UCP 600, the current version of UCPDC, is the collection of rules governing the issuance and execution of letters of credit in the cross border exportation and importation in the global economy. The rules of the UCP have been formulated in a manner that has almost equally protected the interests of both the exporters and importers. UCP, the popular title of UCPDC, compiles the best documentary credit practices that came into effect from July 1, 2007 and is the sixth revision of the rules since they were first promulgated in 1933.
The 39 articles of UCP 600 mainly cover the liabilities and responsibilities of different parties engaged in the process of LC which is meant for traders and bankers. Article 1 of UCP permits the user to modify or exclude any of the provisions of the rules by stating on the face of the credit. It offers flexibility of accommodating local regulations and necessary changes in the rules. Considering the contents, the articles in UCP 600 may be divided into seven major areas such as General Provisions and Definitions (articles 1-6), Undertakings and Liabilities (articles 7-13), Examination (article 14-16), Documents (articles 17-28), Miscellaneous Provisions (articles 29-33), Disclaimers (article 34-37), Transferable and Assignment (articles 38-39)
It asserts generic provisions for other documents. UCP focuses particularly on uniformity in the examination of documents by banks. Here matters of particular interest to the cross-border trade include the basic responsibilities of banks when examining documents tendered for payment under documentary credit governed under UCP 600, and the requirements pertaining to different types of documents. UCP 600 defined the term
Complying Presentation in article 2 that obligates bankers to consider LC terms, rules noted in UCP 600 and International Standard Banking Practice’ while examining documents. Article 14 also identifies some specific issues connected with standard for examination of documents. The universal acceptance of the UCP by practitioners in countries with widely divergent economic and judicial systems is a testament to the rules success. In Bangladesh, LC can only be opened and received within the framework of UCP 600 since July 2007. This electronic supplement came into force on April 1, 2002.
