Hi,
I need some clarification and if possible more elobration on one of the sentence used in article 1 of UCP 600 that,
Application of UCP
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.
need to know till what extent will it be applicable to standby LC, As UCP 600 focus on compliance of document presented with L/c, and standby L/c will come in action if applicant denied to pay to Beneficiary.
Thanks in advance !
Article 1_ UCP 600
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UT18GX
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nesarul
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article 1
Dear,
Despite nature of transaction is quite apart [normally] from each other.... both required to present documents in order to be paid by the issuing bank or issuer. Since Both are independent undertaking, underlying contract is of no concerned issue at all.
moreover, Standby L/C is not only issued for default situation [non-performance], but also issues for performance also such as direct pay standby. Hence this is not at all matter when presentation is in action. I think, presentation of complying document under L/C or SBLC to honour is important.
.
The essence of it : not all article of UCP is intended for sblc, SO if an SBLC is subject to UCP 600, Those articles are applicable which are suitable for SBLC... such as : under SBLC, document related article has no relevance....
regards
nesar
.As UCP 600 focus on compliance of document presented with L/c, and standby L/c will come in action if applicant denied to pay to Beneficiary.
Despite nature of transaction is quite apart [normally] from each other.... both required to present documents in order to be paid by the issuing bank or issuer. Since Both are independent undertaking, underlying contract is of no concerned issue at all.
moreover, Standby L/C is not only issued for default situation [non-performance], but also issues for performance also such as direct pay standby. Hence this is not at all matter when presentation is in action. I think, presentation of complying document under L/C or SBLC to honour is important.
.
The first UCP reference of standby Letter of credit has been sought after in UCP 400. and the quoted wording is still similar to that, The reason of it is well explained in comparison between UCP1974/1983 book:(including, to the extent to which they may be applicable, any standby letter of credit)
The essence of it : not all article of UCP is intended for sblc, SO if an SBLC is subject to UCP 600, Those articles are applicable which are suitable for SBLC... such as : under SBLC, document related article has no relevance....
regards
nesar
