Uniform Customs and Practice for Documentary Credits (UCP 600)

UCP 600 — in full, the Uniform Customs and Practice for Documentary Credits — is the set of rules published by the International Chamber of Commerce (ICC) governing payment by letter of credit. The current edition has been in force since 1 July 2007, runs to 39 articles, and replaced UCP 500.

First thing to know: UCP 600 does not apply automatically. It binds only when the credit itself states that it is subject to the rules. Almost every international commercial L/C carries that wording today, but it is still worth reading to be sure.

The core principle: banks deal in documents, not goods

This is what catches out companies using an L/C for the first time. The bank does not inspect the cargo, does not verify that it was really loaded, and does not look at the sales contract between the parties. It compares the documents you present against the conditions stated in the credit — nothing else.

The practical consequence: deliver perfectly and you still will not be paid if the documents are wrong. Conversely, if the documents comply, the bank must pay even while the buyer is disputing the quality of the goods. That is the independence of the credit from the underlying contract.

Deadlines that matter

• Five banking days to examine a presentation, counted from the day of presentation. UCP 500 said only “reasonable time”, which caused endless argument; UCP 600 fixed a number.
• Twenty-one calendar days after the shipment date is the deadline to present transport documents, unless the credit sets a shorter period — and never later than the expiry date of the credit.
• To refuse, the bank must send a single notice listing every discrepancy it relies on, by the close of the fifth banking day. It cannot refuse piecemeal, raising a fresh defect each time.

The three discrepancies we see most

Goods description on the invoice not matching the credit. The commercial invoice must describe the goods as the credit describes them. This is not the place to improve or condense the wording — a departure from the credit is enough to make the presentation discrepant.

Data conflicting between documents. Port names, weights, package counts and consignee details on the bill of lading, invoice, packing list and certificate of origin must be consistent. They need not be identical word for word, but they must never contradict each other.

Late presentation. Waiting until the vessel has sailed before starting to collect documents is the most common way to fall past the 21-day limit. The document set has to be prepared alongside the shipment, not after it.

UCP 600 and Incoterms are not the same thing

The two are mentioned together so often that they get conflated. Incoterms decides who arranges carriage and where risk passes; UCP 600 decides when the bank pays and against which documents. A single shipment uses both, and neither substitutes for the other — see our article on Incoterms® 2020 by the International Chamber of Commerce (ICC).

Where ORBIS SHIPPING helps

We build the transport document set to match the terms of the credit from the moment of booking: the right type of bill of lading consigned as required, a shipment date inside the window, and a packing list and certificate of origin whose figures agree with the invoice.

For shipments settled by letter of credit, send us the draft credit to review before you accept it. Correcting a line at that stage costs far less than amending a credit the bank has already issued.

ORBIS SHIPPING in the international network

ORBIS SHIPPING CO., LTD is a member of the Global Logistics Alliance (GLA), membership ID 1081053. That agent network is what lets us coordinate documents and delivery at the far end — the step that decides everything once a document set has to satisfy a credit issued by a foreign bank.

UCP 600 is ICC Publication No. 600. This article is ORBIS SHIPPING's own commentary; the rules themselves are published and distributed by the ICC through its official store.