary or second advising bank that it has not been able to
satisfy itself as to the apparent authenticity of the credit, the amendment or
the advice.
Article 10 Amendments
a. Except as otherwise provided by article 38, a credit
can neither be amended nor cancelled without the agreement of the issuing bank,
the confirming bank, if any, and the beneficiary.
b. An issuing bank is irrevocably bound by an amendment as
of the time it issues the amendment. A confirming bank may extend its
confirmation to an amendment and will be irrevocably bound as of the time it
advises the amendment. A confirming bank may, however, choose to advise an
amendment without extending its confirmation and, if so, it must inform the
issuing bank without delay and inform the beneficiary in its advice.
c. The terms and conditions of the original credit (or a
credit incorporating previously accepted amendments) will remain in force for
the beneficiary until the beneficiary communicates its acceptance of the
amendment to the bank that advised such amendment. The beneficiary should give
notification of acceptance or rejection of an amendment. If the beneficiary
fails to give such notification, a presentation that complies with the credit
and to any not yet accepted amendment will be deemed to be notification of
acceptance by the beneficiary of such amendment. As of that moment the credit
will be amended.
d. A bank that advises an amendment should inform the bank
from which it received the amendment of any notification of acceptance or
rejection.
e. Partial acceptance of an amendment is not allowed and
will be deemed to be notification of rejection of the amendment.
f. A provision in an amendment to the effect that the
amendment shall enter into force unless rejected by the beneficiary within a
certain time shall be disregarded.
Article 11 Teletransmitted and Pre-Advised Credits and Amendments
a. An authenticated teletransmission of a credit or
amendment will be deemed to be the operative credit or amendment, and any
subsequent mail confirmation shall be disregarded.
If a teletransmission states "full details to
follow" (or words of similar effect), or states that the mail confirmation
is to be the operative credit or amendment, then the teletransmission will not
be deemed to be the operative credit or amendment. The issuing bank must then
issue the operative credit or amendment without delay in terms not inconsistent
with the teletransmission.
b. A preliminary advice of the issuance of a credit or
amendment (“pre-advice”) shall only be sent if the issuing bank is prepared to
issue the operative credit or amendment. An issuing bank that sends a
pre-advice is irrevocably committed to issue the operative credit or amendment,
without delay, in terms not inconsistent with the pre-advice.
Article 12 Nomination
a. Unless a nominated bank is the confirming bank, an
authorization to honour or negotiate does not impose any obligation on that
nominated bank to honour or negotiate, except when expressly agreed to by that
nominated bank and so communicated to the beneficiary.
b. By nominating a bank to accept a draft or incur a
deferred payment undertaking, an issuing bank authorizes that nominated bank to
prepay or purchase a draft accepted or a deferred payment undertaking incurred
by that nominated bank.
c. Receipt or examination and forwarding of documents by a
nominated bank that is not a confirming bank does not make that nominated bank
liable to honour or negotiate, nor does it constitute honour or negotiation.
Article 13 Bank-to-Bank Reimbursement Arrangements
a. If a credit states that reimbursement is to be obtained
by a nominated bank ("claiming bank") claiming on another party
("reimbursing bank"), the credit must state if the reimbursement is
subject to the ICC rules for bank-to-bank reimbursements in effect on the date
of issuance of the credit.
b. If a credit does not state that reimbursement is subject
to the ICC rules for bank-to-bank reimbursements, the following apply:
i. An issuing bank must provide a reimbursing bank with a
reimbursement authorization that conforms with the availability stated in the
credit. The reimbursement authorization should not be subject to an expiry
date.
ii. A claiming bank shall not be required to supply a
reimbursing bank with a certificate of compliance with the terms and conditions
of the credit.
iii. An issuing bank will be responsible for any loss of
interest, together with any expenses incurred, if reimbursement is not provided
on first demand by a reimbursing bank in accordance with the terms and
conditions of the credit.
iv. A reimbursing bank's charges are for the account of the
issuing bank. However, if the charges are for the account of the beneficiary,
it is the responsibility of an issuing bank to so indicate in the credit and in
the reimbursement authorization. If a reimbursing bank's charges are for the
account of the beneficiary, they shall be deducted from the amount due to a
claiming bank when reimbursement is made. If no reimbursement is made, the
reimbursing bank's charges remain the obligation of the issuing bank.
c. An issuing bank is not relieved of any of its
obligations to provide reimbursement if reimbursement is not made by a
reimbursing bank on first demand.
Article 14 Standard for Examination of Documents
a. A nominated bank acting on its nomination, a confirming
bank, if any, and the issuing bank must examine a presentation to determine, on
the basis of the documents alone, whether or not the documents appear on their
face to constitute a complying presentation.
b. A nominated bank acting on its nomination, a confirming
bank, if any, and the issuing bank shall each have a maximum of five banking
days following the day of presentation to determine if a presentation is
complying. This period is not curtailed or otherwise affected by the occurrence
on or after the date of presentation of any expiry date or last day for
presentation.
c. A presentation including one or more original transport
documents subject to articles 19, 20, 21, 22, 23, 24 or 25 must be made by or
on behalf of the beneficiary not later than 21 calendar days after the date of
shipment as described in these rules, but in any event not later than the
expiry date of the credit.
d. Data in a document, when read in context with the
credit, the document 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.
e. In documents other than the commercial invoice, the
description of the goods, services or performance, if stated, may be in general
terms not conflicting with their description in the credit.
f. If a credit requires presentation of a document other
than a transport document, insurance document or commercial invoice, without
stipulating by whom the document is to be issued or its data content, banks
will accept the document as presented if its content appears to fulfil the
function of the required document and otherwise complies with sub-article 14
(d).
g. A document presented but not required by the credit
will be disregarded and may be returned to the presenter.
h. If a credit contains a condition without stipulating the
document to indicate compliance with the condition, banks will deem such
condition as not stated and will disregard it.
i. A document may be dated prior to the issuance date of the
credit, but must not be dated later than its date of presentation.
j. When the addresses of the beneficiary and the applicant
appear in any stipulated document, they need not be the same as those stated in
the credit or in any other stipulated document, but must be within the same
country as the respective addresses mentioned in the credit. Contact details
(telefax, telephone, email and the like) stated as part of the beneficiary’s
and the applicant’s address will be disregarded. However, when the address and
contact details of the applicant appear as part of the consignee or notify
party details on a transport document subject to articles 19, 20, 21, 22, 23,
24 or 25, they must be as stated in the credit.
k. The shipper or consignor of the goods indicated on any
document need not be the beneficiary of the credit.
l. A transport document may be issued by any party other than
a carrier, owner, master or charterer provided that the transport document
meets the requirements of articles 19, 20, 21, 22, 23 or 24 of these rules.
Article 15 Complying Presentation
a. When an issuing bank determines that a presentation is
complying, it must honour.
b. When a confirming bank determines that a presentation
is complying, it must honour or negotiate and forward the documents to the
issuing bank.
c. When a nominated bank determines that a presentation is
complying and honours or negotiates, it must forward the documents to the
confirming bank or issuing bank.
Article 16 Discrepant Documents, Waiver and Notice
a. When a nominated bank acting on its nomination, a
confirming bank, if any, or the issuing bank determines that a presentation
does not comply, it may refuse to honour or negotiate.
b. When an issuing bank determines that a presentation
does not comply, it may in its sole judgement approach the applicant for a
waiver of the discrepancies. This does not, however, extend the period mentioned
in sub-article 14 (b).
c. When a nominated bank acting on its nomination, a
confirming bank, if any, or the issuing bank decides to refuse to honour or
negotiate, it must give a single notice to that effect to the presenter.
The notice must state:
i. that the bank is refusing to honour or negotiate; and
ii. each discrepancy in respect of which the bank refuses to
honour or negotiate; and
iii. a) that the bank is holding the documents pending further
instructions from the presenter; or
b) that the issuing bank is holding the documents until it receives a
waiver from the applicant and agrees to accept it, or receives further
instructions from the presenter prior to agreeing to accept a waiver; or
c) that the bank is returning the documents; or
d) that the bank is acting in accordance with instructions previously
received from the presenter.
d. The notice required in sub-article 16 (c) must be given
by telecommunication or, if that is not possible, by other expeditious means no
later than the close of the fifth banking day following the day of
presentation.
e. A nominated bank acting on its nomination, a confirming
bank, if any, or the issuing bank may, after providing notice required by
sub-article 16 (c) (iii) (a) or (b), return the documents to the presenter at
any time.
f. If an issuing bank or a confirming bank fails to act in
accordance with the provisions of this article, it shall be precluded from
claiming that the documents do not constitute a complying presentation.
g. When an issuing bank refuses to honour or a confirming
bank refuses to honour or negotiate and has given notice to that effect in
accordance with this article, it shall then be entitled to claim a refund, with
interest, of any reimbursement made.
Article 17 Original Documents and Copies
a. At least one original of each document stipulated in
the credit must be presented.
b. A bank shall treat as an original any document bearing
an apparently original signature, mark, stamp, or label of the issuer of the
document, unless the document itself indicates that it is not an original.
c. Unless a document indicates otherwise, a bank will also
accept a document as original if it:
i. appears to be written, typed, perforated or stamped by
the document issuer’s hand; or
ii. appears to be on the document issuer’s original
stationery; or
iii. states that it is original, unless the statement appears
not to apply to the document presented.
d. If a credit requires presentation of copies of
documents, presentation of either originals or copies is permitted.
e. If a credit requires presentation of multiple documents
by using terms such as "in duplicate", "in two fold" or
"in two copies", this will be satisfied by the presentation of at
least one original and the remaining number in copies, except when the document
itself indicates otherwise.
Article 18 Commercial Invoice
a. A commercial
invoice:
i. must appear to have been issued by the beneficiary
(except as provided in article 38);
ii. must be made out in the name of the applicant (except as
provided in sub-article 38 (g));
iii. must be made out in the same currency as the credit; and
iv. need not be signed.
b. A nominated bank acting on its nomination, a confirming
bank, if any, or the issuing bank may accept a commercial invoice issued for an
amount in excess of the amount permitted by the credit, and its decision will
be binding upon all parties, provided the bank in question has not honoured or
negotiated for an amount in excess of that permitted by the credit.
c. The description of the goods, services or performance
in a commercial invoice must correspond with that appearing in the credit.
Article 19 Transport Document Covering at Least Two Different Modes of Transport
a. A transport document covering at least two different
modes of transport (multimodal or combined transport document), however named,
must appear to:
i. indicate the name of the carrier and be signed by:
the carrier or a named agent for or on behalf of the
carrier, or
the master or a named agent for or on behalf of the
master.
Any signature by the carrier, master or agent must be
identified as that of the carrier, master or agent.
Any signature by an agent must indicate whether the agent
has signed for or on behalf of the carrier or for or on behalf of the master.
ii. indicate that the goods have been dispatched, taken in
charge or shipped on board at the place stated in the credit, by:
pre-printed wording, or
a stamp or notation indicating the date on which the
goods have been dispatched, taken in charge or shipped on board.
The date of issuance of the transport document will be
deemed to be the date of dispatch, taking in charge or shipped on board, and
the date of shipment. However, if the transport document indicates, by stamp or
notation, a date of dispatch, taking in charge or shipped on board, this date
will be deemed to be the date of shipment.
iii. indicate the place of dispatch, taking in charge or
shipment and the place of final destination stated in the credit, even if:
a. the transport document states, in addition, a different
place of dispatch, taking in charge or shipment or place of final destination, or
b. the transport document contains the indication
"intended" or similar qualification in relation to the vessel, port
of loading or port of discharge.
iv. be the sole original transport document or, if issued
in more than one original, be the full set as indicated on the transport
document.
v. contain terms and conditions of carriage or make
reference to another source containing the terms and conditions of carriage
(short form or blank back transport document). Contents of terms and conditions
of carriage will not be examined.
vi. contain no indication that it is subject to a charter
party.
b. For the purpose
of this article, transhipment means unloading from one means of conveyance and
reloading to another means of conveyance (whether or not in different modes of
transport) during the carriage from the place of dispatch, taking in charge or
shipment to the place of final destination stated in the credit.
c. i. A transport document may indicate that the goods will or
may be transhipped provided that the entire carriage is covered by one and the
same transport document.
ii. A transport document indicating that transhipment will or
may take place is acceptable, even if the credit prohibits transhipment.
Article 20 Bill of Lading
a. A bill of
lading, however named, must appear to:
i. indicate the name of the carrier and be signed by:
• the carrier or a named agent for or on behalf of the
carrier, or
• the master or a named agent for or on behalf of the
master.
Any signature by the carrier, master or agent must be
identified as that of the carrier, master or agent.
Any signature by an agent must indicate whether the agent
has signed for or on behalf of the carrier or for or on behalf of the master.
ii. indicate that the goods have been shipped on board a
named vessel at the port of loading stated in the credit by:
pre-printed wording, or
an on board notation indicating the date on which the
goods have been shipped on board.
The date of issuance of the bill of lading will be deemed
to be the date of shipment unless the bill of lading contains an on board
notation indicating the date of shipment, in which case the date stated in the
on board notation will be deemed to be the date of shipment.
If the bill of lading contains the indication
"intended vessel" or similar qualification in relation to the name of
the vessel, an on board notation indicating the date of shipment and the name
of the actual vessel is required.
iii. indicate shipment from the port of loading to the port
of discharge stated in the credit.
If the bill of lading does not indicate the port of
loading stated in the credit as the port of loading, or if it contains the
indication “intended” or similar qualification in relation to the port of
loading, an on board notation indicating the port of loading as stated in the
credit, the date of shipment and the name of the vessel is required. This
provision applies even when loading on board or shipment on a named vessel is
indicated by preprinted wording on the bill of lading.
iv. be the sole original bill of lading or, if issued in
more than one original, be the full set as indicated on the bill of lading.
v. contain terms and conditions of carriage or make
reference to another source containing the terms and conditions of carriage
(short form or blank back bill of lading). Contents of terms and conditions of
carriage will not be examined.
vi. contain no indication that it is subject to a charter
party.
b. For the purpose of this article, transhipment means
unloading from one vessel and reloading to another vessel during the carriage
from the port of loading to the port of discharge stated in the credit.
c. i. A bill of lading may indicate that the goods will or may
be transshipped provided that the entire carriage is covered by one and the
same bill of lading.
ii. A bill of lading indicating that transhipment will or may
take place is acceptable, even if the credit prohibits transhipment, if the
goods have been shipped in a container, trailer or LASH barge as evidenced by
the bill of lading.
d. Clauses in a bill of lading stating that the carrier
reserves the right to tranship will be disregarded.
Article 21 Non-Negotiable Sea Waybill
a. A
non-negotiable sea waybill, however named, must appear to:
i. indicate the name of the carrier and be signed by:
• the carrier or a named agent for or on behalf of the
carrier, or
• the master or a named agent for or on behalf of the
master.
Any signature by the carrier, master or agent must be
identified as that of the carrier, master or agent.
Any signature by an agent must indicate whether the agent
has signed for or on behalf of the carrier or for or on behalf of the master.
ii. indicate that the goods have been shipped on board a
named vessel at the port of loading stated in the credit by:
pre-printed wording, or
an on board notation indicating the date on which the
goods have been shipped on board.
The date of issuance of the non-negotiable sea waybill
will be deemed to be the date of shipment unless the non-negotiable sea waybill
contains an on board notation indicating the date of shipment, in which case
the date stated in the on board notation will be deemed to be the date of
shipment.
If the non-negotiable sea waybill contains the indication
"intended vessel" or similar qualification in relation to the name of
the vessel, an on board notation indicating the date of shipment and the name
of the actual vessel is required.
iii. indicate shipment from the port of loading to the port
of discharge stated in the credit.
If the non-negotiable sea waybill does not indicate the
port of loading stated in the credit as the port of loading, or if it contains
the indication “intended” or similar qualification in relation to the port of
loading, an on board notation indicating the port of loading as stated in the
credit, the date of shipment and the name of the vessel is required. This
provision applies even when loading on board or shipment on a named vessel is
indicated by pre-printed wording on the non-negotiable sea waybill.
iv. be the sole original non-negotiable sea waybill or, if
issued in more than one original, be the full set as indicated on the
non-negotiable sea waybill.
v. contain terms and conditions of carriage or make
reference to another source containing the terms and conditions of carriage
(short form or blank back non-negotiable sea waybill). Contents of terms and
conditions of carriage will not be examined.
vi. contain no indication that it is subject to a charter
party.
b. For the purpose of this article, transhipment means
unloading from one vessel and reloading to another vessel during the carriage
from the port of loading to the port of discharge stated in the credit.
c. i. A non-negotiable sea waybill may indicate that the goods
will or may be transhipped provided that the entire carriage is covered by one
and the same non-negotiable sea waybill.
ii. A non-negotiable sea waybill indicating that transhipment
will or may take place is acceptable, even if the credit prohibits transhipment,
if the goods have been shipped in a container, trailer or LASH barge as
evidenced by the non-negotiable sea waybill.
d. Clauses in a non-negotiable sea waybill stating that
the carrier reserves the right to tranship will be disregarded.
Article 22 Charter Party Bill of Lading
a. A bill of lading, however named, containing an
indication that it is subject to a charter party (charter party bill of
lading), must appear to:
i. be signed by:
the master or a named agent for or on behalf of the
master, or
the owner or a named agent for or on behalf of the owner,
or
the charterer or a named agent for or on behalf of the
charterer.
Any signature by the master, owner, charterer or agent
must be identified as that of the master, owner, charterer or agent.
Any signature by an agent must indicate whether the agent
has signed for or on behalf of the master, owner or charterer.
An agent signing for or on behalf of the owner or
charterer must indicate the name of the owner or charterer.
ii. indicate that the goods have been shipped on board a
named vessel at the port of loading stated in the credit by:
pre-printed wording, or
an on board notation indicating the date on which the
goods have been shipped on board.
The date of issuance of the charter party bill of lading
will be deemed to be the date of shipment unless the charter party bill of
lading contains an on board notation indicating the date of shipment, in which
case the date stated in the on board notation will be deemed to be the date of
shipment.
iii. indicate shipment from the port of loading to the port of
discharge stated in the credit. The port of discharge may also be shown as a
range of ports or a geographical area, as stated in the credit.
iv. be the sole original charter party bill of lading or,
if issued in more than one original, be the full set as indicated on the
charter party bill of lading.
b. A bank will not examine charter party contracts, even
if they are required to be presented by the terms of the credit.
Article 23 Air Transport Document
a. An air
transport document, however named, must appear to:
i. indicate the name of the carrier and be signed by:
the carrier, or
a named agent for or on behalf of the carrier.
Any signature by the carrier or agent must be identified
as that of the carrier or agent.
Any signature by an agent must indicate that the agent
has signed for or on behalf of the carrier.
ii. indicate that the goods have been accepted for
carriage.
iii. indicate the date of issuance. This date will be deemed
to be the date of shipment unless the air transport document contains a
specific notation of the actual date of shipment, in which case the date stated
in the notation will be deemed to be the date of shipment.
Any other information appearing on the air transport document
relative to the flight number and date will not be considered in determining
the date of shipment.
iv. indicate the airport of departure and the airport of
destination stated in the credit.
v. be the original for consignor or shipper, even if the credit
stipulates a full set of originals.
vi. contain terms and conditions of carriage or make
reference to another source containing the terms and conditions of carriage.
Contents of terms and conditions of carriage will not be examined.
b. For the purpose of this article, transhipment means
unloading from one aircraft and reloading to another aircraft during the
carriage from the airport of departure to the airport of destination stated in
the credit.
c. i. An air transport document may indicate that
the goods will or may be transhipped, provided that the entire carriage is
covered by one and the same air transport document.
ii. An air transport document indicating that transhipment
will or may take place is acceptable, even if the credit prohibits transhipment.
Article 24 Road, Rail or Inland Waterway Transport Documents
a. A road, rail or inland waterway transport document,
however named, must appear to:
i. indicate the name of the carrier and:
be signed by the carrier or a named agent for or on
behalf of the carrier, or
indicate receipt of the goods by signature, stamp or
notation by the carrier or a named agent for or on behalf of the carrier.
Any signature, stamp or notation of receipt of the goods
by the carrier or agent must be identified as that of the carrier or agent.
Any signature, stamp or notation of receipt of the goods
by the agent must indicate that the agent has signed or acted for or on behalf
of the carrier.
If a rail transport document does not identify the
carrier, any signature or stamp of the railway company will be accepted as
evidence of the document being signed by the carrier.
ii. indicate the date of shipment or the date the goods
have been received for shipment, dispatch or carriage at the place stated in
the credit. Unless the transport document contains a dated reception stamp, an
indication of the date of receipt or a date of shipment, the date of issuance
of the transport document will be deemed to be the date of shipment.
iii. indicate the place of shipment and the place of
destination stated in the credit.
b. i. A road transport document must appear to be
the original for consignor or shipper or bear no marking indicating for whom
the document has been prepared.
ii. A rail transport document marked “duplicate” will be
accepted as an original.
iii. A rail or inland waterway transport document will be
accepted as an original whether marked as an original or not.
c. In the absence of an indication on the transport document
as to the number of originals issued, the number presented will be deemed to
constitute a full set.
d. For the purpose of this article, transhipment means
unloading from one means of conveyance and reloading to another means of
conveyance, within the same mode of transport, during the carriage from the
place of shipment, dispatch or carriage to the place of destination stated in
the credit.
e. i. A road, rail or inland waterway transport
document may indicate that the goods will or may be transhipped provided that
the entire carriage is covered by one and the same transport document.
ii. A road, rail or inland waterway transport document
indicating that transhipment will or may take place is acceptable, even if the
credit prohibits transhipment.
Article 25 Courier Receipt, Post Receipt or Certificate of Posting
a. A courier receipt, however named, evidencing receipt of
goods for transport, must appear to:
i. indicate the name of the courier service and be stamped
or signed by the named courier service at the place from which the credit
states the goods are to be shipped; and
ii. indicate a date of pick-up or of receipt or wording to
this effect. This date will be deemed to be the date of shipment.
b. A requirement that courier charges are to be paid or
prepaid may be satisfied by a transport document issued by a courier service
evidencing that courier charges are for the account of a party other than the
consignee.
c. A post receipt or certificate of posting, however
named, evidencing receipt of goods for transport, must appear to be stamped or
signed and dated at the place from which the credit states the goods are to be
shipped. This date will be deemed to be the date of shipment.
Article 26 "On Deck", "Shipper's Load and Count", “Said by Shipper to Contain” and Charges Additional to Freight
a. A transport document must not indicate that the goods
are or will be loaded on deck. A clause on a transport document stating that
the goods may be loaded on deck is acceptable.
b. A transport document bearing a clause such as
"shipper's load and count" and "said by shipper to contain"
is acceptable.
c. A transport document may bear a reference, by stamp or
otherwise, to charges additional to the freight.
Article 27 Clean Transport Document
A bank will only
accept a clean transport document. A clean transport document is one bearing no
clause or notation expressly declaring a defective condition of the goods or
their packaging. The word “clean” need not appear on a transport document, even
if a credit has a requirement for that transport document to be “clean on
board”.
Article 28 Insurance Document and Coverage
a. An insurance document, such as an insurance policy, an
insurance certificate or a declaration under an open cover, must appear to be
issued and signed by an insurance company, an underwriter or their agents or
their proxies.
Any signature by an agent or proxy must indicate whether
the agent or proxy has signed for or on behalf of the insurance company or
underwriter.
b. When the insurance document indicates that it has been
issued in more than one original, all originals must be presented.
c. Cover notes
will not be accepted.
d. An insurance policy is acceptable in lieu of an insurance
certificate or a declaration under an open cover.
e. The date of the insurance document must be no later
than the date of shipment, unless it appears from the insurance document that
the cover is effective from a date not later than the date of shipment.
f. i. The insurance document must indicate the
amount of insurance coverage and be in the same currency as the credit.
ii. A requirement in the credit for insurance coverage to be
for a percentage of the value of the goods, of the invoice value or similar is
deemed to be the minimum amount of coverage required.
If there is no indication in the credit of the insurance
coverage required, the amount of insurance coverage must be at least 110% of
the CIF or CIP value of the goods.
When the CIF or CIP value cannot be determined from the
documents, the amount of insurance coverage must be calculated on the basis of
the amount for which honour or negotiation is requested or the gross value of
the goods as shown on the invoice, whichever is greater.
iii. The insurance document must indicate that risks are
covered at least between the place of taking in charge or shipment and the
place of discharge or final destination as stated in the credit.
g. A credit should state the type of insurance required
and, if any, the additional risks to be covered. An insurance document will be
accepted without regard to any risks that are not covered if the credit uses
imprecise terms such as “usual risks” or “customary risks”.
h. When a credit requires insurance against “all risks” and
an insurance document is presented containing any “all risks” notation or
clause, whether or not bearing the heading “all risks”, the insurance document
will be accepted without regard to any risks stated to be excluded.
i. An insurance
document may contain reference to any exclusion clause.
j. An insurance document may indicate that the cover is
subject to a franchise or excess (deductible).
Article 29 Extension of Expiry Date or Last Day for Presentation
a. If the expiry date of a credit or the last day for
presentation falls on a day when the bank to which presentation is to be made
is closed for reasons other than those referred to in article 36, the expiry
date or the last day for presentation, as the case may be, will be extended to
the first following banking day.
b. If presentation is made on the first following banking
day, a nominated bank must provide the issuing bank or confirming bank with a
statement on its covering schedule that the presentation was made within the
time limits extended in accordance with sub-article 29 (a).
c. The latest date for shipment will not be extended as a
result of sub-article 29 (a).
Article 30 Tolerance in Credit Amount, Quantity and Unit Prices
a. The words "about" or
"approximately" used in connection with the amount of the credit or
the quantity or the unit price stated in the credit are to be construed as allowing
a tolerance not to exceed 10% more or 10% less than the amount, the quantity or
the unit price to which they refer.
b. A tolerance not to exceed 5% more or 5% less than the
quantity of the goods is allowed, provided the credit does not state the
quantity in terms of a stipulated number of packing units or individual items
and the total amount of the drawings does not exceed the amount of the credit.
c. Even when partial shipments are not allowed, a
tolerance not to exceed 5% less than the amount of the credit is allowed,
provided that the quantity of the goods, if stated in the credit, is shipped in
full and a unit price, if stated in the credit, is not reduced or that
sub-article 30 (b) is not applicable. This tolerance does not apply when the
credit stipulates a specific tolerance or uses the expressions referred to in
sub-article 30 (a).
Article 31 Partial Drawings or Shipments
a. Partial drawings
or shipments are allowed.
b. A presentation consisting of more than one set of
transport documents evidencing shipment commencing on the same means of
conveyance and for the same journey, provided they indicate the same
destination, will not be regarded as covering a partial shipment, even if they
indicate different dates of shipment or different ports of loading, places of
taking in charge or dispatch. If the presentation consists of more than one set
of transport documents, the latest date of shipment as evidenced on any of the
sets of transport documents will be regarded as the date of shipment.
A presentation consisting of one or more sets of
transport documents evidencing shipment on more than one means of conveyance
within the same mode of transport will be regarded as covering a partial
shipment, even if the means of conveyance leave on the same day for the same
destination.
c. A presentation consisting of more than one courier
receipt, post receipt or certificate of posting will not be regarded as a
partial shipment if the courier receipts, post receipts or certificates of
posting appear to have been stamped or signed by the same courier or postal
service at the same place and date and for the same destination.
Article 32 Instalment Drawings or Shipments
If a drawing or
shipment by instalments within given periods is stipulated in the credit and
any instalment is not drawn or shipped within the period allowed for that
instalment, the credit ceases to be available for that and any subsequent
instalment.
Article 33 Hours of Presentation
A bank has no
obligation to accept a presentation outside of its banking hours.
Article 34 Disclaimer on Effectiveness of Documents
A bank assumes no
liability or responsibility for the form, sufficiency, accuracy, genuineness,
falsification or legal effect of any document, or for the general or particular
conditions stipulated in a document or superimposed thereon; nor does it assume
any liability or responsibility for the description, quantity, weight, quality,
condition, packing, delivery, value or existence of the goods, services or
other performance represented by any document, or for the good faith or acts or
omissions, solvency, performance or standing of the consignor, the carrier, the
forwarder, the consignee or the insurer of the goods or any other person.
Article 35 Disclaimer on Transmission and Translation
A bank assumes no
liability or responsibility for the consequences arising out of delay, loss in
transit, mutilation or other errors arising in the transmission of any messages
or delivery of letters or documents, when such messages, letters or documents
are transmitted or sent according to the requirements stated in the credit, or
when the bank may have taken the initiative in the choice of the delivery
service in the absence of such instructions in the credit.
If a nominated
bank determines that a presentation is complying and forwards the documents to
the issuing bank or confirming bank, whether or not the nominated bank has
honoured or negotiated, an issuing bank or confirming bank must honour or
negotiate, or reimburse that nominated bank, even when the documents have been
lost in transit between the nominated bank and the issuing bank or confirming
bank, or between the confirming bank and the issuing bank.
A bank assumes no
liability or responsibility for errors in translation or interpretation of
technical terms and may transmit credit terms without translating them.
Article 36 Force Majeure
A bank assumes no
liability or responsibility for the consequences arising out of the
interruption of its business by Acts of God, riots, civil commotions,
insurrections, wars, acts of terrorism, or by any strikes or lockouts or any
other causes beyond its control.
A bank will not,
upon resumption of its business, honour or negotiate under a credit that
expired during such interruption of its business.
Article 37 Disclaimer for Acts of an Instructed Party
a. A bank utilizing the services of another bank for the
purpose of giving effect to the instructions of the applicant does so for the
account and at the risk of the applicant.
b. An issuing bank or advising bank assumes no liability
or responsibility should the instructions it transmits to another bank not be
carried out, even if it has taken the initiative in the choice of that other
bank.
c. A bank instructing another bank to perform services is
liable for any commissions, fees, costs or expenses (“charges”) incurred by
that bank in connection with its instructions.
If a credit states that charges are for the account of
the beneficiary and charges cannot be collected or deducted from proceeds, the
issuing bank remains liable for payment of charges.
A credit or amendment should not stipulate that the
advising to a beneficiary is conditional upon the receipt by the advising bank
or second advising bank of its charges.
d. The applicant shall be bound by and liable to indemnify
a bank against all obligations and responsibilities imposed by foreign laws and
usages.
Article 38 Transferable Credits
a. A bank is under no obligation to transfer a credit except
to the extent and in the manner expressly consented to by that bank.
b. For the purpose
of this article:
Transferable credit means a credit that specifically
states it is “transferable”. A transferable credit may be made available in
whole or in part to another beneficiary (“second beneficiary”) at the request
of the beneficiary (“first beneficiary”).
Transferring bank means a nominated bank that transfers
the credit or, in a credit available with any bank, a bank that is specifically
authorized by the issuing bank to transfer and that transfers the credit. An
issuing bank may be a transferring bank.
Transferred credit means a credit that has been made
available by the transferring bank to a second beneficiary.
c. Unless otherwise agreed at the time of transfer, all
charges (such as commissions, fees, costs or expenses) incurred in respect of a
transfer must be paid by the first beneficiary.
d. A credit may be transferred in part to more than one
second beneficiary provided partial drawings or shipments are allowed.
A transferred credit cannot be transferred at the request
of a second beneficiary to any subsequent beneficiary. The first beneficiary is
not considered to be a subsequent beneficiary.
e. Any request for transfer must indicate if and under what
conditions amendments may be advised to the second beneficiary. The transferred
credit must clearly indicate those conditions.
f. If a credit is transferred to more than one second
beneficiary, rejection of an amendment by one or more second beneficiary does
not invalidate the acceptance by any other second beneficiary, with respect to
which the transferred credit will be amended accordingly. For any second
beneficiary that rejected the amendment, the transferred credit will remain
unamended.
g. The transferred credit must accurately reflect the terms
and conditions of the credit, including confirmation, if any, with the
exception of:
- the amount of the credit,
- any unit price stated therein,
- the expiry date,
- the period for presentation, or
- the latest shipment date or given period for shipment,
any or all of
which may be reduced or curtailed.
The percentage for which insurance cover must be effected
may be increased to provide the amount of cover stipulated in the credit or
these articles.
The name of the first beneficiary may be substituted for
that of the applicant in the credit.
If the name of the applicant is specifically required by
the credit to appear in any document other than the invoice, such requirement
must be reflected in the transferred credit.
h. The first beneficiary has the right to substitute its own
invoice and draft, if any, for those of a second beneficiary for an amount not
in excess of that stipulated in the credit, and upon such substitution the
first beneficiary can draw under the credit for the difference, if any, between
its invoice and the invoice of a second beneficiary.
i. If the first beneficiary is to present its own invoice
and draft, if any, but fails to do so on first demand, or if the invoices
presented by the first beneficiary create discrepancies that did not exist in
the presentation made by the second beneficiary and the first beneficiary fails
to correct them on first demand, the transferring bank has the right to present
the documents as received from the second beneficiary to the issuing bank,
without further responsibility to the first beneficiary.
j. The first beneficiary may, in its request for transfer,
indicate that honour or negotiation is to be effected to a second beneficiary
at the place to which the credit has been transferred, up to and including the
expiry date of the credit. This is without prejudice to the right of the first
beneficiary in accordance with sub-article 38 (h).
k. Presentation of documents by or on behalf of a second
beneficiary must be made to the transferring bank.
Article 39 Assignment of Proceeds
The fact that a
credit is not stated to be transferable shall not affect the right of the
beneficiary to assign any proceeds to which it may be or may become entitled
under the credit, in accordance with the provisions of applicable law. This
article relates only to the assignment of proceeds and not to the assignment of
the right to perform under the credit.
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