| <1> The importance of documents |
- Since L/C is a transaction based on the documents' independency and
abstractedness, payment is determine only by a purchasing bank and an opening bank's documents inspection that is presented by a beneficiary.
- UCP regulates the standard of decision for a bank to accept in writing on the
page D about all kinds of requisites for documents. |
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| <2> The kinds of documents |
- The standard documents are the essential documents required whether it is
documentary L/C or by any kind of L/C.(transportation documents, Commercial
invoice, bill of change, insurance documents etc.)
- An incidental document is a special requirement as a written regulation of L/C
(Factura consular, customs invoice, certificate of the country of origin, packing list, inspection certification, weight certification)
- Original and duplicate |
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1 If L/C requires number of documents in set: One original and the others
can be allot as duplicate.
2 Copied documents can be acknowledge as a orignal one if fulfill the
nest requisites only. |
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- Original mark has to be on the document itself.
- There should be the signature and the name of the person who pared the
documents (Signature can be depended on stamp, machine type or
electronic method other than handwriting).
(The Sub-Article No. 20-b of UCP 500) |
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| <3> Documents acceptance requisite (Related to a bank's L/C documents inspection) |
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- The presenting documents should be equipped with the correct number of
sets that L/C is requiring and should be completely same as the requisites
of L/C for Commercial invoice and bill of change however,
(Strict compliance) it is interpreted that as long as they are not against the
documents prepared by third parties such as transportation documents or
insurance documents, they are acceptable. (Substantial compliance).
Ex)
-If the item name of L/C indicates "Canned white peach", the item name of
the commercial invoice should be the same however, the item name on B/L
can be indicated as "Canned Fruit" |
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| 2 Level of correspondence between the documents presented with L/C |
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- For the question how much the amount indicated in L/C and the statement of
goods should be correspondent to the presented documents (bill of change,
B/L, invoice etc) is answer by UCP500 and it says the correspondence
should follow the International standard banking practice.
(The Sub-Article No. 13-a of UCP)
- According to a common view, it is not necessary mean identical
correspondence but the meaning of same is acceptable. |
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| 3 Mutual contradictoriness in documents |
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- All kinds of presenting documents should be corresponds to the L/C term,
however, as long as the mutual documents express the same matter in the
same way, it is acceptable. (The Sub-Article No. 13-a of UCP) |
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| 4 Effects when accepted counterfeit documents |
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- A purchasing bank and an opening bank have a burden to carefully and
reasonably examine when performing documents inspection per UCP
Article No. 13.
- As long as the said documents related to L/C are equipped with the general
conditions and the appearance, banks usually accepts as a custom and they
don't have responsibility for the fact.
- However, if there is a firm belief that the documents are counterfeit and that
the firm belief conforms to the fact, a bank must reject the acceptance of
such documents. |
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| 5 Effectiveness when documents presented are not stated in L/C |
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- If an exporter presents additional documents to a bank when not required: As per UCP500 regulation in writing, "the bank must return the documents to
an exporter without examination".
- If L/C fail to state the name of the required documents but only the terms to
equipped : UCP 500 regulates "Regard as if the L/C has no such terms
and ignore the term". |
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| 6 UCP stand point about examining counterfeit documents |
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- If a bank accepted the counterfeit documents insist wavier as per UCP500
Article No. 15, ICC states that the situation shouldn't be at least in the
following terms and it prescribes the range of the terms. (Meeting on 9,
Dec 1980, ICC Document 470/371, 470/373 Opinion P.27, R76) |
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1 If the employee of the purchasing bank prove to be involved with the
counterfeiting conduct.
2 If recognized the counterfeit fact before the documents were presented.
3 If the documents inconsistency exist and the counterfeit is clear. |
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Trade Helper 
L/C(Letter of Credit)
{1} Letter of credit
[10] Documents related to L/C 
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