UCP600 English

UCP600FOREWORDThis 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 !""# $t is the fruit of more than three years of wor% &y the $nternational Cham&er of Commerce's ($CC) Commission on (an%ing Techni)ue and Practice#$CC* which was esta&lished in !!* had as its primary o&+ective facilitating the flow of international trade at a time when nationalism and protectionism posed serious threats to the world trading system# $t was in that spirit that the UCP were first introduced , to alleviate the confusion caused &y individual countries' promoting their own national rules on letter of credit practice# The o&+ective* since attained* was to create a set of contractual rules that would esta&lish uniformity in that practice* so that practitioners would not have to cope with a plethora of often conflicting national regulations# The universal acceptance of the UCP &y practitioners in countries with widely divergent economic and +udicial systems is a testament to the rules' success#$t is important to recall that the UCP represent the wor% of a private international organi-ation* not a governmental &ody# .ince its inception* $CC has insisted on the central role of self/regulation in &usiness practice# These rules* formulated entirely &y experts in the private sector* have validated that approach# The UCP remain the most successful set of private rules for trade ever developed#0 range of individuals and groups contri&uted to the current revision* which is entitled UCP 122# These include the UCP Drafting 3roup* which sifted through more than 4222 individual comments &efore arriving at this consensus text5 the UCP Consulting 3roup* consisting of mem&ers from more than 64 countries* which served as the advisory &ody reacting to and proposing changes to the various drafts5 the more than 722 mem&ers of the $CC Commission on (an%ing Techni)ue and Practice who made pertinent suggestions for changes in the text5 and $CC national committees worldwide which too% an active role in consolidating comments from their mem&ers# $CC also expresses its gratitude to practitioners in the transport and insurance industries* whose perceptive suggestions honed the final draft#Guy SebbanSecretary GeneralInternational Chamber of Commercehttp://michaelhoan.googlepages.com/ 1UCP600INTRODUCTION$n 8ay 622"* the $nternational Cham&er of Commerce authori-ed the $CC Commission on (an%ing Techni)ue and Practice ((an%ing Commission) to &egin a revision of the Uniform Customs and Practice for Documentary Credits* $CC Pu&lication 422#0s with other revisions* the general o&+ective was to address developments in the &an%ing* transport and insurance industries# 0dditionally* there was a need to loo% at the language and style used in the UCP to remove wording that could lead to inconsistent application and interpretation#9hen wor% on the revision started* a num&er of glo&al surveys indicated that* &ecause ofdiscrepancies* approximately :2; of documents presented under letters of credit were &eing re+ected on first presentation# This o&viously had* and continues to have* a negative effect on the letter of credit &eing seen as a means of payment and* if unchec%ed* could have serious implications for maintaining or increasing its mar%et shareas a recogni-ed means of settlement in international trade# The introduction &y &an%s of a discrepancy fee has highlighted the importance of this issue* especially when the underlying discrepancies have &een found to &e du&ious or unsound# 9hilst the num&er of cases involving litigation has not grown during the lifetime of UCP 422* the introductionof the $CC's Documentary Credit Dispute cto&er !!: (su&se)uently revised in 8arch 6226) has resulted in more than 12 cases &eing decided#To address these and other concerns* the (an%ing Commission esta&lished a Drafting 3roup to revise UCP 422# $t was also decided to create a second group* %nown as the Consulting 3roup* to review and advise on early drafts su&mitted &y the Drafting 3roup# The Consulting 3roup* made up of over 72 individuals from 61 countries* consisted of &an%ing and transport industry experts# 0&ly co/chaired &y @ohn Turn&ull* Deputy 3eneral 8anager* .umitomo 8itsui (an%ing Corporation =urope Atd* Aondon and Carlo Di Binni* 0dviser* $talian (an%ers 0ssociation* pinions issued &y the (an%ing Commission under UCP 422# .ome 422 >pinions were reviewed to assess whether the issues involved warranted a change in* an addition to or a deletion of any UCP article# $n addition* consideration was given to the content of the four Position Papers issued &y the Commission in .eptem&er !!7* the two Decisions issued &y the Commission (concerning the introduction of the euro and the determinationof what constituted an original document under UCP 422 su&/article 62(&) and the decisions issued in D>CD=? cases#During the revision process* notice was ta%en of the considera&le wor% that had &een completed in creating the International Standard Banking Practice for the Examination of Documents under Documentary Credits ($.(P)* $CC Pu&lication 174# This pu&lication hasevolved into a necessary companion to the UCP for determining compliance of documents with the terms of letters of credit# $t is the expectation of the Drafting 3roup and the (an%ing Commission that the application of the principles contained in the $.(P* including su&se)uent revisions thereof* will continue during the time UCP 122 is in force# 0t the time UCP 122 is implemented* there will &e an updated version of the $.(P to &ring its contents in line with the su&stance and style of the new rules#The four Position Papers issued in .eptem&er !!7 were issued su&+ect to their application under UCP 4225 therefore* they will not &e applica&le under UCP 122# The essence of the Decision covering the determination of an original document has &een incorporated into the text of UCP 122# The outcome of the D>CD=? cases were http://michaelhoan.googlepages.com/ UCP600invaria&ly &ased on existing $CC (an%ing Commission >pinions and therefore contained no specific issues that re)uired addressing in these rules#>ne of the structural changes to the UCP is the introduction of articles covering definitions (article 6) and interpretations (article ")# $n providing definitions of roles played &y &an%s and the meaning of specific terms and events* UCP 122 avoids the necessity ofrepetitive text to explain their interpretation and application# .imilarly* the article covering interpretations aims to ta%e the am&iguity 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* $CC national committees were canvassed on a range of issues to determine their preferences on alternative texts su&mitted &y the Drafting 3roup# The results of this exercise and the considera&le input from national committees on individual items in the text is reflected in the content of UCP 122# The Drafting 3roup considered* not only the current practice relative to the documentary credit* &ut 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* de&ate and compromise amongst the various mem&ers of the Drafting 3roup* the mem&ers of the (an%ing Commission and the respective $CC national committees# Calua&le comment has also &een received from the $CC Commission on Transport and Aogistics* the Commission on Commercial Aaw and Practice and the Committee on $nsurance#$t is not appropriate for this pu&lication to provide an explanation as to why an article has &een worded in such a way or what is intended &y its incorporation into the rules# Dor those interested in understanding the rationale and interpretation of the articles of UCP 122* this information will &e found in the Commentary to the rules* $CC Pu&lication 12* which represents the Drafting 3roup's views#>n &ehalf of the Drafting 3roup $ would li%e to extend our deep appreciation to the mem&ers of the Consulting 3roup* $CC national committees and mem&ers of the (an%ingCommission for their professional comments and their constructive participation in this process#.pecial than%s are due to the mem&ers of the Drafting 3roup and their institutions* who are listed &elow in alpha&etical order#Bicole Eeller , Cice President* .ervice $nternational Products* Dresdner (an% 03* Dran%furt* 3ermany5