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Uniform Customs and Practice for Documentary Credits (UCPDC 500)
A. General Provisions and Definitions
Article 1. Application of UCP
The Uniform Customs and Practice for Documentary Credits, 1993 Revision, ICC
Publications No. 500, shall apply to all Documentary Credits (including to the extent to
which they may be applicable, Standby Letter(s) of Credit) where they are incorporated into
the text of the Credit. They are binding on all parties thereto, unless otherwise expressly
stipulated in the Credit.
Article 2. Meaning of Credit
For the purpose of these Articles, the expressions 'Documentary Credit(s)' and 'Standby
Letter(s) of Crediť (hereinafter referred to as 'Credit(s)'), mean any arrangement, however
named or described whereby a bank (the 'Issuing Bank') acting at the request and on the
instructions of a customer (the 'Applicanť) or on its own behalf:
i. is to make a payment to or to the order of a third party (the 'Beneficiary'), or is to
accept and pay bills of exchange (Draft(s)) drawn by the Beneficiary,
or
ii. authorises another bank to effect such payment, or to accept and pay such bills of
exchange (Draft(s)),
or
iii. authorises another bank to negotiate,
against stipulated document(s), provided that the terms and conditions of the Credit are
complied with.
For the purpose of these Articles, branches of a bank in different countries are considered
another bank.
Article 3. Credits vs. Contracts
a Credits by their nature, are separate transactions from the sales or other contract(s) on
which they may be based and banks are in no way concerned with or bound by such
contract(s), even if any reference whatsoever to such contract(s) is included in the
Credit. Consequently the undertaking of a bank to pay, accept and pay Draft(s) or
negotiate and/or to fulfil any other obligation under the Credit, is not subject to
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claims or defences by the Applicant resulting from his relationships with the Issuing
Bank or the Beneficiary.
b A Beneficiary can in no case avail himself of the contractual relationships existing
between the banks or between the Applicant and the Issuing Bank.
Article 4. Documents vs. Goods/Services/Performances
In Credit operations all parties concerned deal with documents, and not with goods, services
and/or other performances to which the documents may relate.
Article 5. Instructions to issue/amend Credits
a Instructions for the issuance of a Credit, the Credit itself, instructions for an
amendment thereto, and the amendment itself, must be complete and precise.
In order to guard against confusion and misunderstanding, banks should discourage
any attempt:
i. to include excessive detail in the Credit or in any amendment thereto,
ii. to give instructions to issue, advise or confirm a Credit by reference to a Credit
previously issued (similar Credit) where such previous Credit has been subject
to accepted amendment(s), and/or unaccepted amendment(s).
b All instructions for the issuance of a Credit and the Credit itself and, where applicable,
all instructions for an amendment thereto and the amendment itself, must state
precisely the document(s) against which payment, acceptance or negotiation is to be
made.
B. Form and Notification of Credits
Article 6. Revocable v. Irrevocable Credits
a A Credit may be either
i. revocable,
or
ii. irrevocable
b the Credit, therefore, should clearly indicate whether it is revocable or irrevocable
c in the absence of such indication the Credit shall be deemed to be irrevocable.
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Article 7. Advising Bank's Liability
a A credit may be advised to a Beneficiary through another bank (the `Advising Bank')
without engagement on the part of the Advising Bank, but that bank, if it elects to
advise the Credit, shall take reasonable care to check the apparent authenticity of the
Credit which it advises. If the bank elects not to advise the Credit, it must so inform
the Issuing Bank without delay.
b If the Advising Bank cannot establish such apparent authenticity it must inform,
without delay, the bank from which the instructions appear to have been received that
it has been unable to establish the authenticity of the Credit and if it elects
nonetheless to advise the Credit it must inform the Beneficiary that it has not been
able to establish the authenticity of the Credit.
Article 8. Revocation of a Credit
a A revocable credit may be amended or cancelled by the Issuing Bank at any moment
and without prior notice to the Beneficiary.
b However, the Issuing Bank must:
i. reimburse another bank with which a revocable Credit has been made
available for sight payment, acceptance or negotiation ­ for any payment,
acceptance or negotiation made by such bank ­ prior to receipt by it of notice
of amendments or cancellation, against documents which appear on their face
to be in compliance with the terms and condition of the Credit.
ii. reimburse another bank with which a revocable Credit has been made
available for deferred payment, if such bank has, prior to receipt by it of notice
of amendment or cancellation, taken up documents that appear on their face to
be in compliance with the terms and condition of the Credit.
Article 9. Liability of Issuing and Confirming Banks
a An irrevocable Credit constitutes an definite undertaking of the Issuing Bank,
provided that the stipulated documents are presented to the Nominated Bank or to the
Issuing Bank and that the terms and conditions of the Credit are complied with:
i. if the Credit provides for sight payment ­ to pay a sight,
ii. if the Credit provides for deferred payment ­ to pay on the maturity date(s)
determinable in accordance with the stipulations of the Credit,
iii. if the Credit provides for acceptance:
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a by the Issuing Bank ­ to accept Draft(s) drawn by the Beneficiary on
the Issuing Bank and pay at maturity,
or
b by another drawee bank ­ to accept and pay at maturity Draft(s) drawn
by the Beneficiary on the Issuing Bank in the event the drawee bank
stipulated in the Credit does not accept Draft(s) drawn on it, or to pay
Draft(s) accepted but not paid by such drawee bank at maturity,
iv. if the Credit provides for negotiation ­ to pay without recourse to drawers
and/or bona fide holders, Draft(s) drawn by the Beneficiary and/or
document(s) presented under the Credit. A Credit should not be issued
available by Draft(s) on the Applicant. The Credit nevertheless calls for
Draft(s) on the Applicant, banks will consider such Draft(s) as an additional
document(s).
b A confirmation of an Irrevocable Credit by another bank (the `Confirming Bank')
upon the authorisation or request of the Issuing Bank, constitutes a definite
undertaking of the Confirming Bank, in addition to that of the Issuing Bank,
provided that the stipulated documents are presented to the Confirming Bank or to any
other Nominated Bank and that the terms and conditions of the Credit are complied
with:
i. if the Credit provides for sight payment ­ to pay at sight,
ii. if the Credit provides for deferred payment ­ to pay on the maturity date(s)
determinable in accordance with stipulations of the Credit.
iii. if the Credit provides for acceptance:
a by the Confirming Bank ­ to accept Draft(s) drawn by the Beneficiary
on the Confirming Bank and pay them at maturity,
b by another drawee bank ­ to accept and pay at maturity Draft(s) drawn
by the Beneficiary on the Confirming Bank, in the event the drawee
bank stipulated in the Credit does not accept Draft(s) drawn on it, or to
pay Draft(s) accepted but not paid by such drawee bank at maturity.
iv. if the Credit provides for negotiation ­ to negotiate without recourse to
drawers and/or bona fide holders, Draft(s) drawn by the Beneficiary and/or
document(s) presented under the Credit. A Credit should not be issued
available by Draft(s) on the Applicant. If the Credit nevertheless calls for
Draft(s on the Applicant, banks will Consider such Draft(s) as an additional
document(s).
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c
i. If another bank is authorised or requested by the Issuing Bank to add its
confirmation to a Credit but is not prepared to do so , it must so inform the
Issuing Bank without delay.
ii. Unless the Issuing Bank specifies otherwise in its authorisation or request to
add confirmation, the Advising Bank may advise the Credit to the Beneficiary
without adding its confirmation.
d
i. Except as otherwise provided by Article 48, an Irrevocable Credit can neither
be amended nor cancelled without the agreement of the Issuing Bank, the
Confirming Bank, if any, and the Beneficiary.
ii. The Issuing Bank shall be irrevocably bound by an amendment(s) issued by it
from the time of the issuance of such amendment)(s). A Confirming Bank
may extend its confirmation to an amendment and shall be irrevocably bound
as of the time of its advice of the amendment. A Confirming Bank may,
however, choose to advise an amendment to the Beneficiary without extending
its confirmation and if so, must inform the Issuing Bank and the Beneficiary
without delay.
iii. The terms of the original Credit (or a Credit incorporating previously accepted
amendment(s)) will remain in force for the Beneficiary until the Beneficiary
communicates his acceptance of the amendment to the bank that advised such
amendment. The Beneficiary should give notification of acceptance or
rejections of amendment(s). If the Beneficiary fails to give such notification,
the tender of documents to the Nominated Bank or Issuing Bank, which
conform to the Credit and to not yet accepted amendment(s), will be deemed
to be notification of acceptance by the Beneficiary of such amendment(s) and
as of that moment the Credit will be amended.
iv. Partial acceptance of amendments contained in one and the same advice of
amendments is not allowed and consequently will not be given any effect.
Article 10. Types of Credit
a All credits must clearly indicate whether they are available by sight payment, by
deferred payment by acceptance or by negotiation.
b
i. Unless the Credit stipulates that it is available only with the Issuing Bank, all
Credits must nominate the bank (the `Nominated Bank') which is authorised to
pay, to incur a deferred payment undertaking, to accept Draft(s) or to
negotiate. In a freely negotiable Credit, any bank is a Nominated Bank
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Presentation of documents must be made to the Issuing Bank or the
Confirming Bank, if any, or any other Nominated Bank.
ii. Negotiation means the giving value for Draft(s) and/or document(s) by the
bank authorised to negotiate. Mere examination of the documents without
giving of value does not constitute a negotiation.
c Unless the Nominated Bank is the Confirming Bank, nomination by the Issuing Bank
does not constitute any undertaking by the Nominated Bank to pay, to incur a deferred
payment undertaking, to accept Draft(s), or to negotiate. Except where expressly
agreed to by the Nominated Bank and so communicated to the Beneficiary, the
Nominated Bank's receipt of and/or examination and/or forwarding of the documents
does not make that bank liable to pay, to incur a deferred payment undertaking, to
accept Draft(s), or to negotiate.
d By nominating another bank, or by allowing for negotiation by any bank, or by
authorising or requesting another bank to add its confirmation, the Issuing Bank
authorises such bank to pay, accept Draft(s) or negotiate as the case may be, against
documents which appear on their face to be in compliance with the terms and
conditions of the Credit and undertakes to reimburse such bank in accordance with the
provision of these Articles.
Article 11. Teletransmitted and Pre-Advised Credits
a
i. When an Issuing Bank instructs an Advising Bank by an authenticated
teletransmission to advise a Credit or to amend a Credit, the teletransmission
will be deemed to be the operative Credit instrument or the operative
amendment, and no mail confirmation should be sent. Should a mail
confirmation nevertheless be sent, it will have no effect and the Advising Bank
will have no obligation to check such mail confirmation against the operative
Credit instrument or the operative amendment received by teletransmission.
ii. If the teletransmission states `full details to follow' (or words of similar effect)
or states that the mail confirmation is to be the operative Credit instrument or
the operative amendment, then the teletransmission will not be deemed to be
the operative Credit instrument or the operative amendment. The Issuing
Bank must forward the operative Credit instrument or the operative
amendment to such Advising Bank without delay.
b If a bank uses the services of an Advising Bank to have the Credit advised to the
Beneficiary, it must also use the services of the same bank for advising an
amendment(s).
c A preliminary advice of the issuance or amendment of an irrevocable Credit (preadvice),
shall only be given by an Issuing Bank if such bank is prepared to issue the
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operative Credit instrument or the operative amendment thereto. Unless otherwise
stated in such preliminary advice by the Issuing Bank, an Issuing Bank having given
such preadvice shall be irrevocably committed to issue or amend the Credit, in terms
not inconsistent with the pre-advice, without delay.
Article 12. Incomplete or Unclear Instructions
If incomplete or unclear instructions are received to advise, confirm or amend a Credit, the
bank requested to act on such instructions may give preliminary notification to the
Beneficiary for information only and without responsibility. This preliminary notification
should state clearly that the notification is provided for information only and without the
responsibility of the Advising Bank. In any event, the Advising Bank must inform the
Issuing Bank of the action taken and request it to provide the necessary information.
The Issuing Bank must provide the necessary information without delay. The Credit will be
advised, confirmed or amended, only when complete and clear instructions have been
received and if the Advising Bank is then prepared to act on the instructions.
C. Liabilities and Responsibilities
Article 13. Standard for Examination of Documents
a Banks must examine all documents stipulated in the Credit with reasonable care to
ascertain whether or not they appear, on their face, to be in compliance with the terms
and conditions of the Credit. Compliance of the stipulated documents on their face
with the terms and conditions of the Credit, shall be determined by international
standard banking practice as reflected in these Articles. Documents, which appear on
their face to be inconsistent with one another, will be considered as not appearing on
their face to be in compliance with the terms and conditions of the Credit.
Documents not stipulated in the Credit will not be examined by banks. If they receive
such documents, they shall return them to the presenter or pass them on without
responsibility.
b The Issuing Bank, the Confirming Bank, if any, or a Nominated Bank acting on their
behalf, shall each have a reasonable time, not to exceed seven banking days following
the day of receipt of the documents, to examine the documents and determine whether
to take up or refuse the documents and to inform the party from which it received the
documents accordingly.
c If a Credit contains conditions without stating the document(s) to be presented in
compliance therewith, banks will deem such conditions as not stated and will
disregard them.
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Article 14. Discrepant Documents and Notice
a When the Issuing Bank authorises another bank to pay, incur a deferred payment
undertaking, accept Draft(s), or negotiate against documents which appear on their
face to be in compliance with the terms and conditions of the Credit, the Issuing Bank
and the Confirming Bank, if any, are bound
i. to reimburse the Nominated Bank which has paid, incurred a deferred payment
undertaking, accepted Draft(s), or negotiated,
ii. to take up the documents.
b Upon receipt of the documents the Issuing Bank and/or the Confirming Bank, if any,
or a Nominated Bank acting on their behalf, must determine on the basis of the
documents alone whether or not they appear on their face to be in compliance with
the terms and conditions of the Credit. If the documents appear on their face not to
be in compliance with the terms and conditions of the Credit, such banks may refuse
to take up the documents.
c If the Issuing Bank determines that the documents appear on their face not to be in
compliance with the terms and conditions of the Credit, it may in its sole judgement
approach the Applicant for a waiver of the discrepancy(ies). This does not, however,
extend the period mentioned in sub. Article 13 (b).
d
i. If the Issuing Bank and/or Confirming Bank , if any, or a Nominated Bank
acting on their behalf, decides to refuse the documents, it must give notice to
that effect by telecommunication or, if that is not possible, by other
expeditious means, without delay but no later than the close of the seventh
banking day following the day of receipt of the documents. Such notice shall
be given to the bank from which it received the documents, or to the
Beneficiary, if it received the documents directly from him.
ii. Such notice must state all discrepancies in respect of which the bank refuses
the documents and must also state whether it is holding the documents at the
disposal of, or is returning them to, the presenter.
iii. The Issuing Bank and/or Confirming Bank, if any, shall then be entitled to
claim from the remitting bank refund, with interest, of any reimbursement,
which has been made to that bank.
e If the Issuing Bank and/or Confirming Bank, if any, fails to act in accordance with the
provisions of this Article and/or fails to hold the documents at the disposal of, or
return them to the presenter, the Issuing Bank and/or Confirming Bank, if any, shall
be precluded from claiming that the documents are not in compliance with the terms
and conditions of the Credit.
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f If the remitting bank draws the attention of the Issuing Bank and/or Confirming Bank,
if any, to any discrepancy(ies) in the document(s) or advises such banks that it has
paid, incurred a deferred payment undertaking, accepted Draft(s) or negotiated under
reserve or against an indemnity in respect of such discrepancy(ies), the Issuing Bank
and/or Confirming Bank, if any, shall not be thereby relieved from any of their
obligation under any provision of the Article. Such reserve or indemnity concerns
only the relations between the remitting bank and the party towards whom the reserve
was made, or from whom, or on whose behalf, the indemnity was obtained.
Article 15. Disclaimer on Effectiveness of Documents
Banks assume no liability or responsibility for the form, sufficiency, accuracy, genuineness,
falsification or legal effect of any document(s), or for the general and/or particular conditions
stipulated in the document(s) or superimposed thereon; nor do they assume any liability or
responsibility for the description, quantity, weight, quality, condition, packing, delivery,
value or existence of the goods represented by any document(s), or for the good faith or acts
and/or omissions, solvency, performance or standing of the consignors, the carriers, the
forwarders, the consignees or the insurers of the goods, or any other person whomsoever.
Article 16. Disclaimer on the Transmission of Messages
Banks assume no liability or responsibility for the consequences arising out of delay and/or
loss in transit of any message(s), letter(s) or document(s), or for delay, mutilation or other
error(s) arising in the transmission of any telecommunication. Banks assume no liability or
responsibility for errors in translation and/or interpretation of technical terms, and reserve the
right to transmit Credit terms without translating them.
Article 17. Force Majeure
Banks assume no liability or responsibility for the consequences arising out of the
interruption of their business by Acts of God, riots, civil commotion, insurrections, wars or
any other causes beyond their control, or by any strikes or lockouts. Unless specifically
authorised, banks will not, upon resumption of their business, pay, incur a deferred payment
undertaking, accept Draft(s) or negotiate under Credits, which expired during such
interruption of their business.
Article 18. Disclaimer for Acts of an Instructed Party
a Banks utilizing the services of another bank or other banks for the purpose of giving
effect to the instructions of the Applicant do so for the account and at the risk of such
Applicant.
b Banks assume no liability or responsibility should the instruction they transmit not be
carried out, even if they have themselves taken the initiative in the choice of such
other bank(s)
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c
i. A party instructing another party to perform services is liable for any charges,
including commissions, fees, costs or expenses incurred by the instructed party
in connection with its instructions.
ii. Where a Credit stipulates that such charge are for account of a party other than
the instructing party, and charges cannot be collected, the instructing bank
remains ultimately liable for the payment thereof.
d The Applicant shall be bound by and liable to indemnify the banks against all
obligations and responsibilities imposed by foreign laws and usages.
Article 19. Bank-to-Bank Reimbursement Arrangements
a If an Issuing Bank intends that the reimbursement to which a paying, accepting or
negotiating bank is entitled, shall be obtained by such bank (the `Claiming Bank'),
claiming on another party (the `Reimbursing Bank'), it shall provide such
Reimbursing Bank in good time with the proper instructions or authorisation to
honour such reimbursement claims.
b Issuing Banks shall not require a Claiming Bank to supply a certificate of compliance
with the terms and conditions of the Credit to the Reimbursing Bank.
c An Issuing Bank shall not be relieved from any of its obligations to provide
reimbursement if and when reimbursement is not received by the Claiming Bank from
the Reimbursing Bank.
d The Issuing Bank shall be responsible to the Claiming Bank for any loss of interest if
reimbursement is not provided by the Reimbursement Bank on first demand, or as
otherwise specified in the Credit, or mutually agreed, as the case may be.
e The Reimbursing Bank's charges should be for the account of the Issuing Bank.
However, in cases where the charges are for the account of another party, it is the
responsibility of the Issuing Bank to so indicate in the Original Credit and in the
reimbursement authorisation. In cases where the Reimbursing Bank's charges are for
the account of another party they shall be collected from the Claiming Bank when the
Credit is drawn under. In cases where the Credit is not drawn under, the Reimbursing
Bank's charges remain the obligation of the Issuing Bank.
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D. Documents
Article 20. Ambiguity as to the Issuers of Documents
a Terms such as `first class', `well known', `qualifieď, `independenť, `officiaľ,
`competenť, `locaľ and the like, shall not be used to describe the issuers of any
document(s) to be presented under the Credit. If such terms are incorporated in the
Credit, banks will accept the relative document(s) as presented, provided that it
appears on its face to be in compliance with the other terms and conditions of the
Credit and not to have been issued by the Beneficiary.
b Unless otherwise stipulated in the Credit, banks will also accept as an original
document(s), a document(s) produced or appearing too have been produced:
i. by reprographic, automated or computerized system
ii. as carbon copies
provided that it is marked as original and, where necessary, appears to be signed.
A document may be signed by handwriting, by facsimile signature, by perforated
signature, by stamp, by symbol, or by any other mechanical or electronic method of
authentication.
c
i. Unless otherwise stipulated in the Credit, banks will accept as a copy(ies), a
document(s) either labelled copy or not marked as an original ­ a copy(ies)
need not be signed.
ii. Credits that require multiple document(s) such as `duplicate', `two copies' and
the like, will be satisfied by the presentation of one original and remaining
number in copies except where the document itself indicates otherwise.
d Unless otherwise stipulated in the Credit, a condition under a Credit calling for a
document to be authenticated, validated, legalised, visaed, certified or indicating a
similar requirement, will be satisfied by any signature, mark, stamp or label on such
document that on its face appears to satisfy the above condition.
Article 21. Unspecified Issuers or Contents of Documents
When documents other than transport documents, insurance documents and commercial
invoices are called for, the Credit should stipulate by whom such documents are to be issued
and their wording or data content. If the Credit does not so stipulate, banks will accept such
documents as presented, provided that their data content is not inconsistent with any other
stipulated document presented.
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Article 22. Issuance Date of Documents v. Credit Date
Unless otherwise stipulated in the Credit, banks will accept a document bearing a date of
issuance prior to that of the Credit, subject to such document being presented within the time
limits set out in the Credit and in these Articles.
Article 23. Marine/Ocean Bill of Lading
a If a Credit calls for a bill of lading covering a port-to-port shipment, banks will, unless
otherwise stipulated in the Credit, accept a document, however named, which:
i. appears on its face to indicate the name of the carrier and to have been signed
or otherwise authenticated 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 or authentication of the carrier or master must be identified as a
carrier or master, as the case may be. An agent signing or authenticating for
the carrier or master must also indicate the name and the capacity of the party,
i.e. carrier or master, on whose behalf that agent is acting.
and
ii. indicates that the goods have been loaded on board, or shipped on a named
vessel.
Loading on board or shipment on a named vessel may be indicated by preprinted
wording on the bill of lading that the goods have been loaded on board
a named vessel or shipped on a named vessel, in which case the date of
issuance of the bill of lading will be deemed to be the date of loading on board
and the date of shipment.
In all other cases loading on board a named vessel must be evidenced by a
notation on the bill of lading which gives the date on which the goods have
been loaded on board, in which case the date of the on board notation will be
deemed to be the date of shipment.
If the bill of lading contains the indication `intended vesseľ, or similar
qualification in relation to the vessel, loading on board a named vessel must be
evidenced by an on board notation on the bill of lading which, in addition to
the date on which the goods have been loaded on board, also includes the
name of the vessel on which the goods have been loaded, even if they have
been loaded on the vessel named as the `intended vesseľ.
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If the bill of lading indicates a place of receipt or taking in charge different
from the port of loading, the on board notation must also include the port of
loading stipulated in the Credit and the name of the vessel on which the goods
have been loaded, even if they have been loaded on the vessel named in the
bill of lading. This provision also applies whenever loading on board the
vessel is indicated by pre-printed wording on the bill of lading.
and
iii. indicates the port of loading and the port of discharge stipulated in the Credit,
notwithstanding that it:
a indicates a place of taking in charge different from the port of loading,
and/or a place of final destination different from the port of discharge,
and/or
b contains the indication `intendeď or similar qualification in relation to
the port of loading and/or port of discharge, as long as the document
also states the ports of loading and/or discharge stipulated in the Credit,
and
iv. consists of a sole original bill of lading or, if issued in more than one original,
the full set as so issued,
and
v. appears to contain all the terms and conditions of carriage, or some of such
terms and conditions by reference to a source or document other than the bill
of lading (short form/blank back bill of lading); banks will not examine the
contents of such terms and conditions,
and
vi. contains no indication that it is subject to a charter party and/or no indication
that the carrying vessel is propelled by sail only,
and
vii. in all other respects meets the stipulations of the Credit.
b For the purpose of this article, transhipment means unloading and reloading from one
vessel to another vessel during the course of ocean carriage from the port of loading to
the port of discharge stipulated in the Credit.
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c Unless transhipment is prohibited by the terms of the Credit, banks will accept a bill
of lading, which indicates that the goods will be transhipped, provided that the entire
ocean carriage is covered by one and the same bill of lading.
d Even if the Credit prohibits transhipment, banks will accept a bill of lading which:
i. indicates that transhipment will take place as long as the relevant cargo is
shipped in Container(s), Trailer(s) and/or `LASH' barge(s) as evidenced by the
bill of lading, provided that the entire ocean carriage is covered by one and the
same bill of lading,
and/or
ii. incorporates clauses stating that the carrier reserves the right to tranship.
Article 24. Non-Negotiable Sea Waybill
a If a Credit calls for a non-negotiable sea waybill covering a port-to-port shipment,
banks will, unless otherwise stipulated in the Credit, accept a document, however
named, which:
i. appears on its face to indicate the name of the carrier and to have been signed
or otherwise authenticated by:
- the carrier or a named agent for and on behalf of the carrier, or
- the master or a named agent for and on behalf the master.
Any signature or authentication of the carrier or master must be identified as
carrier or master, as the case may be. An agent signing or authenticating for
the carrier or master must also indicate the name and the capacity of the party,
i.e. carrier or master, on whose behalf that agent is acting,
and
ii. indicates that the goods have been loaded on board, or shipped on a named
vessel.
Loading on board or shipment on a named vessel may be indicated by the preprinted
wording on the non-negotiable sea waybill that the goods have been
loaded on board a named vessel or shipped on a named vessel, in which case
the date of issuance of the non-negotiable sea waybill will be deemed to be the
date of loading on board and the date of shipment.
In all other cases loading on board a named vessel must be evidenced by a
notation on the non-negotiable sea waybill which gives the date on which the
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goods have been loaded on board, in which case the date of the on board
notation will be deemed to the date of shipment.
If the non-negotiable sea waybill contains the indication `intended vesseľ, or
similar qualification in relation to the vessel, loading on board a named vessel
must be evidenced by an on board notation on the non-negotiable sea waybill
which, in addition to the date on which the goods have been loaded on board,
includes the name of the vessel on which the goods have been loaded, even if
they have been loaded on the vessel named as the `intended vesseľ.
If the non-negotiable sea waybill indicates a place of receipt or taking in
charge different from the port of loading, the on board notation must also
include the port of loading stipulated in the Credit and the name of the vessel
on which the goods have been loaded, even if they have been loaded on a
vessel named in the non-negotiable sea waybill. This provision also applies
whenever loading on board the vessel is indicated by pre-printed wording on
the non-negotiable sea waybill,
and
iii. indicates the port of loading and the port of discharge stipulated in the Credit,
notwithstanding that it:
a indicates a place of taking in charge different from the port of loading,
and/or a place of final destination different from the port of discharge,
and/or
b contains the indication `intendeď or similar qualification in relation to
the port of loading and/or port of discharge, as long as the document
also states the ports of loading and/or discharge stipulated in the Credit,
and
iv. consists of a sole original non-negotiable sea waybill, or if issued in more than
one original, the full set as so issued,
and
v. appears to contain all of the terms and conditions of carriage, or some of such
terms and conditions by reference to a source or document other than the nonnegotiable
sea waybill (short form/blank back non-negotiable sea waybill);
banks will not examine the contents of such terms and conditions,
and
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vi. contains no indication that it is subject to a charter party and/or no indication
that the carrying vessel is propelled by sail only,
and
vii. in all other respects meets the stipulations of the Credit.
b For the purpose of this Article, transhipment means unloading and reloading from one
vessel to another vessel during the course of ocean carriage from the port of loading to
the port of discharge stipulated in the Credit.
c Unless transhipment is prohibited by the terms of the Credit, banks will accept a nonnegotiable
sea waybill, which indicates that the goods will be transhipped, provided
that the entire ocean carriage is covered by one and the same non-negotiable sea
waybill.
d Even if the Credit prohibits transhipment, banks will accept a non-negotiable sea
waybill which:
i. indicates that transhipment will take place as long as the relevant cargo is
shipped in Container(s), Trailer(s) and/or `LASH' barge(s) as evidenced by
the non-negotiable sea waybill, provided that the entire ocean carriage is
covered by one and the same non-negotiable sea waybill,
and/or
ii. incorporates clauses stating that the carrier reserves the right to tranship.
Article 25. Charter Party Bill of Lading
a If a Credit calls for or permits a charter party bill of lading, banks will, unless
otherwise stipulated in the Credit, accept a document, however named, which:
i. contains any indication that it is subject to a charter party,
and
ii. appears on its face to have been signed or otherwise authenticated 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.
Any signature or authentication of the master or the owner must be identified
as master or owner as the case may be. An agent signing or authenticating for
the master or owner must also indicate the name and the capacity of the party,
i.e. master or owner, on whose behalf that agent is acting,
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and
iii. does or does not indicate the name of the carrier,
and
iv. indicates that the goods have been loaded on board or shipped on a named
vessel.
Loading on board or shipment on a named vessel may be indicated by the preprinted
wording on the bill of lading that the goods have been loaded on board
a named vessel or shipped on a named vessel, in which case the date of
issuance of the bill of lading will be deemed to be the date of loading on board
and the date of shipment. In all other cases loading on board a named vessel
must be evidenced by a notation on the bill of lading which gives the date on
which the goods have been loaded on board, in which case the date of the on
board notation will be deemed to be the date of shipment,
and
v. indicates the port of loading and the port of discharge stipulated in the Credit,
and
vi. consists of a sole original bill of lading or, if issued in more than one original,
the full set as so issued,
and
vii. contains no indication that the carrying vessel is propelled by sail only,
and
viii. in all other respects meets the stipulations of the Credit.
b Even if the Credit requires the presentation of a charter party contract in connection
with a charter party bill of lading, banks will not examine such charter party contract,
but will pass it on without responsibility on their part.
Article 26. Multimodal Transport Document
a If a Credit calls for a transport document covering at least two different modes of
transport (multimodal transport), banks will, unless otherwise stipulated in the Credit,
accept a document which:
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i. appears on its face to indicate the name of the carrier or multimodal transport
operator and to have been signed or otherwise authenticated by:
- the carrier or multimodal transport operator or a named agent for and on
behalf the carrier or multimodal transport operator, or
- the master or a named agent for or on behalf of the master.
Any signature or authentication of the carrier, multimodal transport operator or
master must be identified as carrier, multimodal transport operator or master,
as the case may be. An agent signing or authenticating for the carrier,
multimodal transport operator or master must also indicate the name and the
capacity of the party, i.e. carrier, multimodal transport operator or master, on
whose behalf the agent is acting,
and
ii. indicates that the goods have been dispatched, taken in charge or loaded on
board. Dispatch, taking in charge or loading on board may be indicated by
wording to that effect on the multimodal transport document and the date of
issuance will be deemed to be the date of dispatch, taking in charge or loading
on board and the date of shipment. However, if the document indicates, by
stamp or otherwise, a date of dispatch, taking in charge or loading on board,
such date will be deemed to be the date of shipment,
and
iii.
a. indicates the place the place of taking in charge stipulated in the Credit
which may be different from the port, airport or place of loading, and
the place of final destination stipulated in the Credit which may be
different from the port, airport or place of discharge,
and/or
b contains the indication `intendeď or similar qualification in relation to
the vessel and/or port of loading and/or port of discharge,
and
iv. consists of sole original multimodal transport document or, if issued in more
than one original, the full set as so issued,
and
v. appears to contain all the terms and conditions of carriage, or some of such
terms and conditions by reference to a source or document other than the
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multimodal transport document (short form/blank back multimodal transport
document); banks will not examine the contents of such terms and conditions,
and
vi. contains no indication that it is subject to a charter party and/or no indication
that the carrying vessel is propelled by sail only,
and
vii. in all other respects meets the stipulations of the Credit.
b Even if the Credit prohibits transhipment, banks will accept a multimodal transport
document which indicates that transhipment will or may take place, provided that the
entire carriage is covered by one and the same multimodal transport document.
Article 27. Air Transport Document
a If a Credit calls for an air transport document banks will, unless otherwise stipulated
in the Credit, accept a document, however named, which:
i. appears on its face to indicate the name of the carrier and to have been signed
or otherwise authenticated by:
- the carrier, or
- the named agent for or on behalf of the carrier.
Any signature or authentication of the carrier must be identified as carrier. An
agent signing or authenticating for the carrier must also indicate the name and
the capacity of the party, i.e. the carrier, on whose behalf that agent is acting,
and
ii. indicates that the goods have been accepted for carriage,
and
iii. where the Credit calls for an actual date of dispatch, indicates a specific
notation of such date, the date of dispatch so indicated on the air transport
document will be deemed to be the date of shipment. For the purpose of this
Article, the information appearing in the box on the air transport document
(marked `For Carrier Use Only' or similar expression) relative to the flight
number and date will not be considered as a specific notation of such date of
dispatch.
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In all other cases, the date of issuance of the air transport document will be
deemed to be the date of shipment,
and
iv. indicates the airport of departure and the airport of destination stipulated in the
Credit,
and
v. appears to be the original for consignor/shipper even if the Credit stipulates a
full set of originals, or similar expressions,
and
vi. appears to contain all of the terms and conditions of carriage, or some of such
terms and conditions, by reference to a source or document other than the air
transport document; banks will not examine the contents of such terms and
conditions,
and
vii. in all other respects meets the stipulations of the Credit.
b For the purpose of this Article, transhipment means unloading and reloading from one
aircraft to another aircraft during the course of carriage from the airport of departure
to the airport of destination stipulated in the Credit.
c Even if the Credit prohibits transhipment, banks will accept an air transport document,
which indicates that transhipment will or may take place, provided that the entire
carriage is covered by one and the same air transport document.
Article 28. Road, Rail or Inland Waterway Transport Documents
a If a Credit calls for a road, rail, or inland waterway transport document, banks will,
unless otherwise stipulated in the Credit, accept a document of the type called for,
however named, which:
i. appears on its face to indicate the name of the carrier and to have been signed
or otherwise authenticated by the carrier or a named agent for or on behalf of
the carrier and/or to bear a reception stamp or other indication of receipt by the
carrier or a named agent for or on behalf of the carrier.
Any signature, authentication, reception stamp or other indication of receipt of
the carrier, must be identified on its face as that of the carrier. An agent
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signing or authenticating for the carrier must also indicate the name and the
capacity of the party, i.e. carrier, on whose behalf that agent is acting,
and
ii. indicates that the goods have been received for shipment, dispatch or carriage
or wording to this effect. The date of issuance will be deemed to be the date
of shipment unless the transport document contains a reception stamp, in
which case the date of the reception stamp will be deemed to be the date of
shipment,
and
iii. indicates the place of shipment and the place of destination stipulated in the
Credit,
and
iv. in all other respects meets the stipulations of the Credit.
b In the absence of any indication on the transport document as to the numbers issued,
banks will accept the transport document(s) presented as constituting a full set. Banks
will accept as original(s) the transport document(s) whether marked as original(s) or
not.
c For the purpose of this Article, transhipment means unloading and reloading from one
means of conveyance to another means of conveyance, in different modes of
transport, during the course of carriage from the place of shipment to the place of
destination stipulated in the Credit.
d Even if the Credit prohibits transhipment, banks will accept a road, rail or inland
waterway transport document which indicates that transhipment will or may take
place, provided that the entire carriage is covered by one and the same transport
document and within the same mode of transport.
Article 29. Courier and Post Receipts
a If a Credit calls for a post receipt or certificate of posting, banks will, unless otherwise
stipulated in the Credit, accept a post receipt or certificate of posting which:
i. appears on its face to have been stamped or otherwise authenticated and dated
in the place from which the Credit stipulates the goods are to be shipped or
dispatched and such date will be deemed to be the date of shipment of
dispatch,
and
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ii. in all other respects meets the stipulations of the Credit.
b If a Credit calls for a document issued by a courier or expedited delivery service
evidencing receipt of the goods for delivery, banks will, unless otherwise stipulated in
the Credit, accept a document, however named, which:
i. appears on its face to indicate the name of the courier/service, and to have
been stamped, signed or otherwise authenticated by such named
courier/service (unless the Credit specifically calls for a document issued by a
named Courier/Service, banks will accept a document issued by any
Courier/Service),
and
ii. indicates date of pick up or of receipt or wording to this effect, such date being
deemed to be the date of shipment or dispatch,
and
iii. in all other respects meets the stipulations of the Credit.
Article 30. Transport Documents Issued by Freight Forwarders
Unless otherwise authorised in the Credit, banks will only accept a transport document issued
by a freight forwarder if it appears on its face to indicate:
i. the name of the freight forwarder as a carrier or multimodal transport operator
and to have been signed or otherwise authenticated by the freight forwarder as
carrier or multimodal transport operator,
or
ii. the name of the carrier or multimodal transport operator and to have been
signed or otherwise authenticated by the freight forwarder as a named agent
for or on behalf of the carrier or multimodal transport operator.
Article 31. `On Deck', `Shipper's Load and Counť, Name of Consignor
Unless otherwise stipulated in the Credit, banks will accept a transport document which:
i. does not indicate, in the case of carriage by sea or by more than one means of
conveyance including carriage by sea that the goods are or will be loaded on
deck. Nevertheless, banks will accept a transport document which contains a
provision that the goods may be shipped on deck, provided that it does not
specifically state that they are or will be loaded on deck,
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and/or
ii. bears a clause on the face thereof such as `shipper's load and counť, or `said
by shipper to contain' or words of similar effect,
and/or
iii. indicates as the consignor of the goods a party other than the Beneficiary of
the Credit.
Article 32. Clean Transport Documents
a A clean transport document is one which bears no clause or notation which expressly
declares a defective condition of the goods and/or the packaging.
b Banks will not accept transport documents bearing such clauses or notations unless
the Credit expressly stipulates the clauses or notations which may be accepted.,
c Banks will regard a requirement in a Credit for a transport document to bear a clause
`clean on boarď as complied with if such transport document meets the requirements
of this Article and of Articles 23, 24, 25, 26, 27, 28 or 30.
Article 33. Freight Payable/Prepaid Transport Documents
a Unless otherwise stipulated in the Credit, or inconsistent with any of the documents
presented under the Credit, banks will accept transport documents stating that freight
or transportation charges (hereafter referred to as 'freighť) have still to be paid.
b If a Credit stipulates that the transport document has to indicate that freight has been
paid or prepaid, banks will accept a transport document on which words clearly
indicating payment or prepayment of freight appear by stamp or otherwise, or on
which payment or prepayment of freight is indicated by other means. If the Credit
requires courier charges to be paid or prepaid, banks will also accept a transport
document issued by a courier or expedited delivery service evidencing that courier
charges are for the account of a party other than the consignee.
c The words 'freight prepayable' or 'freight to be prepaiď or words of similar effect, if
appearing on transport documents, will not be accepted as constituting evidence of the
payment of freight.
d Banks will accept transport documents bearing reference by stamp or otherwise to
costs additional to the freight, such as cost of, or disbursements incurred in connection
with, loading, unloading or similar operations, unless the conditions of the Credit
specifically prohibit such reference..
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Article 34. Insurance Documents
a Insurance documents must appear on their face to be issued and signed by insurance
companies or underwriters or their agents.
b If the insurance document indicates that it has been issued in more than one original,
all the originals must be presented unless otherwise authorised in the Credit.
c Cover notes issued by brokers will not be accepted, unless specifically authorised in
the Credit.
d Unless otherwise stipulated in the Credit, banks will accept an insurance certificate or
a declaration under an open cover pre-signed by insurance companies or underwriters
or their agents. If a Credit specifically calls for an insurance certificate or a
declaration under an open cover, banks will accept, in lieu of thereof, an insurance
policy.
e Unless otherwise stipulated in the Credit, or unless it appears from the insurance
document that the cover is effective at the latest from the date of loading on board or
dispatch or taking in charge of the goods, banks will not accept an insurance
document which bears a date of issuance later than the date of loading on board or
dispatch or taking in charge as indicated in such transport document.
f
i. Unless otherwise stipulated in the Credit, the insurance document must be
expressed in the same currency as the Credit.
ii. Unless otherwise stipulated in the Credit, the minimum amount for which the
insurance document must indicate the insurance cover to have been effected is
the CIF (cost insurance and freight (...'named port of destination')) or CIP
(carriage and insurance paid to (...'named place of destination')) value of the
goods, as the case may be, plus 10%, but only when the CIF or CIP value can
be determined from the documents on their face. Otherwise, banks will
accept as such minimum amount 110% of the amount for which payment,
acceptance or negotiation is requested under the Credit, or 110% of the gross
amount of the invoice, whichever is the greater.
Article 35. Type of Insurance Cover
a Credits should stipulate the type of insurance required and, if any, the additional risks
which are to be covered. Imprecise terms such as 'usual risks' or 'customary risks'
shall not be used; if they are used, banks will accept insurance documents as
presented, without responsibility for any risks not being covered.
b Failing specific stipulations in the Credit, banks will accept insurance documents as
presented, without responsibility for any risks not being covered.
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c Unless otherwise stipulated in the Credit, banks will accept an insurance document,
which indicates that the cover is subject to a franchise or an excess (deductible).
Article 36. All Risks Insurance Cover
Where a Credit stipulates 'insurance against all risks', banks will accept an insurance
document which contains any 'all risks' notation or clause, whether or not bearing the
heading 'all risks', even if the insurance document indicates that certain risks are excluded,
without responsibility for any risk(s) not being covered.
Article 37. Commercial Invoices
a Unless otherwise stipulated in the Credit, commercial invoices
i. must appear on their face to be issued by the Beneficiary named in the Credit
(except as provided in Article 48),
and
ii. must be made out in the name of the Applicant (except as provided in subArticle
48 (h)),
and
iii. need not be signed.
b Unless otherwise stipulated in the Credit, banks may refuse commercial invoices
issued or amounts in excess of the amount permitted by the Credit. Nevertheless, if a
bank authorised to pay, incur a deferred payment undertaking, accept Draft(s), or
negotiate under a Credit accepts such invoices, its decision will be binding upon all
parties, provided that such bank has not paid, incurred a deferred payment
undertaking, accepted Draft(s) or negotiated for an amount in excess of that permitted
by the Credit.
c The description of the goods in the commercial invoice must correspond with the
description in the Credit. In all other documents, the goods may be described in
general terms not inconsistent with the description of the goods in the Credit.
Article 38. Other Documents
If a Credit calls for an attestation or certification of weight in the case of transport other than
by sea, banks will accept a weight stamp or declaration of weight, which appears to have
been superimposed on the transport document unless the Credit specifically stipulates that the
attestation or certification of weight must be by means of a separate document.
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E. Miscellaneous Provisions
Article 39. Allowance in Credit Amount, Quantity and Unit Price
a The words 'abouť, approximately', 'circa' or similar expressions 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 difference not to exceed 10% more or 10% less than the
amount or the quantity or the unit price to which they refer.
b Unless a Credit stipulates that the quantity of the goods specified must not be
exceeded or reduced, a tolerance of 5% more or 5% less will be permissible, always
provided that the amount of the drawings does not exceed the amount of the Credit.
This tolerance does not apply when the Credit stipulates the quantity in terms of a
stated number of packing units or individual items.
c Unless a Credit which prohibits partial shipments stipulates otherwise, or unless sub
Article (b) above is applicable, a tolerance of 5% less in the amount of the drawing
will be permissible, provided that if the Credit stipulates the quantity of the goods,
such quantity of goods is shipped in full, and if the Credit stipulates a unit price, such
price is not reduced. This provision does not apply when expressions referred to in
sub-Article (a) above are used in the Credit.
Article 40. Partial Shipments/Drawings
a Partial drawings and/or shipments are allowed, unless the Credit stipulates otherwise.
b Transport documents which appear on their face to indicate that shipment has been
made on the same means of conveyance and for the same journey, provided they
indicate the same destination, will not be regarded as covering partial shipments, even
if transport documents indicate different dates of shipment and/or different ports of
loading, places of taking in charge, or despatch.
c Shipment made by post or by courier will be regarded as partial shipments if the post
receipts or certificates of posting or courier's receipts or dispatch notes appear to have
been stamped, signed or otherwise authenticated in the place from which the Credit
stipulates the goods are to be dispatched, and on the same date.
Article 41. Instalment Shipments/Drawings
If drawings and/or shipments by instalments within given periods are stipulated in the Credit
and any instalment is not drawn and/or shipped within the period allowed for that instalment,
the Credit ceases to be available for that any subsequent instalments, unless otherwise
stipulated in the Credit.
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Article 42. Expiry Date and Place for Presentation of Documents
a All Credits must stipulate an expiry date and a place for presentation of documents for
payment, acceptance, or with the exception of freely negotiable Credits, a place for
presentation of documents for negotiation. An expiry date stipulated for payment
acceptance or negotiation will be construed to express an expiry date for presentation
of documents.
b Except as provided in sub-Article 44(a), documents must be presented on or before
such expiry date.
c If an Issuing Bank states that the Credit is to be available `for one month', `for six
months', or the like, but does not specify the date from which the time is to run, the
date of issuance of the Credit by the Issuing Bank will be deemed to the first day from
which such time is to run. Banks should discourage indication of the expiry date of
the Credit in this manner.
Article 43. Limitation on the Expiry Date
a In addition to stipulating an expiry date for presentation of documents, every Credit
which calls for transport document(s) should also stipulate a specified period of time
after the date of shipment during which presentation must be made in compliance with
the terms and conditions of the Credit. If no such period of time is stipulated, banks
will not accept documents presented to them later than 21 days after the date of
shipment. In any event, documents must be presented not later than the expiry date of
the Credit.
b In cases in which sub-Article 40(b) applies, the date of shipment will be considered to
be the latest shipment date on any of the transport documents presented.
Article 44. Extension of Expiry Date
a If the expiry date of the Credit and/or the last day of the period of time for
presentation of documents stipulated by the Credit or applicable by virtue of Article
43 falls on a day on which the bank to which presentation has to be made is closed for
reasons other than those referred to in Article 17, the stipulated expiry date and/or the
last day of the period of time after the date of shipment for presentation of documents,
as the case may be, shall be extended to the first following day on which such bank is
open.
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b The latest date for shipment shall not be extended by reason of the extension of the
expiry date and/or the period of time after the date of shipment for presentation of
documents in accordance with sub-Article (a) above. If no such latest date of
shipment is stipulated in the Credit or amendments thereto, banks will not accept
transport documents indicating a date of shipment later than the expiry date stipulated
in the Credit or amendments thereto.
c The bank to which presentation is made on such first following business day must
provide a statement that the documents were presented within the time limits extended
in accordance with sub-Article 44(a) of the Uniform Customs and Practice for
Documentory Credits, 1993 Revision, ICC Publication No. 500.
Article 45. Hours of Presentation
Banks are under no obligation to accept presentation of documents outside their banking
hours.
Article 46. General Expressions as to Dates for Shipment
a Unless otherwise stipulated in the Credit, the expression `shipmenť used in stipulating
an earliest and/or a latest date for shipment will be understood to include expressions
such as, `loading on boarď, `dispatch', `accepted for carriage', `date of post receipť,
`date of pick-up', and the like, and in the case of a Credit calling for a multimodal
transport document the expression `taking in charge'.
b Expressions such as `prompť, `immediately', `as soon as possible', and the like
should not be used. If they are used banks will disregard them
c If the expression `on or abouť or similar expressions are used, banks will interpret
them a stipulated that shipment is to be made during the period from five days before
to five days after the specified date, both end days included.
Article 47. Date Terminology for Periods of Shipment
a The words `to', `untiľ, `tilľ, `from' and words of similar import applying to any date
or period in the Credit referring to shipment will be understood to include the date
mentioned.
b The word `after' will be understood to exclude the date mentioned.
c The terms `first half', `second half' of a month shall be construed respectively as the
1st
to the 15th
, and the 16th
to the last day of such month, all dates inclusive.
d the terms `beginning', `middle', or `enď 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 such month, all
dates inclusive.
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F. Transferable Credit
Article 48. Transferable Credit
a A transferable Credit is a Credit under which the Beneficiary (first Beneficiary) may
request the bank authorised to pay, incur a deferred payment undertaking, accept or
negotiate (the `Transferring Bank'), or in the case of a freely negotiable Credit, the
bank specifically authorised in the Credit as a Transferring Bank, to make the Credit
available in whole or in part to one or more other Beneficiary(ies) (Second
Beneficiary(ies)).
b A Credit can be transferred only if it is expressly designated as `transferable' by the
Issuing Bank. Terms such as `divisible', `fractionable', `assignable', and
`transmissible' do not render the Credit transferable. If such terms are used they shall
be disregarded.
c The Transferring Bank shall be under no obligation to affect such transfer except to
the extent and in the manner expressly consented to by such bank.
d At the time of making a request for transfer and prior to transfer of the Credit the First
Beneficiary must irrevocably instruct the Transferring Bank whether or not he retains
the right to refuse to allow the Transferring Bank to advise amendments to the Second
Beneficiary(ies). If the Transferring Bank consents to the transfer under these
conditions, it must, at the time of transfer, advise the Second Beneficiary(ies) of the
First Beneficiary's instructions regarding amendments.
e If a Credit is transferred to more than one Second Beneficiary(ies), refusal of an
amendment by one or more Second Beneficiary(ies) does not invalidate the
acceptance(s) by the other Second Beneficiary(ies) with respect to them the Credit
will be amended accordingly. With respect to the Second Beneficiary(ies) who
rejected the amendment the Credit will remain unamended..
f Transferring Bank charges in respect of transfers including commissions, fees, costs
or expenses are payable by the First Beneficiary, unless otherwise agreed. If the
Transferring Bank agrees to transfer the Credit it shall be under no obligation to affect
the transfer until such charges are paid.
g Unless otherwise stated in the Credit, a transferable Credit can be transferred once
only, consequently, the Credit cannot be transferred at the request of the Second
Beneficiary to any subsequent Third Beneficiary. For the purpose of this Article, a
retransfer to the First Beneficiary does not constitute a prohibited transfer.
Fractions of a transferable Credit (not exceeding in the aggregate the amount of the
Credit) can be transferred separately, provided partial shipments/drawings are not
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prohibited, and the aggregate of such transfers will be considered as constituting only
one transfer of the Credit.
h The Credit can be transferred only on the terms and conditions specified in the
original Credit, with the exception of
- the amount of the Credit
- the unit price stated therein,
- the expiry date,
- the last date for presentation of documents in accordance with Article 43
- the period for shipment
any or all of which may be reduced or curtailed.
The percentage for which insurance cover must be affected may be increased in such a
way as to provide the amount of cover stipulated in the original Credit or these
Articles
In addition, the name of the First Beneficiary can be substituted for that of the
Applicant, but if the name of the Applicant is specifically required by the original
Credit to appear in any document(s) other than the invoice, such requirement must be
fulfilled.
i The first Beneficiary has the right to substitute his own invoice(s) (and Draft(s)) for
those of the Second Beneficiary(ies), for the amounts not in excess of the original
amount stipulated in the Credit and for the original unit prices if stipulated in the
Credit, and upon such substitution of invoice(s) (and Draft(s)) the First Beneficiary
can draw under the Credit for the difference, if any, between his invoice(s) and the
Second Beneficiary's(ies') invoice(s).
When a Credit has been transferred and the First Beneficiary is to supply his own
invoice(s) and Draft(s)) in exchange for the Second Beneficiary's(ies') invoice(s) (and
Draft(s)) but fails to do so on first demand, the Transferring Bank has the right to
deliver to the Issuing Bank the documents received under the transferred Credit,
including the Second Beneficiary's(ies') invoice(s) (and Draft(s)) without further
responsibility to the First Beneficiary.
j The First Beneficiary may request that payment or negotiation be effected to the
Second Beneficiary(ies) at the place to which the Credit has been transferred up to and
including the expiry date of the Credit, unless the original Credit expressly states that
it may not be made available for payment or negotiation at a place other than that
stipulated in the Credit. This is without prejudice to the First Beneficiary's right to
substitute subsequently his own invoice(s) (and Draft(s)) for those of the Second
Beneficiary(ies) and to claim any difference due to him.
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G. Assignment of Proceeds
Article 49. Assignment of Proceeds
The fact that a Credit is not stated to be transferable shall not affect the Beneficiary's right to
assign any proceeds to which he may be, or may become, entitled under such Credit, in
accordance with the provisions of the applicable law. This Article relates only to the
assignment of proceeds and not to the assignment of the right to perform under the Credit
itself.
Source: The International Chamber of Commerce (ICC), Paris ­
ICC Uniform Customs and Practice for Documentary Credits ­ 1993 Revision,
ICC Publication No. 500
No responsibility for any errors.
Gustav Mohn, Letter of Credit Consultant