Necessary Reference Material for Letters of Credit

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Anyone wishing to present correct documents to support a Letter of Credit/Documentary Credit presentation must have access to UCP600, ISBP and Incoterms 2010.

1.  ICC Uniform Customs and Practice for Documentary Credits 2007 revision

UCP 600.  ICC Publication No. 600. Published by the ICC (International Chamber of Commerce) and obtainable from iccbooks.com (amongst other sources)  ISBN: 92-842-1257-X and 978-92-842-1257-6

This booklet provides the wording for the rules that apply to any documentary credit (including, when applicable) Standby Letters of Credit.  The rules are divided into sections called Articles and there are 39 articles for Documentary Credits and 12 articles for electronic presentations of Documentary Credits.

Without access to the precise wording of these rules, anyone trying to present conforming documents would struggle and be more likely to submit discrepant presentations.  Discrepant presentations are to be avoided where possible since they can impact on the guarantee of payment to the seller (Beneficiary).

2.  International Standard Banking Practice for the Examination of Documents under UCP 600.

Known as ISBP, this booklet is published by the ICC and the 2013 edition (most recent) is available from iccbooks.com (amongst other sources) ICC Publication: 745E ISBN: 978-92-842-0188-4

ISBP consists of a compilation of banking practices that help clarify the principles and content of UCP 600, especially with respect to the completion of different trade documents such as invoices, transport and insurance documents, Certificates of Origin, etc.  ISBP also provides coverage of documents which are not specifically mentioned in UCP.

This booklet was designed to aid a Beneficiary of a Documentary Credit in the creation and presentation of conforming documents and as such is an invaluable reference source for anyone involved in Documentary Credits.

3.  Incoterms 2010

ICC rules for the use of domestic and international trade terms.  ICC Publications no. 715E available from iccbooks.com (amongst other sources) ISBN: 978-92-842-0080-1

This booklet details out the wording relevant to the Incoterms under the 2010 revision (latest revision) which includes EXW, FCA, CPT, CIP, DAT, DAP, DDP, FAS, FOB, CFR and CIF.

Although not specifically related to Documentary Credits, the incoterm used in the contract (if any) can influence the way that the documents detailed in a Documentary Credit are issued, supplied and forwarded to the buyer (Applicant). Getting the ICC Incoterm wrong can, in the worst case scenario, affect the guarantee of payment under a Documentary Credit.

This is the third article in the series on Getting paid with Letters of Credit. Please do check out the other articles in this series.

Maria Narancic from Point to Point Export Services is an independent international trade adviser who assists organisations world wide with their international trade projects, documentation, Documentary Credits and import/export training. She is based in the United Kingdom. If you require any further assistance with the matters mentioned above, please do contact us by e-mail on info@point-point.com or to access other articles on International Trade matters please do check out our website at www.point-point.com

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