International Payments UCP500 PAGE 6.10 – 1. WHEN DOES UCP 500 Apply? Art 1 - For the UCP500 to apply, it must be incorporated into the text of the credit. (ie Actual Reference within the contract for it to be applicable) If it has not been included within the contract, it may be possible to argue it as the set of rules in relation to trade (ie can it be implied). “general” 2. WHAT IS A LETTER OF CREDIT (under UCP500)? Art 2 - Definition of a letter of credit: arrangement, however named or described, whereby a bank (the Bank”) “Any “issuing acting at the request and on the instructions of a customer (the or on its own “Applicant”) behalf, Issuing Bank = Buyers Bank Seller = Beneficiary = Sellers Bank = Applicant/Account Party Collecting/Advising Bank Buyer is to make a payment to, or; to the order of a 3rd party (the or; “Beneficiary”), is to accept and pay bills of exchange (Draft(s)) drawn by the Beneficiary authorises another bank to effect such payment, or; to accept and pay such bills of exchange (Draft(s)) another bank to negotiate, against stipulated document(s), provided that the and conditions of the Credit are complied with
International Payments UCP500 – PAGE 6.10 1. WHEN DOES UCP 500 Apply? Art 1 - For the UCP500 to apply, it must be incorporated into the text of the credit. (ie Actual Reference within the contract for it to be applicable) If it has not been included within the contract, it may be possible to argue it as the “general” set of rules in relation to trade (ie can it be implied). 2. WHAT IS A LETTER OF CREDIT (under UCP500)? Art 2 - Definition of a letter of credit: “Any arrangement, however named or described, whereby a bank (the “issuing Bank”) acting at the request and on the instructions of a customer (the “Applicant”) or on its own behalf, Issuing Bank = Buyers Bank Seller = Beneficiary Collecting/Advising Bank = Sellers Bank Buyer = Applicant/Account Party is to make a payment to, or; to the order of a 3rd party (the “Beneficiary”), or; is to accept and pay bills of exchange (Draft(s)) drawn by the Beneficiary authorises another bank to effect such payment, or; to accept and pay such bills of exchange (Draft(s)) another bank to negotiate, against stipulated document(s), provided that the and conditions of the Credit are complied with
International_Payments.docx