UCP500 and UCP600 difference_International trade law

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UCP500 and UCP600 difference

Sources of information：未知Release time:2017-02-27 11:12　Reading times：次I would like to comment

Article 1, 2nd: is part of the new, this part will be a lot of UCP500 are already in use but does not define the concept clear. Some part are defined in ICC publications(including UCP500) already mentioned in, such as banking days (Banking Day), letters of credit (Credit), and another part is first mentioned in UCP600, should pay particular attention, such as complying (Complying Presentation), to enter into commitments (Honour).

Attention is that UCP600 establishes commitments (Honour) concept, including sight, deferred, acceptance of payment under the letter of credit. And the negotiation(negotiation) the meaning of UCP500 negotiation will be defined as the Bank was authorized to negotiate on a bill giving of value and/or documents, examination ofdocuments without giving of value does not constitute a negotiation. UCP600 is defined on the pay for "specified bank in match make single Xia, in its should was paid of bank days day or zhiqian to beneficiaries prepaid or agreed advances items, to purchase Bill (its payment human specified bank yiwai of other Bank) and the/or documents of behavior", in new of defined in the, clear has on the pay is on notes and the documents of a buy behavior, and clear is on beneficiaries of financing--prepaid or commitment prepaid. Definitional changes admitted some disputes theexistence of long-term negotiation letter of credit, as well as negotiating bank to the beneficiary of the financing into the scope of protection from practices.

Article 2, 3rd: new provisions. Made clear in the article in an appropriate case, plural meaning and cancel the UCP500 "l" type, its reasons for revoking the credit to the beneficiary rights lack protection, so in actual practice are rarely used. This means that upon implementation of the new practices, all of the letters of credit is irrevocable.

3, 4th: added "an issuing bank should discourage any attempt by the applicant to the underlying contract, proforma invoice and other documents as part of the letter of credit practice" that change embodies the spirit of ICC credit shouldn't be toocomplicated. In practice, applicants for more effectively controlling the behavior ofbeneficiaries, often mistaken for the letter of credit, the more complex, binding is stronger, but in fact too complicated credit will only bring difficulties to the bankingbusiness.

4, 7th and 8th respectively is the responsibility of issuing and confirming bank, although this provision in the form of UCP500 differs, but roughly the same content requirements. Difference is: one, Article 7-c terms in the provides "open card line on acceptance or extension payment credit items Xia match make single amount of paid should in due day handle, regardless of specified bank whether in due day zhiqian prepaid or purchase has documents", to determine has specified bank in extension payment and acceptance credit Xia of financing, aimed at protection specified line in credit Xia on beneficiaries for financing of behavior; second, according to Article 8-a and b terms in the provides, insurance against line also bear on the pay line of role, But for negotiation without recourse.

5, 9th: added "second advising bank" concept, and clearly second advising bank and first bank the same responsibility. In practice, letters of credit are often from "second advising bank" notice, and SWIFT MT700 format of the credit also has "ADVICE THROUGH" column, but no relevant provisions UCP500 UCP600 added this solves issues related to the practice.

6, 10th: for an amendment, the points contained in the Nineth UCP500 article. Relevant provisions and no big change, but in terms of f clearly denied the Bank "If thebeneficiary fails to give notice within the specified time, then change to take effect," the validity of provisions. This provision reflects the consistent position of ICC silence does not mean accepting. ICC has made it clear that the establishment of time limits and "without consent of the beneficiary of the credit may not be modifiedor removed" nature of the conflict, as well as some of the provisions of national law.

7, 12th: "designated", which replaces the UCP500 article 18th. Because in practice alarge number of cases associated with the specified bank liabilities, UCP600 moredetailed requirements specified in the Bank's independence, and b was added to explain the specific meaning of the choice of the issuing banks.

8, 14th: provides more detail than the UCP500 13th, which provides in paragraphb examination period to 5 days, and declared "the term is not in the one-day credit due on or after that day or, at the latest one-day session to have been curtailedor affected". Premise of UCP500 rules within a reasonable time (Reasonable Time)Bank examination has 7 working days, within its validity period, a provision that would allow the disputes occurred, this change makes the double criterion of document processing time reduced to mere days standard to judge according to the simplistic. C corresponds to UCP500 article 43rd (maturity date), but the difference is large, UCP500 rules when a credit when requested in the transport document, it should be provided during a specific, if not provided, the Bank will be accepted no later than 21 days after the date of shipment to the document presented, but the UCP600 are strictly defined documents within 21 days of shipment documents. E corresponds to the 37th UCP500 article, according to the provisions, other documents except commercial invoice can have no description of the goods, if any, you canuse general terms not conflicting with the description in the credit. G is UCP600 added a clause expressly set forth in the terms and the increase of non-required documents will be disregarded in the credit, and be returned to the presenter. F corresponds to UCP500 article 22nd, but added "but must not be dated later than its date of presentation." Statement to emphasize that although the issuing date of thedocuments prior to the issuance date of the credit, but must be within the period of presentation only. J for additional terms, emphasizing the consignee in the transport document (Consignee) and notification (Notify party) is part of the addressmust be the same as the credit of the applicant, but in other cases, the address of the beneficiary and the applicant need only the address shown in the credit Department of a country can be. Corresponds to UCP500 31st article k, only the scope ofthe Bill of lading extended to all documents. I added provisions, but widespread inpractice.

9, 16th: the biggest change is the increase of bank documents in the inconsistent treatment of two options (c--band III c). Which b for "open card line retained documents until its from applicants at received gave up inconsistent points of notification and agreed accept the gave up, or in its agreed accept on inconsistent points of gave up zhiqian from make single at received its further of indicates", although this a practices currently in Bank business in the often with to, but in UCP500 in the no made provides, and not was International Chamber of Commerce by advocates, so this a terms of joined better guarantees has beneficiaries interests, makes its in documents inconsistent of situation Xia, as applicants agreed, even open card line refused zhihou, Still available to the issuing bank for payment. If the exporter for various reasons didn't want to give her the right, you can make-ahead instructionspursuant to section c, "banks will be obtained from the presenter indicates that before".

10, and 19th article: new of terms than original of terms to more simple some, important of changes has points: 1. for canceled has "more type transport business people" of concept, 2. delete "shall not contains carrying vessels only to sails for power of comments", the terms of delete is given sailing in ocean transport in the has no longer has comes, without made provides (shipping bills of lading, and not transfer shipping single and Charter contract bills of lading in the also are delete this points); 3. Any signature by the agent must indicate their agent was also the captain of the carrier without indicating the agent's name and identity; 4. "on the shows that already contains all the conditions" with the words "including carriage", eliminating the practice is not easy to determine "what is all the" hidden dangers, reducedisputes. (Other transport documents are also deleted 3.4 points)

11, article 23rd: the provisions of the air transport document, change the shipmentdate. Ucp500 (Article 27-a) in the provides "Dang credit requirements has a actual shipped date Shi, in air documents Shang made the date of specific comments, the shipped date that considered transit date, in other all situation Xia, air documents of issued date that considered shipment date", and in Ucp600 in the is regardless of credit has no requirements, dang air single Shang comments has actual shipped date Shi, the date considered shipped date.

12, 35th: clear "the nominated Bank and the issuing bank/between the confirmingbank, or between the issuing bank and the confirming bank lost, the issuing or confirming bank must honour or negotiate", added 500 on Bank of exemption provisions.

Third, enterprises should consider when choosing the credit problems

1. time considerations, the exporting Party shall select the l/c at sight, in a timely and secure payment, while the importing party should try to choose deferred payment to deferred payment or obtain financing.

2. from has no Bill Shang consider, export party should select has Bill of credit, because soon period payment credit items Xia, although has no Bill in payment time Shang is no difference of, export party also cannot using Bill discount and get financing, and imports party also cannot using Bill of inconsistent points refused, beneficiaries in documents zhiwai and more has notes Shang of payment protection; in forward credit items Xia, as has Bill, in open card line or payment line acceptance Hou, credit of payment responsibility on rose for notes Shang of unconditional payment commitment, So even if there is fraud, such as trade disputes and banks cannot shirk its responsibility, meanwhile promised Bill beneficiary can also be specified implicitly discount or adjusted according to the market interest rates and access to financing.

3. from has free pay line and whether allows electric cable of angle consider, export party should requirements has paid line or allows electric cable, such words once export party from paid line cable claims success, on master has initiative, non-substantive of inconsistent points usually not was refused, because if refused, on means with open card line needed to beneficiaries or specified bank recourse by pay payments.

4. There is no designated bank perspective, the exporting Party shall select a credit with banks, the reasons for banks for a local bank, timely presentation proceeds in a timely manner once the banks payment, become a bona fide third party of thedocuments, the protection of the interests of banks is equivalent to the protectionof beneficiaries, thus more advantageous to the exporting Party.

5. from the point of view of whether confirmation, such as issuing bank to be trustworthy, stable national policy, without confirmation, a confirming bank costs will arise, and second, because the confirming bank does not charge a deposit, but the need to take risks, in order to prevent to the issuing bank after document is refused, documents tend to be more critical documents.

In summary, select credit as in the foreign trade settlement, carefully select the payment method to ensure safe and timely payment.

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