UCP 600
and Its Legal Aspects
Dr. Ramlan Ginting
2013
Letter of Credit
bank obligation to pay
agency contract
Issuing Bank
Correspondent
Bank
L/C
contract to
issue L/C
L/C advice
sales contract
Buyer
Seller
shipment
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
2
Status of the UCP 600




A set of contractual rules
Universal acceptance by practitioners (uniformity in
practice)
The most successful set of private rules for trade
The sixth revision
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
3
Application of UCP
under UCP 600, Article 1
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
Credit = L/C
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
4
Meaning of Honour
under UCP 600, Article 2





To pay at sight
To incur a deferred payment undertaking and pay at
maturity
To accept a bill of exchange drawn by the
beneficiary and pay at maturity
Payment on deferred payment undertaking could be
based on the Law on Promissory Note
Payment by acceptance is in compliance with the
Law on Bill of Exchange, not the UCP
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
5
Meaning of Negotiation
under UCP 600, Article 2, cont…

The purchase by the nominated bank of draft
(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

The purchase of a draft is in compliance with the
Law on Bill of Exchange, not the UCP
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
6
Independent Contracts Rule
under UCP 600, Article 4

L/C is a separate transaction from the sale or other
contract

The undertaking of a bank to honour, to negotiate
or to fulfill any other obligation under the L/C is not
subject to claims or defenses by the applicant
resulting from its relationships with the issuing bank
or the beneficiary
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
7
Independent Contracts Rule
under UCP 600, Article 4, cont…

A beneficiary can in no case avail itself of the
contractual relationships existing between banks or
between the applicant and the issuing bank

The Independent Contracts Rule is also in
compliance with the Law on Letter of Credit
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
8
Document Compliance Rule
under UCP 600, Article 5
Banks deal with documents and not with goods,
services or performance to which the documents
may relate



Doctrine of Not In Contradiction
(the UCP 600)
Doctrine of In Compliance
(the UCP 500)
Doctrine of Strict Compliance
(the Law on Letter of Credit)
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
9
Availability of L/C
under UCP 600, Article 6

L/C must state the bank with which it is available, or
L/C may be available with any bank

L/C available with a nominated bank is also
available with the issuing bank
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
10
Expiry Date for Presentation
under UCP 600, Article 6, cont…

L/C 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
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
11
Place for Presentation
under UCP 600, Article 6, cont…

The place of the bank with which the L/C is
available is the place for presentation

The place for presentation under L/C available with
any bank is that of any bank

The place of presentation is also the place of the
issuing bank
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
12
Issuing Bank Undertaking
under UCP 600, Article 7


The issuing bank must honour a complying
presentation if the credit is available by sight
payment, deferred payment or acceptance with the
issuing bank
The issuing bank must honour if the credit is
available by sight payment, deferred payment,
acceptance or negotiation with a nominated bank
and that nominated bank does not perform its
nomination
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
13
Issuing Bank Undertaking
under UCP 600, Article 7, cont…

Issuing bank is irrevocably bound to honour as of
the time it issues the L/C

Issuing bank undertakes to reimburse a nominated
bank that has honoured or negotiated a complying
presentation and forwarded the documents to the
issuing bank
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
14
Issuing Bank Undertaking
under UCP 600, Article 7, cont…

Reimbursement under the L/C available by
acceptance or deferred payment is due at maturity,
whether or not the nominated bank prepaid or
purchased before maturity

Issuing bank’s undertaking to reimburse a
nominated bank is independent of the issuing
bank’s undertaking to the beneficiary
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
15
Confirming Bank Undertaking
under UCP 600, Article 8


Confirming bank must honour a complying
presentation if L/C is available by sight payment,
deferred payment or acceptance with the confirming
bank
Confirming bank must honour a complying
presentation if L/C is available by sight payment,
deferred payment, acceptance or negotiation with
another nominated bank and that nominated bank
does not perform its nomination
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
16
Confirming Bank Undertaking
under UCP 600, Article 8, cont…

Confirming bank must negotiate a complying
presentation, without recourse, if the L/C is
available by negotiation with the confirming bank

Confirming bank is irrevocably bound to honour or
negotiate as of the time it adds its confirmation to
the L/C

Confirming bank undertakes to reimburse another
nominated bank that has honoured or negotiated a
complying presentation and forwarded the
documents to the confirming bank
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
17
Confirming Bank Undertaking
under UCP 600, Article 8, cont…

Reimbursement under the L/C available by
acceptance or deferred payment is due at maturity,
whether or not another nominated bank prepaid or
purchased before maturity

Confirming bank’s undertaking to reimburse another
nominated bank is independent of the confirming
bank’s undertaking to the beneficiary
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
18
Advising of L/C and Amendment
under UCP 600, Article 9




L/C and its amendment may be advised to a
beneficiary through an advising bank
Advising bank advises the L/C and its amendment
without any undertaking to honour or negotiate
Advising bank could be as confirming bank
Advising bank signifies that it has satisfied itself as
to the apparent authenticity of the L/C or
amendment and that the advice accurately reflects
the terms and conditions of the L/C or amendment
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
19
Advising of L/C and Amendment
under UCP 600, Article 9, cont…

Advising bank may utilize the services of second
advising bank to advise the L/C and any
amendment to the beneficiary

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
L/C or amendment
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
20
Advising of L/C and Amendment
under UCP 600, Article 9, cont…

The advising bank that cannot satisfy itself as to the
apparent authenticity of the L/C, the amendment or
the advice, must so inform, without delay, the bank
from which the instructions appear to have been
received. If the advising bank elects to advise the
L/C or amendment, it must inform the beneficiary
(or second advising bank) that it has not been able
to satisfy itself.
Amendments
under UCP 600, Article 10




L/C can neither be amended nor cancelled without
the agreement of the issuing bank, the confirming
bank, and the beneficiary
A confirming bank may extend its confirmation to an
amendment
The beneficiary is required to communicate its
acceptance of the amendment to the bank that
advised such amendment by notification of
acceptance or rejection
A bank that advises an amendment should inform
the bank from which it received the amendment of
any notification of acceptance or rejection
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
22
Teletransmitted and Pre-Advised Credits and
Amendments
under UCP 600, Article 11

An authenticated teletransmission of L/C or
amendment will be deemed to be the operative L/C
or amendment, except the teletransmission states
others

A pre-advice of L/C or amendment shall only be
sent if the issuing bank is prepared to issue the
operative L/C or amendment
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
23
Nomination
under UCP 600, Article 12



Nominated bank may honour or negotiate a
complying presentation, but confirming bank as a
nominated bank must honour or negotiate
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
Banco Santander SA vs Banque Paribas
is the basis of rule for discounting the deferred
payment undertaking
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
24
Bank-to-Bank Reimbursement
under UCP 600, Article 13

L/C may state that reimbursement is to be obtained by
a nominated bank claiming on reimbursing bank. In
this regard, the L/C 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 L/C

If the L/C does not state that reimbursement is subject
to the ICC Rules for Bank-to-Bank Reimbursements,
then Article 13b of the UCP 600 that stipulates
reimbursement shall apply
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
25
Bank-to-Bank Reimbursement
under UCP 600, Article 13, cont…

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
Standard for Examination of Documents
under UCP 600, Article 14

Nominated bank, confirming bank, and issuing bank
must examine a presentation to determine a
complying presentation under ‘on their face’ rule.

Nominated bank, confirming bank, and issuing bank
shall each have a maximum of five banking days
following the day of presentation to determine a
complying presentation.
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.
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
27
Standard for Examination of Documents
under UCP 600, Article 14, cont…

Presentation must be made by or on behalf of the
beneficiary not later than 21 calendar days after the
date of shipment, but not later than the expiry date
of the L/C
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
28
Standard for Examination of Documents
under UCP 600, Article 14, cont…

Data in a document, when read in context with the
L/C, 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 L/C

In documents other than the commercial invoice,
the description of the goods, services or
performance may be in general terms not conflicting
with their description in the L/C
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
29
Standard for Examination of Documents
under UCP 600, Article 14, cont…

A document may be dated prior to the issuance
date of the L/C, but must not be dated later than its
presentation date
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
30
Standard for Examination of Documents
under UCP 600, Article 14, cont…

The addresses of the beneficiary and the applicant
in any document need not be the same as those in
the L/C or other document, but must be within the
same country as the respective addresses in the
L/C

The shipper or consignor of the goods need not be
the beneficiary
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
31
Complying Presentation
under UCP 600, Article 15

Issuing bank must honour a complying presentation

Confirming bank must honour or negotiate a
complying presentation and forward the documents
to the issuing bank

Nominated bank that honours or negotiates a
complying presentation must forward the
documents to the confirming bank or issuing bank
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
32
Discrepant Documents, Waiver and Notice
under UCP 600, Article 16

Nominated bank, confirming bank, or issuing bank
may refuse to honour or negotiate a non-complying
presentation

Issuing bank may, in its sole judgment, approach
the applicant for a waiver of discrepancy
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
33
Discrepant Documents, Waiver and Notice
under UCP 600, Article 16, cont…

Nominated bank, confirming bank or issuing bank
that decides to refuse to honour or negotiate a
non-complying presentation must give a single
notice to that effect to the presenter no later than
the close of the fifth banking day following the day
of presentation
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
34
Discrepant Documents, Waiver and Notice
under UCP 600, Article 16, cont…

Single notice, must state:
a. a bank is refusing to honour or negotiate, and
b. discrepancy as the basis of the refusal of the
bank, and
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
35
Discrepant Documents, Waiver and Notice
under UCP 600, Article 16, cont…
c. a bank is holding the documents pending
further instructions from the presenter; or the
issuing bank is holding the documents untill
receiving a waiver from the applicant and
agreeing to accept it, or receiving further
instructions from the presenter prior to agreeing
to accept a waiver; or the bank is returning the
documents; or the bank is acting in accordance
with instructions previously received from the
presenter
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
36
Discrepant Documents, Waiver and Notice
under UCP 600, Article 16, cont…

Issuing bank or confirming bank that fails to act in
accordance with the provisions of Article 16 of the
UCP 600, shall be precluded from claiming that the
documents do not constitute a complying
presentation
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
37
Discrepant Documents, Waiver and Notice
under UCP 600, Article 16, cont…

Issuing bank that refuses to honour or confirming
bank that refuses to honour or negotiate and has
given notice to that effect in accordance with the
provision of Article 16 of the UCP 600, shall be
entitled to claim a refund, with interest, of any
reimbursement made
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
38
Original Documents and Copies
under UCP 600, Article 17

At least one original of each document must be
presented

Requirement of the copy of documents is fulfilled by
presentation of either originals or copies

Requirement of multiple documents (in duplicate, in
two fold, in two copies) is fulfilled by the
presentation of at least one original and the
remaining number in copies, except when the
document itself indicates otherwise.
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
39
Commercial Invoice
under UCP 600, Article 18

Commercial invoice must appear to have been
issued by the beneficiary (except in case of
transferable L/C), must be made out in the name of
the applicant (except in case of transferable L/C),
must be made out in the same currency as the L/C,
and need not be signed
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
40
Commercial Invoice
under UCP 600, Article 18, cont…

Nominated bank, confirming bank, or issuing bank
may accept a commercial invoice issued for an
amount in excess of the amount permitted by the
L/C, provided the bank in question has not
honoured or negotiated for an amount in excess of
that permitted by the L/C

Description of the goods, services or performance
in a commercial invoice must correspond with that
appearing in the L/C
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
41
Transport Document
under UCP 600, Articles 19, 20, and 21







Indication of the name of the carrier
Be signed by the carrier, master, or agent
Signature must be identified
No name of master needed when the agent signed
Sole original transport document, or full set
No indication subject to a charter party
Indication of transhipment
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
42
Transport Document
under UCP 600, Articles 22





Indication of a charter party
Be signed by the master, owner, charterer, or agent
Signature must be identified
Indication of the name of the owner or charterer
needed when the agent signed
Sole original charter party bill of lading, or full set
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
43
Transport Document
under UCP 600, Articles 23






Indication of the name of the carrier
Be signed by the carrier or agent
Signature must be identified
Sole original transport document, or full set
The original for consignor or shipper
Indication of transhipment
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
44
Transport Document
under UCP 600, Articles 24





Indication of the name of the carrier
Be signed by the carrier or agent
Signature must be identified
Sole original transport document, or full set
Indication of transhipment
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
45
Transport Document
under UCP 600, Articles 25
Courier receipt
 Indication of the name of the courier service
 Be stamped or signed by the named courier service
Post receipt or certificate of posting
 Be stamped or signed
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
46
“On Deck”, “Shipper’s Load and Count”, “Said by
Shipper to Contain” and Charges Additional to Freight
under UCP 600, Articles 26

A transport document must not indicate that the
goods are or will be loaded on deck

A transport document bearing a clause such as
“shipper’s load and count” and “said by shipper to
contain” is acceptable

A transport document may bear a reference, by
stamp or otherwise, to charges additional to the
freight
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
47
Insurance Document and Coverage
under UCP 600, Article 28

Insurance document, such as an insurance policy,
an insurance certificate or a declaration under open
cover, must appear to be issued and signed by an
insurance company, an underwriter or their agents
or their proxies

When the insurance document indicates that it has
been issued in more than one original, all originals
must be presented
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
48
Insurance Document and Coverage
under UCP 600, Article 28, cont…

Cover note will not be accepted

The date of the insurance document must be no
later than the date of shipment
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
49
Insurance Document and Coverage
under UCP 600, Article 28, cont…

The insurance document must indicate the amount
of insurance coverage and be in the same currency
as the L/C

If there is no indication in the L/C of the insurance
coverage, the amount of insurance coverage must
be at least 110% of the CIF or CIP value of the
goods
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
50
Insurance Document and Coverage
under UCP 600, Article 28, cont…

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 L/C
Extention of Expiry Date or Last Day for Presentation
under UCP 600, Article 29

The expiry date of L/C or the last day for
presentation that falls on a day when the bank to
which presentation is to be made is closed, the
expiry date or the last day for presentation will be
extended to the first following banking day.
However, the latest date for shipment will not be
extended
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
52
Tolerance in Credit Amount, Quantity and Unit Prices
under UCP 600, Article 30


The words “about” or “approximately” used in
connection with the amount or the quantity or the
unit price in the L/C are to be construed as allowing
a tolerance not to exceed 10% more or less to
which they refer
A tolerance not to exceed 5% more or less than the
quantity allowed, provided the total amount of the
drawings does not exceed the amount of the L/C
and the L/C does not state a stipulated number of
packing units or individual items
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
53
Tolerance in Credit Amount, Quantity and Unit Prices
under UCP 600, Article 30, cont…

Even when partial shipments are not allowed, a
tolerance not to exceed 5% less than the amount of
the L/C is allowed, provided the full quantity of the
goods is shipped and a unit price is not reduced.
However, this tolerance does not apply when the
L/C stipulates a specific tolerance.
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
54
Partial Drawings or Shipments
under UCP 600, Article 31


Partial drawings or shipments are allowed
Partial shipments versus non-partial shipments
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
55
Instalment Drawings or Shipments
under UCP 600, Article 32

If a drawing or shipment by instalments within given
periods is stipulated in the L/C and any instalment
is not drawn or shipped within the period allowed for
that instalment, the L/C ceases to be available for
that and any subsequent instalment
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
56
Hours of Presentation
under UCP 600, Article 33

A bank has no obligation to accept a presentation
outside of its banking hours
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
57
Disclaimer on Effectiveness of Documents
Under UCP 600, Article 34

A bank assume 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;
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
58
Disclaimer on Effectiveness of Documents
Under UCP 600, Article 34, cont…

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

Fraud or Injunction is settled under the Law on
Letter of Credit
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
59
Disclaimer on Transmission and Translation
under UCP 600, Article 35

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 L/C, or when the bank
may have taken the initiative in the choice of
delivery service in the absence of such instructions
in the L/C
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
60
Disclaimer on Transmission and Translation
under UCP 600, Article 35, cont…


If a nominated bank determines that a presentation
is complying and forwards the documents to the
issuing bank or confirming bank, the issuing bank or
confirming bank must honour or negotiate, or
reimburse that nominated bank, even when the
documents have been lost in transit
A bank assumes no liability or responsibility for
errors in translation or interpretation of technical
terms and may transmit L/C terms without
translating them
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
61
Force Majeure
under UCP 600, Article 36


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 L/C that expired during
such interruption of its business
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
62
Disclaimer for Acts of an Instructed Party
under UCP 600, Article 37

A bank utilizing the services of another bank for the
purposes of giving effect to the instructions of the
appllicant does so for the account and at the risk of
the applicant

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
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
63
Disclaimer for Acts of an Instructed Party
under UCP 600, Article 37, cont…

A bank instructing another bank to perform services
is liable for charges that are commissions, fees,
costs or expenses incurred by that bank in
connection with its instructions

The applicant shall be bound by and liable to
indemnify a bank against all obligations and
responsibilities imposed by foreign laws and usages
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
64
Transferable L/C
under UCP 600, Article 38

L/C is transferred upon approval of the transferring
bank, and an issuing bank may be a transferring
bank

Transferable L/C means L/C that specifically states
it is “transferable”

Transferable L/C may be made available in whole
or in part
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
65
Transferable L/C
under UCP 600, Article 38, cont…

Transferred L/C means L/C that has been made
available by the transferring bank to a second
beneficiary at the request of the first beneficiary

L/C may be transferred in part to more than one
second beneficiary provided partial drawings or
shipments are allowed

Transferred L/C cannot be transferred at the
request of a second beneficiary to any subsequent
beneficiary
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
66
Transferable L/C
under UCP 600, Article 38, cont…

The transferred L/C must accurately reflect the
terms and conditions of the L/C, including
confirmation, if any, with the exception of :
 the amount
 the unit price
 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
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
67
Transferable L/C
under UCP 600, Article 38, cont…

The percentage of insurance cover may be
increased to provide the amount of cover stipulated
in the L/C or UCP 600
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
68
Transferable L/C
under UCP 600, Article 38, cont…

The name of the first beneficiary may be substituted
for that of the applicant in the L/C

If the name of the applicant is specifically required
by the L/C to appear in any document other than
the invoice, such requirement must be reflected in
the transferred L/C
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
69
Transferable L/C
under UCP 600, Article 38, cont…

Presentation of documents by or on behalf of a
second beneficiary must be made to the
transferring bank
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
70
Assignment of Proceeds
under UCP 600, Article 39

A beneficiary has a right to assign any proceeds to
which it may be or may become entitled under the
L/C, in accordance with the provisions of applicable
law
UCP 600 and Its Legal Aspects, Dr. Ramlan
Ginting, 2007
71
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