Ambiguity as to the Issuers of Documents
Article 20
  1. Terms such as "first class", well know", "qualified", "independent", "official", "competent', "local" and the like, shall not be used to describe the issuers of any document(s) to be presented under a Credit. If such terms are incorporated in the Credit, banks will accept the relative documents(s) as presented, provided that it appears on its face to be in compliance with the other terms and conditions of the Credit and not to have been issued by the Beneficiary.
  2. Unless otherwise stipulated in the Credit, banks will also accept as an original document(s), a documents(s) produced or appearing to have been produced:
    1. by reprographic, automated or computerized systems;
    2. as carbon copies; provided that it is marked as original and, where necessary, appears to be signed. A document may be signed by handwriting, by facsimile signature, by perforated signature, by stamp, by symbol, or by any other mechanical or electronic method of authentication.
    1. Unless otherwise stipulated in the Credit, banks will accept as a copy(ies), a documment(s) either labelled copy or not marked as an original - a copy(ies) need not be signed.
    2. Credits that require multiple document(s) such as "duplicate", "two fold", "two copies and the remaining number in copies where the document itself indicates otherwise.
  4. Unless otherwise stipulated in the Credit, a condition under a Credit calling for a document to be authenticated, validated, legalised, visaed, certified or indicating a similar requirement, will be satisfied by any signature, mark, stamp or label on such documents that on its face appears to satisfy the above condition.
Unspecified Issuers or Contents of Documents
Article 21
When documents other than transport documents, insurance documents and commercial invoices are called for, the Credit should stipulate by whom such documents are to be issued and their wording or data content. If the Credit does not so stipulate, banks will accept such documents as presented, provided that their data content is not inconsistent with any other stipulated document presented.

Issuance Date of Documents v Credit Date
Article 22
Unless otherwise stipulated in the Credit, banks will accept a document bearing a date of issuance prior to that of the Credit, subject to such documents

Marine / Ocean Bill of Lading
Article 23
  1. If a Credit calls for a bill of lading covering a port-to-port shipment, banks will, unless otherwise stipulated in the Credit, accept a document, however named, which :
    1. appears on its face to indicate the name of the carrier and to have been signed or otherwise authenticated by:
      * the carrier or a named agent for or on behalf of the carrier, or
      * the master or a named agent for or on behalf of the master. Any signature or authentication of the carrier or master must be indentified as carrier or master, as carrier or master, as the case may be. An agent signing or authenticating for the carrier or aster must also indicate the name and the capacity of the party, i.e. carrier or master, on whose behalf that agent is acting.
    2. indicates that the goods have been loaded on board, or shipped on a named vessel.
      Loading on board or shipment on a named vessel may be indicated by pre-printed wording on the bill of lading that the goods have been loaded on board a named vessel or shipped on a named vessel, in which case the date of issuance of the bill of lading will be deemed to be that date of loading on board and the date of shipment.
      In all other cases loading on board a named vessel must be evidenced by a notation on the bill of lading which gives the date on which the goods have been loaded on board on board, in which case the date of the on board notation will be deemed to be the date of shipment.
      If the bill of lading contains the indication " intended vessel " , or similar qualification in relation to the vessel, loading on board a named vessel must be evidenced by an on board notation on the bill of lading which, in addition to the date on which the goods have been loaded on board, also includes the name of the vessel on which the goods have been loaded, even if they have been loaded on the vessel named as the " intended vessel " .
      If the bill of lading indicates a place of receipt or taking in charge different from the port of loading, the on board notation must also include the port of loading stipulated in the Credit and the name of the vessel on which the goods have been loaded, even if they have been loaded on the vessel named in the bill of lading. This provision also applies whenever loading on board the vessel is indicated by per-printed wording on the bill of lading,
      and
    3. indicates the port of loading and the port of discharge stipulated in the Credit, notwithstanding that it:
      1. indicates a place of taking in charge different from the port of loading, and / or a place of final destination different from the port of discharge, and/or
      2. contains the indication " intended " or similar qualification in relation to the port of loading and / or port of discharge, as long as the document also states the ports of loading and / or discharge stipulated in the Credit,
      and
    4. consists of a sloe original bill of lading or, if issued in more than one original, the full set as so issued. and
    5. appears to contain all of the terms and conditions of carriage, or some of such terms and conditions by reference to a source or document other than the bill of lading (short form/blank back bill of lading) ; banks will not examine the contents of such terms and conditions, and
    6. contains no indication that it is subject to a charter party and / or no indication that the carrying vessel is propelled by sail only, and
    7. in all other respects meets the stipulations of the Credit .
  2. for the purpose of this Article, transhipment means unloading and reloading from one vessel to another vessel during the course of ocean carriage from the port of loading to the port of discharge stipulated in the Credit.
  3. Unless transhipment is prohibited by the terms of the Credit, banks will accept a bill of lading which indicates that the goods will be transhipped, provided that the entire ocean carriage is covered by one and the same bill of lading.
  4. Even if the Credit prohibits transhipment, banks will accept a bill of lading which:
    1. indicates that transhipment will take place as long as the relevant cargo is shipped in Container(s), Trailer(s) and/or "LASH" barge(s) as evidenced by the bill of lading, provided that the entire ocean carriage is covered by one and the same bill of lading, and/or
    2. incorporates clauses stating that the carrier reserves the right to traship.
Non-Negotiable Sea Waybill
Article 24
  1. If a Credit calls for a non-negotiable sea waybill covering a port-to-port shipment, banks will, unless otherwise stipulated in the Credit, accept a document, however named, which:
    1. appears on its face to indicate the name of the carrier and to have been signed or otherwise authenticated by:
      * the carrier or a named agent for or on behalf of the carrier, or
      * the master or a named agent for or on behalf of the master,
      Any signature or authentication of the carrier or master must be identified as carrier or master, as the case may be. An agent signing or authenticating for the carrier or master must also indicate the name and the capacity of the party, i.e. carrier or master, on whose behalf that agent is acting,
      and
    2. indicates that the goods have been loaded on board , or shipped on a named vessel.
      Loading on board or shipment on a named vessel may be indicated by pre-printed wording on the non-negotiable sea waybill that the goods have been loaded on board a named vessel or shipped on a named vessel, in which case the date of issuance of the non-negotiable sea waybill will be deemed to be the date of loading on board and the date of shipment.
      In all other cases loading on board a named vessel must be evidenced by a notation on the non-negotiable sea waybill which gives the date on which the goods have been loaded on board, in which case the date of the on board notation will be deemed to be the date of shipment.
      If the non-negotiable sea waybill contains the indication "intended vessel", or similar qualification in relation to the vessel, loading on board a named vessel must be evidenced by an on board notation on the non-negotiable sea waybill which, in addition to the date on which the goods have been loaded on board, includes the name of the vessel on which the goods have been loaded, even if they have been loaded on the vessel named as the "intended vessel".
      If the non-negotiable sea waybill indicates a place of receipt or taking in charge different from the port of loading stipulated in the Credit and the name of the vessel on which the goods have been loaded, even if they have been loaded on a vessel named in the non-negotiable sea waybill. This provision also applies whenever loading on board the vessel is indicated by pre-printed wording on the non-negotiable sea waybill,
      and
    3. indicates the port of loading and the port of discharge stipulated in the Credit, notwithstanding that it:
      1. indicates a place of taking in charge different from the port of , loading, and / or a place of finaldestination different from the port of discharge
        and /or
      2. contains the indication " intended " or similar qualification in relation to the port of loading and / or port of discharge, as long as the document also states the ports of loading and / or discharge stipulated in the Credit.,
      and
    4. consists of a sole original non-negotiable sea waybill, or if issued in more than one original, the full set as so issued,
      and
    5. appears to contain all of the terms and conditions of carriage, or some of such terms and conditions by reference to a source or document other tan the non-negotiable sea waybill (short form / blank back non-negotiable sea waybill) ; banks will not examine the contents of such terms and conditions,
      and
    6. contains no indication that it is subject to a charter party and / or indication that the carrying vessel is propelled by sail only,
      and
    7. in all other respects meets the stipulations of the Credit.
  2. For the purpose of this Article, transhipment means unloading and reloading from one vessel to another vessel during the course of ocean carriage from the port of loading to the port of discharge stipulated in the Credit.
  3. Unless transhipment is prohibited by the terms of the Credit, banks will accept a non-negotiable sea waybill which indicates that the goods will be transhipped, provided that the entire ocean carriage is covered by one and the same non-negotiable sea waybill.
  4. Even if the Credit prohibits transphipment, banks will accept a non-negotiable sea waybill which:
    1. indicates that transhipment will take place as long as the relevant cargo is shipped in Container(s), Trailer(s) and / or " LASH " barge(s) as evidenced by the non-negotiable sea waybill, provided that the entire ocean carriage is covered by one and the same non-negotiable sea waybill. and / or
    2. incorporates clauses stating that the carrier reserves the right to tranship.
Charter Party Bill of Lading
Article 25
  1. If a Credit calls for or permits a charter party bill of lading, banks will, unless otherwise stipulated in the Credit, accept a document, however named, which:
    1. contains any indication that it is subject to a charter party,
      and
    2. appears on its face to have been signed or otherwise authenticated by ;
      * the master or a named agent for or on behalf of the master, or
      * the owner or a named agent for or on behalf of the owner.
      Any signature or authentication of the master or owner must be identified as master or owner as the case may be. An agent signing or authenticating for the master or owner must also indicate the name and the capacity of the party, i.e. master or owner, on whose behalf that agent is acting,
      and
    3. does or does not indicate the name of the carrier,
      and
    4. indicates that the goods have been loaded on board or shipped on a named vessel.
      Loading on board or shipment on a named vessel may be indicated by pre-printed wording on the bill of lading that the goods have been loaded on board a named vessel or shipped on a named vessel, in which case the date of issuance of the bill of lading will be deemed to be the date of loading on board and the date of shipment.
      In all other cases loading a named vessel must be evidenced by a notation on the bill of lading which gives the date on which the goods have been loaded on board, in which case the date of the on board notation will be deemed to be the date of shipment,
      and
    5. indicates the port of loading and the port of discharge stipulated in the Credit,
      and
    6. consists of a sole original bill of lading or, if issued in more than one original, the full set as so issued,
      and
    7. contains no indication that the carrying vessel is propelled by sail only,
      and
    8. in all other respects meets the stipulations of the Credit.
  2. Even if the Credit requires the presentation of a charter party contract in connection with a charter party bill of lading, banks will not examine such charter party contract, but will pass it on without responsibility on their part.
Multimodal Transport Document
Article 26
  1. If a Credit calls for a transport document covering at least two different modes of transport (multimodal transport), banks will unless otherwise stipulated in the Credit, accept a document, however named, which:
    1. appears on its face to indicate the name of the carrier or multimodal transport operator and to have been signed or otherwise authenticated by :
      * the carrier or multimodal transport operator or a named agent for or on behlaf of the carrier or multimodal transport operator, or
      * the master or a named agent for or on behalf of the master.
      Any signature or authentication of the carrier, multimodal transport operator or master must be indentified as carrier, multimodal transport operator or master, as the case may be. An agent signing or authenticating for the carrier, multimodal transport operator or master must also indicate the name and the capacity of the party, i.e. carrier, multimodal transport operator or master, on whose behalf that agent is acting,
      and
    2. indicates that the goods have been dispatched, taken in charge or loaded on board.
      Dispatch, taking in charge or loading on board may be indicated by wording to that effect on the multimodal transport document and the date of issuance will be deemed to be the date of dispatch, taking in charge or loading on board and the date of shipment, However, if the document indicates, by stamp or otherwise, a date of dispatch, taking in charge or loading on board, such date will be deemed to be the date of shipment.
      and
      1. indicates the place of taking in charge stipulated in the Credit which may different from the port, airportor place of loading, and the place offinal destination stipulated in the Credit which may be different from the port, airport or place of discharge,
        and / or
      2. contains the indication " intended " or similar qualification in relation to the vessel and / or port of loading and / or port discharge,
      and
    4. consists of a sole original multimodal transport document or, if issued in more than one original, the full set as so issued,
      and
    5. appears to contain all of the terms and conditions of carriage, or some of such terms and conditions by reference to a source or document other than the multimodal transport document (short form / blank back multimodal transport document) ; banks will not examine the contents of such terms and conditions,
      and
    6. contains no indication that it is subject to a charter party and / or no indication that the carrying vessel is propelled by sail only.
      and
    7. in all other respects meets the stipulations of the Credit.

  2. Even if the Credit prohibits transhipment, banks will accept a multimodal transport document which indicates that the transhipment will or may take place, provided that the entire cariage is covered by one and the same multimodal transport document.
Air Transport Document
Article 27
  1. If a Credit calls for a air transport document, banks will , unless otherwise stipulated in the Credit, accept a document, however named, which :
    1. appears on its face to indicate the name of the carrier and to have been signed or otherwise authenticated by:
      * the carrier, or
      * a named agent for or on behalf of the carrier.
      Any signature or authentication of the carrier must be identified as carrier. An agent signing or authenticating for the carrier must also indicate the name and the capacity of the pary party, i.e. carrier, on whose behalf that agent is acting,
      and
    2. indicates that the goods have been accepted for carriage,
      and
    3. where the Credit calls for an actual date of dispatch, indicates a specific notation of such date, the date of dispatch so indicated on the air transport document will be deemed to be the date of shipment.
      For the purpose of this Article, the information appearing in the box on the air transport document (marked " For Carrier Use Only " or similar expression ) relative to the flight number and date will not be considered as a specific notation of such date of dispatch.
      In all other cases, the date of issuance of the air transport document will be deemed to be the date of shipment,
      and
    4. indicates the airport of departure and the airport of destination stipulated in the Credit,
      and
    5. appears to be the original for consigonor / shipper even if the Credit stipulates a full set of original, or similar expressions,
      and
    6. appear to contain all of the terms and conditions of carriage, or some of such terms and conditions, by reference to a source or document other than the air transport document; banks will not examine the contents of such terms and conditions,
      and
    7. in all other respects meets the stipulations of the Credit.
  2. For the purpose of this Article, transhipment means unloading and reloading from one aircraft to another aircraft during the course of carriage from the airport of departure to the airport of destination stipulated in the Credit.
  3. Even if the Credit prohibits transhipment, banks will accept and air trasnport document which indicates that transshipment will or may take place, provided that the entire carriage is covered by one and the same air transport document.
Road, Rail or Inland Waterway Transport Doucemnts
Article 28
  1. If a Credit calls for a road, rail, or inland waterway transport document, banks will, unless other wise stipulated in the Credit, accept a document of the type called for, however named, which:
    1. appears on its face to indicate the name of the carrier and to have been signed or otherwise authenticated by the carrier or a named agent for or on behalf of the carrier and / or to bear a reception stamp or other indication of receipt by the carrier or a named agent for or on behalf of the carrier.
      Any signature, authentication, reception stamp or other indication of receipt of the carrier, must be identified on its face as that of the carrier. An agent signing or authenticating for the carrier, must also indicate the name and the capacity of the party, i.e. carrier, on whose behalf that agent is acting,
      and
    2. indicates that the goods have been received for shipment, dispatch or carriage or wording to this effect. The date of issuance will be deemed to be the date of shipment unless the transport document contains a reception stamp, in which case the date of the reception stamp will be deemed to be the date of shipment,
    3. indicates the place of shipment and the place of destination stipulated in the Credit,
    4. in all other respects meets the stipulations of the Credit.
  2. In the absence of any indication on the transport document as to the numbers issued, banks will accept the transport doucmnt(s) presented as constituting a full set. Banks will accept as original(s) the transport document(s) whether marked as original(s) or not.
  3. For the purpose of this Article, transshipment means unloading and reloading from one means of conveyance to another means of conveyance, in different modes of transport, during the conveyance, in different modes of transport, during the course of carriage from the place of shipment to the place of destination stipulated in the Credit.
  4. Even if the Credit prohibits transshipment, banks will accept a road, rail, or inland waterway transport document which indicates that transhipment will or may take place, provided that the entire carriage is covered by one and the same transport document and within the same mode of transport.
Courier and Post Receipts
Article 29
  1. If a credit calls for a post receipt or certificate of posting, banks will, unless otherwise stipulated in the Credit, accept a post receipt or certificate of posting which:
    1. appears on its face to have been stamped or otherwise authenticated and dated in the place from which the Credit stipulates the goods are to be shipped or dispatched and such date will be deemed to be the date of shipment or dispatch,
      and
    2. in all other respects meets the stipulations of the Credit.
  2. If a Credit calls for a document issued by a courier or expedited delivery service evidencing receipt of the goods for delivery, banks will, unless otherwise stipulated in the Credit, accept a document, however named, which:
    1. appears on its face to indicate the name of the courier / service, and to have been stamped, signed or otherwise authenticated by such named courier / service (unless the Credit specifically calls for a document issued by any Courier / Service),
      and
    2. indicates a date of pick-up or of receipt or wording to this effect, such date being deemed to be the date of shipment or dispatch,
      and
    3. in all other respects meets the tstipulations of the Credit.
Transport Documents issued by Freight Forwarders
Article 30
Unless otherwise authorized in the Credit, banks will only accept a transport document issued by a freight forwarder if it appears on its face to indicate:
  1. the name of the freight forwarder as a carrier or multimodal transport operator and to have been signed or otherwise authenticated by the freight forwarder as carrier or multimodal transport operator
or
The name of the carrier or multimodal transport operator and to have been signed or otherwise authenticated by the freight forwarder as a named agent for or on behalf of the carrier of multimodal transport operator.

"On Deck", " Shipper's Load and Count", Name of Consignor
Article 31
Unless otherwise stipulated in the Credit, banks will accept a transport document which:
  1. does not indicate, in the case of carriage by sea or by more than one means of conveyance including carriage by sea, that the goods are or will be loaded on deck. Nevertheless, banks will accept a transport document which contains a provision that the goods may be carried on deck, provided that it does not specifically state that they are or will be loaded on deck,
    and / or
  2. bears a clause on the face thereof such as " shipper¡¦s load and count ¡§ or ¡¥ said by shipper to contain ¡§ or words of similar effect,
    and / or
  3. indicates as the consignor of the goods a party other than the Beneficiary of the Credit.
Clean Transport Documents
Article 32
  1. A clean transport document is one which bears no clause or notation which expressly declares a defective condition of the goods and / or the packaging.
  2. Banks will not accept transport documents bearing such clauses or notations unless the Credit expressly stipulates the clauses or notations which may be accepted.
  3. Banks will regard a requirement in a Credit for a transport document to bear the clause ¡§ clean on board ¡§ as complied with if such transport document meets the requirements of this Article and of Articles 23, 24, 25, 26, 27, 28 or 30.
Freight Payable / Prepaid Transport Documents
Article 33
  1. Unless otherwise stipulated in the Credit, or inconsistent with any of the documents presented under the Credit, banks will accept transport documents stating that freight or transportation charges (hereafter referred to as ¡§freight¡¨) have still to be paid.
  2. If a Credit stipulates that the transport documents has to indicate that freight has been paid or prepaid, banks will accept a transport documents on which words clearly indicating payment or prepayment of freight appear by stamp or otherwise, or on which payment or prepayment of freight is indicated by other means. If the Credit requires courier charges to be paid or prepaid banks will also accept a transport document issued by a courier or expedited delivery services evidencing that courier charges are for the account of the account of a party other than the consignee.
  3. The words ¡§freight prepayable¡¨ or "freight to be prepaid¡¨ or words of similar effect, if appearing on transport documents, will not be accept as constituting evidence of the payment of freight.
  4. Banks will accept transport documents bearing reference by stamp or otherwise to costs additional to the freight, such as costs of, or disbursements incurred in connection with, loading unloading or similar operations, unless the conditions of the Credit specifically prohibit such reference.
Insurance Documents
Article 34
  1. Insurance documents must appear on their face to be issued and signed by insurance companies or underwriters or their agents
  2. If the insurance documents indicates that it has been issued in more than one original, all the originals must be presented unless otherwise authorized in the Credit.
  3. Cover notes issued by brokers will not be accepted, unless specifically authorized in the Credit.
  4. Unless otherwise stipulated in the Credit, banks will accept an insurance certificate or a declaration under an open cover pre-signed by insurance companies or underwriters or their agents. If a Credit specifically calls for an insurance certificate or a declaration under an open cover, banks will accept, in lieu thereof, an insurance policy.
  5. Unless otherwise stipulated in the Credit, or unless it appears from the insurance documents that the cover is effective at the latest from the date of loading on board or dispatch or taking in charge of the goods, banks will not accept an insurance document which bears a date of issuance later than the date of loading on boad or dispatch or taking in charge as indicated in such transport document.
    1. Unless otherwise stipulated in the Credit, the insurance document must be expressed in the same currency as the Credit.
    2. Unless otherwise stipulated in the Credit, the minimum amount for which the insurance document must indicate the insurance cover to have been effected is the CIF (cost, insurance and freight (¡K ¡§ named port of destination¡¨)) or CIP (carriage and insurance paid to (¡K¡¨named place of destination¡¨)) value of the goods, as the case may be, plus10%, but only when the CIF or CIP value can be determined from the documents on their face. Otherwise, banks will accept as such minimum amount 110% of the amount for which payment, acceptance or negotiation is requested under the Credit, or 110% of the gross amount of the invoice, whichever is the greater.
Type of Insurance Cover
Article 35
  1. Credits should stipulate the type of insurance required and, if any, the additional risks which are to covered. Imprecise terms such as ¡§ usual risks ¡¨ or ¡§ customary risks ¡§ shall not be used; if they are used, banks will accept insurance document as presented, without responsibility for any risks not being covered.
  2. Failing specific stipulations in the credit, banks will accept insurance documents as presented, without responsibility for any risk not being covered.
  3. Unless otherwise stipulated in the Credit, banks will accept an insurance document which indicates that the cover is subject to a franchise or an excess (deductible).
All Risks Insurance Cover
Article 36
Where a Credit stipulates ¡§ insurance against all risks ¡§, banks will accept an insurance document which contains any ¡§ all risk ¡§ notation or clause, whether or not bearing the heading ¡§ all risks ¡§ , even if the insurance document indicates that certain risks are excluded, without responsibility for any risk(s) not being covered.

Commercial Ivoices
Article 37
  1. Unless otherwise stipulated in the Credit, commercial invoices;
    1. must appear on their face to be issued by the Beneficiary named in the Credit (except as provided in Article 48),
      and
    2. must be made out in the name of the Applicant (except as provided in sub-Article 48(h)).
      and
    3. need not be signed.
  2. Unless otherwise stipulated in the Credit, banks may refuse commercial invoices issued for amounts in excess of the amount permitted by the Credit, Nevertheless, if a bank authorized to pay, incur a deferred payment undertaking, accept Draft(s), or negotiate under a Credit accepts such invoice, its decision will be binding upon all parties, provided that such bank has not paid, incurred a deferred payment undertaking, accepted Draft(s) or negotiated for an amount in excess of that permitted by the credit.
  3. The description of the goods in the commercial invoice must correspond with the description in the Credit. In all other documents, the goods may be described in general terms not inconsistent with the description of the goods in the Credit.
Other Documents
Article 38
If a Credit calls for an attestation or certification of weight in the case of transport other than by sea, banks will accept a weight stamp or declaration of weight which appears to have been superimposed on the transport document by the carrier or his agent unless the Credit specifically stipulates that the attestation or certification of weight must be by means of a separate document.

UCP 500 - Correcting some misinterpretations
The ICC Commission on Banking Technique and Practice notes with regret, and concern, that following the coming into effect of the 'Uniform Customs and Practice for Documentary Credits' - UCP 500 - various banks have been applying unilateral and incorrect interpretations to certain of its Articles. By prejudicing the proper and correct application of the UCP 500 rules, the effect has been to seriously interfere with the use of the documentary letter of credit issued in accordance with the UCP, as the means for effective and secure settlement of trade transactions on a worldwide basis.
For the first time, this latest revision of the banking rules specifically included mention of certain long-standing and customary banking practices but, in some cases, their mention has been read, quite incorrectly, as indicating changes in practice. We of the Banking Commission are greatly concerned that the misinterpretations and misapplications of the particular Articles of UCP 500 involved, adversely effect not only the banks along the transaction chain, but also their customers whether applicants or beneficiaries under the Credits and, at the same time, carriers and freight forwarders who may also be involved in ensuring the correctness of documentation to comply with the particular documentary letter of credit.
In the special circumstances, the Banking Commission has authorised the issuance of the attached 'Position Papers' to emphasise the need to correctly interpret and apply UCP 500 subArticle 9(d)(iii) - Amendments; sub-Article 10(b)(ii) - Negotiation; sub-Article 13(c) - Non-documentary conditions; and the related sub-Articles of Articles 23, 24, 25, 26, 27, 28, 29 and 30 - Transport Documents. Failure to interpret the sub-Articles as indicated, in future, should be seen as in violation of the principles of UCP 500.
Consequently, the Banking Commission strongly urges that ICC National Committees, and associated organisations, distribute the Position Papers as widely as possible to help in ensuring the future smooth running of the documentary credit issued under the protection of UCP 500, which has been disturbed unnecessarily as indicated above. The point is, of course, made that the Position Papers do not amend the sub-Articles of UCP 500 in any way but merely indicate the correct interpretation of particular sub-Articles.
Charles del Busto
Chairman, ICC Commission on Banking Technique and Practice
(1994)

POSITION PAPER N° 1
UCP 500 sub-Article 9(d)(iii)
Amendments
The Banking Commission strongly disagrees with the wrong practice adopted by:
a) certain Issuing Banks, of issuing irrevocable documentary credits, or amendments to irrevocable documentary credits, incorporating a provision to the effect that any amendment will become automatically effective unless formally rejected by the beneficiary within a specified period of time, or by a specified date:
b) certain Advising Banks, of adding a provision of the nature set out in (a) above when advising an irrevocable documentary credit, or an amendment to an irrevocable documentary credit.
The essence of an irrevocable documentary credit is clearly set out in the sub-Article 9(d)(i) statement that: 'an irrevocable credit can neither be amended nor cancelled without the agreement of the Issuing Bank, the Confirming Bank, if any, and the Beneficiary'.
The practices referred to above are seen as changing the irrevocable nature of the documentary credit irrevocable undertaking.
Moreover, the presumption that a beneficiary's silence amounts to his acceptance of an amendment is contrary to national law in many countries. An attempt of the nature referred to above to over-rule sub-Article 9(d)(iii) may therefore lack legal effect.
Banks are wrong in assuming that sub-Article 9(d)(iii) involves a change of policy. It merely states the position which existed prior to the introduction of UCP 500, and indicates the alternative ways in which the beneficiary may choose to signify his acceptance and avail himself of an amendment to an irrevocable documentary credit which has been offered to him by the Issuing Bank and, where appropriate, by the Confirming Bank - or whereby he may indicate his rejection of such amendment.

POSITION PAPER N° 2
UCP 500 sub-Article 10(b)(ii)
Negotiation
The Banking Commission notes with regret that, notwithstanding the clear definition contained in the above sub-Article, a number of banks fail to understand the meaning of the term 'negotiation' in connection with the availability of a documentary credit.
The term 'negotiation' is defined in sub-Article 10(b)(ii) as 'the giving of value for Draft(s) and/or document(s) by the bank authorised to negotiate'. The Banking Commission wishes to clarify that for the purposes of UCP 500, the phrase 'giving of value' in sub-Article 10(b)(ii) may be interpreted as either'making immediate payment' (e.g. by cash, by cheque, by remittance through a Clearing System or by credit to an account) or 'undertaking an obligation to make payment' (other than giving a deferred payment undertaking or accepting a draft).
The view has also been expressed that where a documentary credit is stated to be available by'negotiation', it is essential for the beneficiary to seek and/or secure 'negotiation' from the Nominated Bank if he wishes to avail himself of the documentary credit.
The Banking Commission disagrees with this view, which it emphasises is in conflict with both the provisions and intent of sub-Articles 9(a)(iv) and (b)(iv) and 10(c), where the relative undertakings of the Issuing Bank and the Confirming Bank (if any), as well as the position of the Nominated Bank, are clearly stated.
Failure by the beneficiary to seek and /or secure 'negotiation' from the Nominated Bank under a documentary credit which allows negotiation, does not affect the undertakings of the Issuing Bank and/or the Confirming Bank (if any), nor does it constitute non-compliance with the documentary credit terms, provided that conforming documents are presented by the beneficiary within the validity of the documentary credit and the sub-Article 43(a) period of time where appropriate, to a Nominated Bank or direct to the Confirming Bank (if any) or to the Issuing Bank.

POSITION PAPER N° 3
UCP 500 sub-Article 13(c)
Non-documentary conditions
The provisions of this sub-Article have the specific purpose of eradicating the totally wrong practice of incorporating non-documentary condition(s) into documentary credits.
Such practice defeats the underlying principle of the documentary credit itself and directly contradicts the wording of Articles 2 - 'Meaning of Credit'; 4 - 'Documents V Goods/Services/Performances; 5(b) - 'Instructions to Issue/Amend Credits'; and 13(a) - 'Standard for Examination of Documents', all of which clearly indicate that payment, acceptance or negotiation under a documentary credit is to be effected against documents stipulated in the documentary credit.
The Banking Commission therefore expresses its strong disapproval of the fact that notwithstanding the provisions of sub-Article 13(c), certain banks continue to issue documentary credits and amendments thereto which contain a non-documentary condition(s).
Furthermore, it is evident that such wrong practice is causing severe problems to all parties involved in documentary credit transactions.
The Banking Commission wishes to remind banks, therefore, that where a documentary credit or amendment thereto contains one or more conditions and does not state the document(s) to be presented to evidence compliance therewith, sub-Article 13(c) clearly provides that banks will deem such a condition(s) as not stated and will disregard it (them).
Accordingly, banks will accept as a valid tender under the documentary credit stipulated documents which appear to be in accordance with all other terms and conditions of the documentary credit.
Sometimes, however, a condition appears in a documentary credit which can be clearly linked to a document stipulated in that documentary credit. Such a condition is not then deemed to be a non-documentary condition. For example, if a condition in the documentary credit states that the goods are to be of German origin and no Certificate of Origin is called for, the reference to 'German origin' would be deemed to be a non-documentary condition and disregarded in accordance with UCP 500 sub-Article 13(c). If, however, the same documentary credit stipulated a Certificate of Origin, then there would not be a non-documentary condition as the Certificate of Origin would have to evidence the German origin. (See also ICC Publication n° 511, 'UCP 500 and 400 Compared - page 42.)
It should therefore be clear that banks should include any appropriate 'condition(s)' in the detail of the document(s) stipulated, or state expressly the document which is to evidence compliance with a specific 'condition(s)'.

POSITION PAPER N° 4
UCP 500 - Transport documents articles.

Article 23
Marine/Ocean bill of lading

Article 24
Non-negotiable sea waybill
In view of the controversy surrounding some individual interpretations of sub-paragraph (a)(i) of these Articles, the Banking Commission wishes to clarify the position by setting out requirements as under:
  1. The name of the carrier must appear as such on the front of the document. The expression 'the front of the document' means the side showing the details of the goods, vessel and voyage, and the expression 'the back of the document' means the side showing the details of the contract of carriage. NOTE - Sub-paragraph (a)(v) of these UCP Articles states that banks will not examine the contents of the terms and conditions of carriage.
    Banks will therefore reject documents which fail to comply with the requirement set out in '1' above, i.e. which fail to indicate the name of the carrier on the front of the document, even though the identify of the carrier may be indicated on the back of the document.
  2. Where the document is signed by the carrier, it is not necessary for the word 'carrier' to appear again in the signature box when it has already been used on the front of the document to identify the party acting as carrier.
  3. Where the document is signed by an agent for (or 'on behalf of') the carrier, the agent must be named and must indicate the principal for (or'on behalf of') whom he is signing, in one of the following ways:
    (a) when the word 'carrier' has not been used on the front of the document to identify the party acting as carrier, e.g. ABC Co. Ltd. as agent for (or 'on behalf of') XYZ Shipping, carrier (signature)
    (b) when the word 'carrier' has been used on the front of the document to identify the party acting as carrier, either, e.g. ABC Co. Ltd. as agent for (or 'on behalf of') XYZ Shipping, carrier (signature)
    or ABC Co. Ltd. as agent for (or 'on behalf of') XYZ Shipping (signature) or ABC Co. Ltd. as agent for (or 'on behalf of') the above named carrier (signature) or ABC Co. Ltd. as agent for (or 'on behalf of') the carrier (signature)
  4. It is not necessary for the name of the Master to be quoted when the document is signed by the Master. When the document is signed by an agent for (or 'on behalf of') the Master, the agent must be named and must quote the name of the Master for (or 'on behalf of') whom he is signing, e.g. ABC Co. Ltd. as agent for (or 'on behalf of') John Doe, Master, (signature)
Article 25
Charter party bill of lading
In respect of this Article there has not been found need for interpretative comment.
This is the type of document most likely to be signed by the Master, or for (or 'on behalf of') the Master. The requirement '4' above in respect of Articles 23 and 24 also applies to Article 25.

Article 26
Multimodal transport document
The requirements detailed in respect of Articles 23 and 24 above also apply to Article 26, but it should be noted that:
Many major multimodal transport operators (MTOs) use a multi-purpose format document, titled, for example:
'Bill of Lading for Combined Transport Shipment or Port-to-Port Shipment', or
'Non-Negotiable Sea Waybill for Combined Transport Shipment or Port-to-Port Shipment'
A document issued with either title above is also acceptable under Article 26, provided that the data content on the front of the document satisfies the requirement in the documentary credit for multimodal transport and for a negotiable document or for a non-negotiable document as the case may be.
A multimodal transport document may possible show the word 'carrier' and not the words 'multimodal transport operator' - this is acceptable under the 'carrier or multimodal transport operator' wording of Article 26.

Article 27
Air transport document

Article 28
Road, rail or inland waterway transport documents

Article 29
Courier and post receipts
In respect of these Articles there has not been found need for interpretative comment.

Article 30
Transport documents issued by freight forwarders
In addition to satisfying the requirements of Article 30 the transport document stipulated must, of course, also satisfy the requirements of Articles 23/28 according to the mode of carriage.