Standard for Examination of Documents


As we have mentioned within a number of previous blogs, one of the more problematical areas within documentary credits is the examination of documents.

UCP 600 article 14, ‘Standard for Examination of Documents', as indicated by its title, provides some basic rules in respect of the examination of documents. These are supplemented by the content of ICC Publication 'International Standard Banking Practice for the Examination of Documents under UCP 600' (ISBP 745).

Articles 14 (and 15 & 16) contain rules that are applicable once the goods are shipped, or services or performance provided, and the stipulated documents have been collated and presented by, or on behalf of, the beneficiary, to a nominated bank, confirming bank or issuing bank.

These rules express the examination standards by which banks determine whether or not a presentation is complying (UCP 600 article 14), the requirements when a bank determines that a presentation complies (UCP 600 article 15), and the action required when a presentation is determined not to comply (UCP 600 article 16). 

UCP 600 article 14 - History and Development

UCP 82, article 10, contained a very simple rule regarding the examination of documents - 'Banks must examine all documents and papers with care so as to ascertain that on their face they appear to be in order.'

Reference to "on their face" first appeared in UCP 222, article 7 - 'Banks must examine all documents with reasonable care to ascertain that they appear on their face to be in accordance with the terms and conditions of the credit.'

UCP 290, article 7, added reference to the concept of "inconsistency" - 'Documents which appear on their face to be inconsistent with one another will be considered as not appearing on their face to be in compliance with the terms and conditions of the Credit.'

UCP 400, article 23, introduced the wording that is now the basis for UCP 600 sub-article 14 (f).

UCP 500, article 13, saw the first reference to a sub-heading in UCP described as 'Standard for Examination of Documents'.

UCP 600 article 14 and ISBP 745

As already mentioned, article 14 contains some key rules in respect of the standards to be adopted when examining documents presented under a documentary credit. These are supplemented and enhanced by the content of ISBP 745.

Some practitioners have argued that UCP and ISBP should be merged. When considering such a move, one needs to consider and appreciate that the success of UCP, for over 80 years, is down to its conciseness in being a set of rules instead of a 'how to', 'what if you do this' or 'what if this happens' publication. 

Apart from an obvious fact of making a much larger publication, there is a very strong case for keeping rules separate from a series of descriptions of practice. For example, a practice may be contested on the grounds that it is not applicable in a given situation or to a trade transaction involving parties from two or more specific countries, where other practices are the standard; however, rules will remain applicable to all parties unless the terms and conditions of the credit state otherwise (UCP 600 article 1). 

References in ISBP: the content or contexts of the sub-articles of UCP 600 article 14 are referenced in ISBP as follows:

  • Article 14 (in general) in Preliminary Considerations VI.
  • 14 (c) in paragraphs A6 (c), A18 (b) (ii) and (c), and A19 (b).
  • 14 (d) in paragraphs A6 (b), M4 and N4.
  • 14 (e) paragraphs D26, E22, F20, G20-21, H22, J17 and L1.
  • 14 (f) in paragraphs A10, A18 (a), B18, M1, N1, P4 and Q1.
  • 14 (h) in paragraph A26.
  • 14 (j) in paragraphs D20, E16, F14, G15, H16 and J11.

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