TRADE FINANCE DOCUMENTARY CREDIT UCPDC -EXPLANATION OF

CRITICAL ARTICLES PART I

Article Relevant quote Description
Article Credits
VS A credit (LC) by nature is
4
contracts
a separate transaction
from the sale or other
contract on which it may
be used

Article Documents VS
5
goods, services
or
performance

Banks
deals
with
documents and not with
goods,
services
or
performance to which
the documents may
relate

Remarks, if any
Undertaking of a bank
to honor, to negotiate
or fulfill any other
obligation under the
credit is not subject to
terms of the sale
contract
Banks are not bound by
any dispute in respect
of the quantity or
quantity of goods/
services

Article Issuing Bank Provided

that
the
7
Undertaking
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
sight
payment,
deferred
payment or acceptance
with the issuing bank
Article Advising
of By advising the credit or
9
Credits
and amendment,
the
Amendments advising bank signifies
that it has satisfied itself
as
to
theapparent
authenticity of the credit

Issuing Bank is not

bound by any other
consideration/
instruction from parties
to the LC

By advising the LC, the

advising bank signifies
that it has satisfied
itself as to the apparent
authority of the LC/
amendments;

Article Amendments
10

or amendment and that

the advice accurately
reflects
the
terms
andconditions of the
credit or amendment
received;
The
advising
bank
cannot be changed
A bank utilizing the midcourse subsequent
services of an advising to
issue
of
LC/
bank or second advising amendment unless and
bank to advise a credit otherwise the advising
must use thesame bank bank choose not to do
to
advise
any so
amendment thereto.
Except as otherwise An issuing bank is
provided by article 38, a irrevocably bound by an
credit can neither be amendment as of the
amended nor cancelled time it issues the
without theagreement amendment

of the issuing bank, the

confirming bank, if any, The beneficiary should
and the beneficiary
give notification of
acceptance or rejection
Aconfirming bank may of an amendment.
extend its confirmation
to an amendment and If the beneficiary fails
will
be
irrevocably to
give
such
bound as of the timeit notification,
a
advises the Amendment. presentationthat
complies
with
the
A confirming bank may, credit and to any not
however, choose to yet
accepted
advise an amendment amendment will be
withoutextending
its deemed
to
be
confirmation and, if so, it notification of
must inform the issuing acceptance by the
bank without delay and beneficiary of such
inform thebeneficiary in amendment.

its advice.
Article Standard for A nominated bank acting
14
Examination of on its nomination, a
Documents
confirming bank, if any,
and the issuing bank
shall
eachhave
a
maximum
of
five
banking days following
the day of presentation
to determine if a
presentation
iscomplying
Article Complying
When an issuing bank/
15
Presentation
advising
bank/
negotiating
bank/
nominated
bank
determines
that
a
presentation
is
complying,
it
must

Failure to do so will
render the documents
to be in order and the
banks involved need to
honour the documents
as if they are complying
documents

Advising
bank/
negotiating
bank/
nominated
bank/
confirming Bank shall
pay,
accept
and
forward the documents
to the issuing bank with

honour.
Article Discrepant
When an issuing bank
16
Documents,
determines
that
a
Waiver
and presentation does not
Notice
comply, it may, in its
sole
judgement,approach the
applicant for a waiver of
the discrepancies.

a certification.
When a nominated
bank acting on its
nomination,
a
confirming bank, if any,
or the issuing bank
decidesto refuse to
honour or negotiate, it
must give a single
notice to that effect to
This does not, however, the presenter;
extend
the
periodmentioned
in If an issuing bank or a
Article 14
confirming bank fails to
act in accordance with
the provisions of this
article,
it
shallbe
precluded
from
claiming
that
the

documents do not
constitute a complying
presentation.
Article Insurance
When the insurance
28
document and document indicates that
coverage
it has been issued in
more than one original
all originals must be
presented
An insurance policy, an
insurance certificate or a
declaration under an
open cover is acceptable
Date
of
insurance
document should not be
later than the date of

Article Expiry date of

29
a credit or the
last day for
presentation
of documents
for negotiation

shipment
unless
it
appears
from
the
insurance document that
the insurance cover is
effective not later than
the date of shipment
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,
(Public
Holidays
or
Sundays) the expiry date
orthe last day for
presentation, as the case
may be, will be extended

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;
The latest

date

for

to the first following shipment will not be

banking day.
extended as a result of
sub-article 29 (a)
Article Force Majeure A bank assumes no A bank will not, upon
36
liability or responsibility resumption
of
its
for the consequences business, honour or
arising out of the negotiate under a
interruption
of
its credit that expired
business by Acts of God, during such
riots, civil commotions, Interruption
of
its
insurrections, wars, acts business.
of terrorism, or by any
strikes or lockouts or any
other causes beyond its
control.