CASE STUDIES ON DOCUMENTARY CREDITS AND UCP600 CASE STUDY 1 Banks have a practice of calling for the original LC at the time of presentation of documents and endorse any drawings on its reverse. LC's may be made available by Acceptance / Defferred Payment / Negotiation and to be freely available with any bank. Is it mandatory to endorse the original LC on its reverse? Analysis Most LCs contain a clause indicating such a requirement. The practice is required by SWIFT standards cat.7, for freely negotiable credits, available with any bank. Conclusion What is the problem? CASE STUDY 2 If a nominated bank does not incur a deffered payment undertaking on presentation of complying documents and forwards them to the Issuing Bank. Subsequently can it a purchases a deferred payment undertaking from the issuing bank and seek protection under UCP600? Articles 7c. UCP600 CASE STUDY 3 If a LC is confirmed and is available with the Confirming Bank and the beneficiary chooses to present the document directly to the Issuing Bank and the Issuing Bank wrongfully dishonors. Should the confirming bank honor the presentation given that the LC has meanwhile expired? Article 8a. UCP600 CASE STUDY 4 A documentary credit requires all documents must to be issued in English language. The presentation includes a Certificate of Origin bearing a Stamp / Legalisation done in another language Is this a discrepancy? Issued in? CASE STUDY 5 As per Article 38 of UCP 600, A LC can be transferred to more than one second beneficiary. This can be done preferably when the Partial Shipments are allowed under the LC. If the first Beneficiary is certain that he would be able to comply with article 31(b) of UCP600 (re partial shipments – submission of multiple BLs on the same voyage), can a LC be transferred to more than one second beneficiary even if the LC states Partial Shipment is prohibited provided Article 38.d. UCP600
CASE STUDY 6 If the nominated bank does not accept a bill of exchange drawn on them by the beneficiary, can the same bill of exchange be presented to the issuing bank or should they present a fresh bill of exchange drawn on the Issuing Bank UCP Article 7a (iv) CASE STUDY 7 Under the documents required a LC calls for a Bill of Lading. Bill of Lading submitted with the documents is signed by a forwarder as carrier. Is it a discrepancy? Article 20 UCP600 CASE STUDY 8 L/C requirement: invoices in 3 fold and Legalized by Chamber of Commerce. Beneficiary submits invoices with only one legalized and others without being legalized. Is it a discrepancy? Article 17e. UCP600 CASE STUDY 9 LC calls for a Beneficiary's certificate stating the expiry date (of the product). The certificate presented states only the month and the year of expiry. Is it a discrepancy?