For more than 70 years, the International Chamber of Commerce ICC has formulated the so-called UCP-The Uniform Customs and Practice for Documentary Credits. The first attempt to codify letter of credit practice started in 1929 when ICC introduced its “Uniform Regulations and Commercial Documentary Credits”. Although the failure to gain wide acceptance, these rules provided a foundation for further developments. Then, in 1933, ICC issued “The Uniform Customs and Practice for Commercial Documentary Credits” and this set of rules received formal acceptance in more than 40 countries all over the world. It is, however, not until the issue of UCP in 1962, that global acceptance took place. Since then the rules has been regularly updated in 1974, 1983 (UCP 400), 1993 (UCP 500) and now we have the sixth Revision-UCP 600 which came into effect in July 2007.

This study, “An analysis of key changes in UCP 600 compared to UCP 500 and Recommendations for better application”, aims to consider the differences from UCP 500 to UCP 600. The research questions posed in this study are: “Where the rules have been amended?” and “Which results in a potential changes in practice?”. Basing on the findings, this study will draw recommendations for parties involved in L/C transaction in applying the new revision UCP 600 before reaching the conclusion.

To achieve the above objectives, the study is divided into 3 chapters

Chapter I: “Literature review”, provides an in-depth background that covers all theoretical issues relevant to UCP set of rules and documentary letter of credit.

Chapter II: “Key changes under UCP 600 in comparison to UCP 500”, points out structural changes as well as key changes in UCP 600 in comparison with UCP 500. An evaluation of improvements and remaining problems is also discussed in this chapter.

Chapter III: “Recommendations for better UCP 600 application”, based on the findings, the chapter will put an end to the study with recommendations for main parties involved in letter of credit transaction to suggest the best way in applying the new UCP 600.