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How many articles are in the UCP 600?

How many articles are in the UCP 600?

39 articles
The UCP 600 (“Uniform Customs & Practice for Documentary Credits”) is the official publication which is issued by the International Chamber of Commerce (ICC). 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.

Who is confirming bank in LC?

In a letter of credit transaction, the confirming bank, also known as the confirmer, is a bank that, at the request of the issuing bank, agrees to perform the principal duties of the issuing bank.

What is transferable LC?

A Transferable Letter of Credit (LC) is a documentary credit under which the Beneficiary (first Beneficiary) may request the bank specifically authorised in the credit to transfer the credit, available in whole or part, to one or more secondary Beneficiary(ies).

What does honor mean under UCP?

to pay at sight if
Honour means: to pay at sight if the credit is available by sight payment. to incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment. to accept a bill of exchange (“draft”) drawn by the beneficiary and pay at maturity if the credit is available by acceptance.

Which article of UCP 600 defines letter of credit?

Article 2
According to the UCP 600 (Article 2) issuing bank means the bank that issues a documentary letter of credit at the request of an applicant (buyer or importer) or on its own behalf.

What is the difference between confirmed LC and unconfirmed LC?

Main Institution – Under an unconfirmed LC, the original issuing bank is the main institution that provides an irrevocable payment guarantee to the exporter while a confirmed LC not only contains an irrevocable guarantee from the issuing bank but from the second bank also, known as a confirming bank.

What is irrevocable confirmed LC?

An irrevocable and confirmed letter of credit has not only the commitment of the issuing bank but also a binding undertaking given by the confirming bank to pay when the documents are presented in accordance with the terms and conditions of the credit.

What is Red clause LC?

A red clause letter of credit is an unsecured loan that a buyer extends to the seller, considered an advance. These letters of credit are often used to facilitate international exports and trade. Red clause letters of credit are a way for sellers to boost their working capital.

What is a complying presentation according to UCP 600?

A complying presentation is one that meets the requirements of the credit and the applicable provisions of the UCP 600 and international standard banking practice (UCP 600 Article 2). The Bank has a maximum of 5 banking days following the day of presentation to determine if a presentation is complying.

What is advising Bank as per UCP 600?

Advising Bank: The bank which, at the request of the Issuing Bank, advises the Beneficiary when the credit has been issued. An Advising Bank owes no obligation to the Beneficiary other than to satisfy itself as to the ostensible authenticity of the credit upon which it is advising.

What is Article 28 of the UCP 600?

Article 28 Insurance Documents If a credit requires presentation of an insurance document such as an insurance policy, insurance certificate or declaration under an open cover, UCP 600 article 28 is applicable. ARTICLE 28

What are the objectives of UCP 600?

One of the most important objectives of the UCP 600 is providing easier language and addressing the progress in various industries to unify the interpretation and application of documentary credits. Addressing developments in banking, transport and insurance industries.

What are the UCP 600 rules for trade finance?

The UCP 600 rules are voluntarily incorporated into contracts and have to be specifically outlined in trade finance contracts in order to apply. They also allow flexibility for the international parties involved.

What is UCP and why is it important?

What is UCP? The Uniform Customs and Practice for Documentary Credits (“UCP”) is the rule governing the Documentary credits. It was established by the international chamber of commerce (ICC) to mitigate the doubts caused by individual countries promoting their own national rules on documentary credit practice.