Having reviewed all of the rules since the period before the first UCP in 1933 to UCP 600, what can we conclude about how much have they changed? The UCP, as Boris Kozolchyk pointed out, “is the living law of documentary credits.1” Indeed, the goal of each successive revision of the UCP has been to update the rules to provide for changes in custom and practice. Many of these revisions have dealt extensively with changes in commercial practice in the transport and insurance industries, as well as changes in banking practice and new methods of utilizing letters of credit, such as those involving deferred payment credits and standby credits.

But while much has changed, most of the original principles underlying the letter of credit have remained the same. For instance, the 1933 UCP states in article 5: “Irrevocable credits are definite undertakings by an opening Bank in favour of the beneficiary. Such undertaking can neither be modified nor cancelled without the agreement of all concerned.” Likewise, UCP 600, in the definition of credit in article 2, states: “Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation”, and in sub-article 10 (a): “Except as otherwise provided by article 38, a credit can neither be amended nor cancelled without the agreement of the issuing bank, the confirming bank, if any, and the beneficiary.”

Following are a few more examples of what has not changed much over the years since the creation of the 1920 Regulations Affecting Export Commercial Credits (1920 RAECC) and the 1933 Uniform Customs and Practice for Commercial Documentary Credits (1933 UCP) until today’s Uniform Customs and Practice for Documentary Credits (2007 UCP 600).

-

1920 RAECC: “The use of, ‘to,’ ‘until’, ‘on,’ and words of similar import, in indicating expiration, is interpreted to include the date mentioned.”

1933 UCP: “The words ‘to’, ‘until’, ‘till’ and words of similar import applying to dates of maturity for payment or negotiation are understood to include the date mentioned.”

2007 UCP 600: “The words ‘to’, ‘until’, ‘till’, ‘from’ and ‘between’ when used to determine a period of shipment include the date or dates mentioned, and the words ‘before’ and ‘after’ exclude the date mentioned.”

[Page246:]

1920 RAECC: “When the indicated expiration date for payment falls upon a Sunday or legal holiday here, the expiration is extended to the next succeeding business day.”

1933 UCP: “When the stipulated expiry date falls on a Sunday or legal or local holiday, or upon any holiday recognized as such by the Banks, the last day of the period of validity will be extended until the first following business day. This does not apply to the last day for shipment which must be respected whatever the day.”

2007 UCP 600: “If the expiry date of a credit or the last day for presentation falls on a day when the bank to which presentation is to be made is closed for reasons other than those referred to in article 36, the expiry date or the last day for presentation, as the case may be, will be extended to the first following banking day.”

-

1933 UCP: “The beneficiary of a credit can in no case avail himself of the legal relations existing between Banks, or between the Bank of the principal (purchaser) and the latter.”

2007 UCP 600: “A beneficiary can in no case avail itself of the contractual relationships existing between banks or between the applicant and the issuing bank.”

-

1920 RAECC: “The terms ‘prompt shipment,’ ‘immediate shipment,’ ‘shipment as soon as possible’ and words of similar import, shall be interpreted as requiring shipment to be effected and (if the credit advice is without expressed duration) the stipulated documents presented for payment within thirty days from the date of our credit advice.”

1933 UCP: “‘Prompt’, ‘immediately’, ‘as soon as possible’, &c.: these terms, and others of similar import, are to be interpreted as a request for shipment within thirty days from the notification to the beneficiary, unless a date has been stipulated.”

2007 UCP 600: “Unless required to be used in a document, words such as ‘prompt’, ‘immediately’ or ‘as soon as possible’ will be disregarded.”

-

1933 UCP: “Commercial Documentary Credits are essentially distinct transactions from sales contracts, on which they may be based, with which Banks are not concerned.”

2007 UCP 600: “A credit by its nature is a separate transaction from the sale or other contract on which it may be based. Banks are in no way concerned with or bound by such contract, even if any reference whatsoever to it is included in the credit.”

[Page247:]

1933 UCP: “Irrevocable credits are definite undertakings by an opening Bank in favour of the beneficiary. Such undertaking can neither be modified nor cancelled without the agreement of all concerned.”

2007 UCP 600: “Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation.”

-

1933 UCP: “Irrevocable credits may be notified to the beneficiary through an advising Bank without responsibility on the latter’s part when it has merely been asked to notify the beneficiary.”

2007 UCP 600: “A credit and any may be advised to a beneficiary through an advising bank. An advising bank that is not a confirming bank advises the credit and any amendment without any undertaking to honour or negotiate.”

-

1920 RAECC: “We assume no liability or responsibility for the form, sufficiency, correctness, genuineness or legal effect of any documents, or for the description, quantity, quality, condition, delivery or value of the merchandise represented thereby, or for the good faith or acts of the shipper or any other person whomsoever; but documents will be examined with care sufficient to ascertain whether on their face they appear to be regular in general form.”

1933 UCP: “Banks assume no liability or responsibility for the form, sufficiency, correctness, genuineness, falsification or legal effect of any documents or papers, or for the description, quantity, weight, quality, condition, packing, delivery or value of goods represented thereby, or for the general and/or particular conditions stipulated in the documents, or for the good faith or acts of the consignee or any other person whomsoever, or for the solvency, standing, &C. of the carriers or insurers of the goods.”

2007 UCP 600: “A bank assumes no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any document, or for the general or particular conditions stipulated in a document or superimposed thereon; nor does it assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods, services or other performance represented by any document, or for the good faith or acts or omissions, solvency, performance or standing of the consignor, the carrier, the forwarder, the consignee or the insurer of the goods or any other person.”

[Page248:]

1933 UCP: “Banks assume no liability or responsibility for the consequences arising out of delay and/or loss in transit of cables or telegrams, letters and/or documents, or for delay, mutilation or other errors in the transmission of cables or telegrams, or for errors in translation or interpretation of technical terms, and Banks reserve the right to transmit credit terms without translating them.”

2007 UCP 600: “A bank assumes no liability or responsibility for the consequences arising out of delay, loss in transit, mutilation or other errors arising in the transmission of any messages or delivery of letters or documents, when such messages, letters or documents are transmitted or sent according to the requirements stated in the credit, or when the bank may have taken the initiative in the choice of the delivery service in the absence of such instructions in the credit.”

-

1933 UCP: “Banks assume no liability or responsibility for consequences arising out of the interruption of their business either by a decision of a public authority, or by strikes, lockouts, riots, wars, acts of God or other causes beyond their control. On credits expiring during such interruption of business, Banks will be able to make no settlement after expiration, except on specific instructions from their principal.”

2007 UCP 600: “A bank assumes no liability or responsibility for the consequences arising out of the interruption of its business by Acts of God, riots, civil commotions, insurrections, wars, acts of terrorism, or by any strikes or lockouts or any other causes beyond its control.”

-

1933 UCP: “The terms ‘first half ’, ‘second half ’ of a month shall be construed respectively as from the 1st to the 15th, and the 16th to the last day of each month, inclusive.”

2007 UCP 600: “The terms ‘first half ’ and ‘second half ’ of a month shall be construed respectively as the 1st to the 15th and the 16th to the last day of the month, all dates inclusive.”

-

1933 UCP: “The terms ‘beginning’, ‘middle’, or ‘end’ of a month shall be construed respectively as from the 1st to the 10th, the 11th to the 20th, and the 21st to the last day of each month, inclusive.”

2007 UCP 600: “The terms ‘beginning’, ‘middle’ and ‘end’ of a month shall be construed respectively as the 1st to the 10th, the 11th to the 20th and the 21st to the last day of the month, all dates inclusive.”

1
See the introduction to this book.