Table of content

ACKNOWLEDGEMENTS IV

ABSTRACT II

LIST OF ABBREVIATION III

LIST OF FIGURES IV

INTRODUCTION 1

1. RELEVANT OF THE STUDY 1

2. AIMS OF THE STUDY 2

3. RESEARCH METHODOLOGY 2

4. OBJECT AND SCOPE OF THE STUDY 3

5. STRUCTURE OF THE STUDY 3

CHAPTER I: LITERATURE REVIEW 4

1.1 WHAT IS UCP? 4

1.1.1 The born of UCP 500 5

1.1.2. The born of UCP 600 6

1.2 WHAT IS DOCUMENTARY CREDIT? 7

1.2.1. Classification 9

1.2.2. The mechanics of letter of credit transaction 16

1.2.3. Parties involved in a letter of credit transaction 21

CHAPTER 2: KEY CHANGES UNDER UCP 600 COMPARED TO UCP 500 24

2.1. CHANGES IN STRUCTURE OF UCP 600 COMPARED TO UCP 500 24

2.1.1. UCP 500 articles not included in UCP 600 25

2.1.2. New articles for UCP 600 26

2.2. KEY CHANGES UNDER UCP 600 COMPARED TO UCP 500 27

2.2.1. Changes application method 27

2.2.2. Changes in Definitions and interpretations 27

2.2.3. Changes in types of credit 30

2.2.4. Changes in time required for examination of documents 31

2.2.5. Changes in addresses of of beneficiaries and applicants 32

2.2.6. Changes in refusal notice 32

2.2.7. Changes in transport documents 33

2.2.8. Changes in some other articles 34

2.3. IMPROVEMENTS AND REMAINING PROBLEMS UNDER UCP 600 38

2.3.1. UCP 600’s improvements 38

2.3.2. Remaining problems in UCP 600 40

CHAPTER III 45

RECOMMENDATIONS FOR BETTER UCP 600 APPLICATION 45

3.1. RECOMMENDATIONS FOR EXPORTERS INVOLVED IN L/C TRANSACTION 45

3.1.1. Checking detailed content on receipt of the letter 46

3.1.2. Preparing documents for presentation to the Bank 52

3.1.3. Presenting documents to the bank without delay and within the expiry date and transport document time limit 54

3.1.4. Dealing with discrepancies 55

3.2. RECOMMENDATIONS FOR IMPORTERS INVOLVED IN L/C TRANSACTION 56

3.2.1. Arranging for the Letter of Credit 57

3.2.2. Completing the Application Form 61

3.3. RECOMMENDATIONS FOR BANKS INVOLVED IN L/C TRANSACTION 67

3.3.1. Recommendations for issuing bank 67

3.3.2. Recommendations for advising bank 69

3.3.3. Recommendations for confirming bank 70

3.3.4. Recommendations for nominated bank 71

CONCLUSION 71

REFERENCES

APPENDIX

APPENDIX 1: DESTINATION TABLE UCP 500-UCP 600

APPENDIX 2: SAMPLE OF LETTER OF CREDIT APPLICATION FOR