QUESTION
Dear Mr. Old Man,
We issued L/C and refer “This credit is subject to the UCP600.DC.2007. Revision ICC AND ISBP 745 2013 ICC or the latest version”.
And Advising Bank send message “ WE REFER TO THE CAPTIONED DOCUMENTARY CREDIT WHICH INCLUDES REFERENCE TO THE INTERNATIONAL STANDARD BANKING PRACTICE (ISBP) AND INFORM YOU THAT WE ARE NOT BOUND BY THE ISBP”
Please let me know whether an L/C can be issued subject to both UCP 600 and ISBP 745 and whether the advising bank is correct in its rejection of ISBP?
Looking forward to receiving your reply.
Thanks and Best Regards,
NGLC
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ANSWER
Hi,
My quick answer is that an LC should not be issued subject to UCP 600 and ISBP 745; it should be issued subject to UCP 600 only.
ISBP 745 explains how to apply the rules of UCP 600 in a way that leads to an international standard banking practice for examination of documents under UCP 600.
For your further reference, hereunder is an excerpt from the introduction of ISBP 745:
“The practices described in this publication [ISBP 781] highlight how the articles of UCP 600 are to be interpreted and applied, to the extent that the terms and conditions of the credit, or any amendment thereto, do not expressly modify or exclude an applicable article in UCP 600… The incorporation of this publication into the terms of a documentary credit is deemed inappropriate, as the requirement to follow agreed practices is implicit in UCP 600”.
Kind regards
Mr. Old Man
