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  • Time allowed to banks to examine the documents

     
     

    This is vitally important for all sellers. UCP 500 gave each bank involved in the credit a 'reasonable time, not to exceed seven banking days following the day of receipt of the documents' to examine the documents. Acceptance or rejection of the documents was therefore required within this period.

    In UCP 600 this has been changed to five banking days following the day of presentation.* However, if a bank decides on the second day that the documents are in order, must payment then be made immediately or can the bank wait till the full five days are up? Whereas Article 14(b) gives each bank five banking days to decide whether to pay, Article 15 says that a bank must honour the credit (pay) or give notice of refusal immediately it comes to that decision. To avoid getting ensnared in disputes over this sellers could stipulate in the sales contract that a specific condition be included in the letter of credit stating, for example:

    Payment by confirmed irrevocable letter of credit, incorporating UCP 600, providing for payment within 3 banking days of presentation of the following documents …

    * See Articles 14(b) and 16(d). To note that a "banking day" is defined in Article 2 not as simply a day the bank is open, but "regularly open at the place at which an act subject to these rules is to be performed".

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