In the old days, documents were usually dispatched by the nominated bank itself. But today, some banks allow customers or overseas units to access trade finance systems, print the covering schedule, and send documents directly to the issuing bank. So what happens if the documents are lost in transit? Does UCP 600 article 35 still protect the nominated bank? An …

INTRODUCTION In documentary credit practice, issuing banks sometimes issue discrepancy notices too quickly, only to later realize that the alleged discrepancies are not valid under UCP 600 or ISBP. But what happens if the applicant has already relied on that first refusal notice and now refuses to reimburse the issuing bank after the bank changes its mind and decides the …

Standby practitioners who move from the world of commercial documentary credits into standby credits governed by ISP98 often encounter an interesting question: Does a “confirmer” under ISP98 operate the same way as a “confirming bank” under UCP 600? At first glance, the concepts appear almost identical. However, Rule 1.11(c)(i) of ISP98 sometimes creates confusion because it states that a confirmer …

In documentary credit practice, a few words in an LC can create major compliance issues — especially in triangular trade transactions where the beneficiary, supplier, and shipment origin are all located in different countries. One such phrase is: “Certificate of Origin issued by the Chamber of Commerce of the country of exportation.” At first glance, this may sound straightforward. But …

In international trade, many exporters and importers casually say: “CIP requires All Risks insurance.” Technically, that is not entirely wrong. But from an insurance and trade finance perspective, “All Risks” and ICC A are not perfectly identical terms. This distinction becomes important when a cargo claim is rejected because of one of the many exclusions hidden in the policy wording. …

A small wording difference between article 20 and article 23 of UCP 600 often raises an interesting technical question among trade finance practitioners. For bills of lading, UCP 600 does not expressly require the document to indicate a date of issuance. However, article 23 clearly states that an air transport document must indicate the date of issuance. Why the difference? …

In documentary credits, it is not uncommon to see a presentation period that appears longer than the time remaining before the expiry date of the credit. At first glance, this may seem contradictory and sometimes leads to confusion between applicants, beneficiaries, and even junior trade finance staff. The key point, however, is that under UCP 600, documents must comply with …

In LC practice, UCP 600 Article 12(b) clearly permits a nominated bank that has accepted a draft or incurred a deferred payment undertaking to prepay or purchase its own undertaking. But what about the issuing bank itself? Can the issuing bank also prepay or purchase its own accepted draft or deferred payment undertaking before maturity? This is an interesting question …

In trade finance, the “shortest route” is not always the fastest one. When a nominated bank chooses not to act, beneficiaries often look for ways to move things along—sometimes by going directly to the confirming bank. Sounds simple enough… but is it really that straightforward?  Let’s walk through a practical case raised by Arun. Question Dear Mr. Old Man, Hope …

In documentary credit practice, what looks obvious on paper can become surprisingly tricky in real life — especially when documents are presented at the “wrong” branch of the “right” bank. This case raises two classic questions under UCP 600 Article 3 and Article 14: Are branches in the same country the same bank? If documents are presented at a different …