UCP 600 Comparison: Part 1
Article 1 - Application
In UCP 82, the equivalent of article 1 was covered under ‘General Provisions' and stated: "The provisions, definitions, interpretations contained in the following Articles are to be understood as uniform directions in regard to Commercial Documentary Credits, applicable exclusively when other express and previously agreed arrangements between the parties do not intervene, and when such contrary agreements are not expressed in the conditions of credits or of Commercial Letters of Credit."
It was not until the General Provisions and Definitions article of UCP 222 that references to the rules being binding on all parties appeared: "These provisions and definitions and the following articles apply to all documentary credits and are binding upon all parties thereto unless otherwise expressly agreed."
In UCP 400 the text moved from General Provisions to become article 1. For UCP 400 to be applicable, a credit was required to incorporate wording to the effect that it was subject to those rules. Reference to the applicability of UCP to a standby credit was made for the first time.
The next change of any significance came in UCP 600 with respect to the application of the rules and the requirement for an express indication in the text of the credit.
Article 2 - Definitions
Despite the fact that sections titled "General Provisions and Definitions" appeared in UCP 222 and 290, this is a new article within UCP.
The two earlier publications provided basic definitions for terms such as "documentary credit(s)" and "credit(s)" and very broadly defined the roles of the issuing bank, applicant and beneficiary.
Whilst some definitions existed in varying forms in the past, the publication of UCP 600 was the first time that they had been formally consolidated in one article for ease of reference.
Article 3 - Interpretations
This is a new article within UCP. Whilst some of the interpretations have existed in varying formats in the past, this is the first time that they have been consolidated in one article for ease of reference.
The most common interpretation that appeared in early revisions of UCP was in respect of revocable and irrevocable credits.
In UCP 82, article 3, it is stated: "All credits, unless clearly stipulated as irrevocable, are considered revocable, even though an expiry date is specified.
In UCP 500, sub-articles 6 (b) and (c), it was changed to read: "The credit, therefore, should clearly indicate whether it is revocable or irrevocable" and "In the absence of such indication the Credit shall be deemed to be irrevocable."
UCP 600 removed all reference to revocable credits.
UCP 500, article 2 introduced the interpretation of branches of a bank by stating: "For the purposes of these Articles, branches of a bank in different countries are considered another bank."
UCP 600 modified this from ‘another bank' to ‘separate banks'.
UCP 82, article 42, the terms "prompt", "immediately", "as soon as possible" and others of similar import were interpreted as a request for shipment within 30 days from the notification to the beneficiary, unless a date was stipulated.
Article 4 - Autonomy
UCP 82 and UCP 151 both stated in article 1 that: "Commercial Documentary Credits are essentially distinct transactions from sales contracts, on which they may be based, with which Banks are not concerned."
The wording in UCP 222, General Provisions & Definitions (c), is almost identical to that which appears today: "Credits, by their nature, are separate transactions from the sales or other contracts on which they may be based and banks are in no way concerned with or bound by such contracts."
UCP 82, General Provision (c), also stated: "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."
This wording was further developed in UCP 222, General Provisions & Definitions (f), to read almost as it does today "A beneficiary can in no case avail himself of the contractual relationships existing between banks or between the applicant for the credit and the issuing bank."
Article 5 - Documentary independence
It was not until UCP 151, article 10, that reference to this issue first appeared: "In documentary credit operations, all parties concerned deal in documents and not in goods."
UCP 400, article 4, widened the scope by stating: "In credit operations all parties concerned deal in documents, and not in goods, services and/or other performances to which the documents may relate."
UCP 500 made the change to reflect that banks deal with documents and not with goods, services or performance.
UCP 600 makes the correct distinction that the rule should refer specifically to the actions of banks and not ‘all parties concerned'.