1.

A documentary credit subject to UCP 500 bears a title "Irrevocable

Documentary Credit" has a special condition as follows:

"This documentary credit will become inoperative upon receipt of a

cable to this effect from the issuing bank after issuance."

After receipt of such a cable advice, the beneficiary made a

presentation nevertheless. The issuing bank sent a refusal notice by
SWIFT pointing out a discrepancy as follows:

"Documents presented after expiry of the documentary credit render

the presentation discrepant."

Is the issuing bank correct in its refusal?

What would be the situation if the same credit is subject to UCP 600?

2. Is the following refusal notice acceptable for a DC subject to UCP

600?

"We refuse the documents and have found the following three
discrepancies in the presented documents:

1. The port of discharge in the B/L is not the same as that stated
in the DC.
2. Presentation after expiry.
3. Corrections in the certificate of origin are not authenticated by
the issuer."

3. What is an "unconfirmed letter of credit" under UCP 600?

4. Is it possible that a confirmed letter of credit subject to UCP 600

becomes an unconfirmed letter of credit without the consent of the
beneficiary?

5. Is the following refusal notice acceptable for a DC subject to UCP

600?

"We have found the following three discrepancies in the presented

documents:

1. The port of discharge in the B/L is not the same as that stated
in the DC.
2. Presentation after expiry.

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 3. Corrections in the certificate of origin are not authenticated by
the issuer.

Meanwhile we are holding the documents at your disposal and risk."

6. An applicant informed the issuing bank that the goods were rubbish
and asked the issuing bank to freeze payment under a DC subject to
UCP 500/600 due to trade frauds although the documents presented
were all compliant. Should the issuing bank follow the instructions
from the applicant?

7. Is this refusal notice acceptable for a DC subject to UCP 600?

"We refuse to pay you due to the following three discrepancies:

1. The commercial invoice does not meet the terms and conditions
of the DC.
2. Third party B/L presented.
3. Unclean B/L presented.

Meanwhile we are holding the documents at your disposal and risk."

8. A DC subject to UCP 500 issued by Bank I was confirmed by Bank C

expiring on 1 September 2002. There was no restriction on the
presentation. The beneficiary presented the documents to Bank I on 29
August 2002. Is this the best practice? What are the risks?

If the DC were subject to UCP 600, would your answer be the same?

9. A presenting bank had the following messages in its covering

letter/schedule dated 24 July 2007 presented against a DC subject to
UCP 600.

"We have found the following discrepancies in the documents:

1. The port of discharge in the B/L is not the same as that stated
in the DC.
2. Presentation after expiry.
3. Corrections in the certificate of origin are not authenticated by
the issuer.

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 The documents are now presented for collection. Please approach the
applicant for a waiver and give us your authority to negotiate by
SWIFT message."

The issuing bank sent its refusal notice as follows:

"After consulting the applicant, we determine to refuse the documents

due to the three discrepancies with the underlying reasons as
stipulated in your covering letter/schedule dated 24 July 2007.

Meanwhile, we are holding the documents at your disposal and risk."

10. A nominated paying bank sent three refusal notices on the same day
under a DC subject to UCP 600. The first notice was sent by fax listing
all the discrepancies with reasons; the second notice made by
telephone advising payment dishonor and the third notice sent by telex
advising that documents were returned to the presenter by local
courier. Is this acceptable? Please state your reasons.

11. UCP 600 article 3 states that:

"Branches of a bank in different countries are considered to be

separate banks."

UCP 500 Article 2 states that:

"For the purpose of these Articles, branches of a bank in different

countries are considered another bank."

Charles del Busto explained in ICC Publication No. 511 "UCP 500
and 400 Compared" that the underlying reason is because branches of
the bank in different countries may be subject to different jurisdictions.
What is legal for the head office of a bank may not be also legal in its
branches in different countries.

Hong Kong was a British territory before 1 July 1997. After 1 July
1997, Hong Kong became part of the People's Republic of China
(PRC) but it practices "One Country Two Systems" whereby the
applicable law in Hong Kong is the Basic Law (Common Law)
whereas that of PRC is Civil Law.

On 24 July 2007, a documentary credit subject to UCP 600 issued by

Bank ABC Beijing Head Office was advised by its branch in Hong
Kong. There were disputes on the discrepancies between the
Beneficiary and the Bank ABC Head Office. The Beneficiary's law
firm served a strong letter to Bank ABC Hong Kong Branch showing

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 its intent to sue it in Hong Kong unless payment was made within 14
days. Bank ABC Hong Kong Branch replied as follows:

"Due to different jurisdictions between Hong Kong and PRC, we are in

fact a different bank according to the provisions of UCP 500 Article 2
(equivalent to UCP 600 article 3), based on the interpretation of
Charles del Busto in ICC Publication No. 511 "UCP 500 and 400
Compared". Hence as an advising bank we have no payment
obligations. Your client, as a beneficiary, should sue our Head Office
in Beijing instead."

Is the defense of Bank ABC Hong Kong Branch correct?

12. The applicant showed to the beneficiary a written undertaking from the
issuing bank for its agreement to issue a letter of credit subject to UCP
600. However, due to change in financial position of the applicant, the
issuing bank later decided not to do so. The beneficiary wrote to the
issuing bank to force its commitment in writing. Is the beneficiary
successful? Please give your reasons.

13. Under which condition that a confirmed letter of credit subject to UCP
600 may become unconfirmed without the consent of the beneficiary?

14. In determination of the compliance of a refusal notice with the UCP

600, should the stipulations of UCP 600 articles 14 and 16 be read
separately for (a) document examination for compliance, (b)
determination of refusal or acceptance and (c) sending of the refusal
notice respectively?

15. One set of Drafts drawn on the drawee bank presented under a
documentary credit subject to UCP 600 expiring on 30 August 2007
was accepted on 30 July 2007 for 30 days deferred payment but was
unpaid on maturity 30 August 2007. According to UCP 600 article 7
(a) (iv) the beneficiary made a new set of "replacement" Drafts
drawing on the issuing bank on 3 September 2007. The issuing bank
refused to pay the Drafts because they were drawn and presented after
expiry of the DC. Is the issuing bank correct in its decision? Please
state your reasons.

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16. An issuing bank sent its refusal notice on the 5th banking day after
receipt of the documents presented under UCP 600. In fact a simple set
of documents was presented for sales of kitchenware, consisting of a
total of 12 pages of documents. Is this refusal notice sent within
reasonable time?

17. An issuing bank sent its refusal notice to a presentation under UCP 600
to a presenting bank overseas by courier. Is this acceptable?

18. Under UCP 600, can a beneficiary, through a presenting bank, have the
right to present documents against a confirmed letter of credit directly
to the issuing bank?

19. A standby letter of credit subject to UCP 600 was issued to back up an
"open account" transaction where payment was made only 30 days
after the "shipped on board" date. The standby required presentation of
Drafts in duplicate, one Default Statement signed by the Beneficiary,
one copy of Commercial Invoice and one copy of "shipped on board"
B/L. It also specified that no presentation could be made until after
default in payment. The Issuing Bank sent its Refusal Notice as
follows:

"We refuse to pay due to the following discrepancy in the B/L:

The copy of B/L was presented more than 21 days after shipment,
which is against the stipulation in UCP 600 article 14 (c)."

Is the Issuing Bank correct in its refusal decision?

20. For a DC subject to UCP 600, what should the presenting bank advice
the beneficiary who asks for direct presentation to the issuing bank,
thereby by-passing the confirming bank?