100 Short Questions, Answers & Explanations on UCP 600

Short Question UCPDC 600

Posted on by

Short Question UCPDC 600

Question:01
What is UCPDC ?
Ans:Uniform Customs and Practice for Documentary Credits

Question:02
How many Articles in UCPDC 600 ?
Ans: 39 Articles

Question:03
What is the title of  Article 01  UCPDC 600 ?
Ans:Application of UCP

Question:04
What is the title of  Article 02  UCPDC 600 ?
Ans: Definitions

Question:05
What is the title of  Article 03  UCPDC 600 ?
Ans:Interpretitions

Question:06
What is the title of  Article 04  UCPDC 600 ?
Ans : Credits V. Contracts

Question:07
What is the title of  Article 05  UCPDC 600 ?

Ans : Documents V. Goods, Services or Performance

Question:08
What is the title of  Article 06  UCPDC 600 ?

Ans : Availability, Expiry Date and Place for presentation

Question:09
What is the title of  Article 07  UCPDC 600 ?

Ans : Issuing Bank Undertaking

Question:10
What is the title of  Article 08  UCPDC 600 ?

Ans : Confirming Bank Undertaking.

Question:11
What is the title of  Article 09  UCPDC 600 ?

Ans :  Advising of Credits and Amendments

Question:12
What is the title of  Article 10  UCPDC 600 ?

Ans : Amendments

Question:13
What is the title of  Article 11  UCPDC 600 ?

Ans : Teletransmitted and Pre-Advised Credits and Amendments

Question:14
What is the title of  Article 12  UCPDC 600 ?
Ans : Nomination

Question:15
What is the title of  Article 13  UCPDC 600 ?
Ans :BANK-TO-BANK REIMBURSEMENT ARRANGEMENTS

Question:16
What is the title of  Article 14  UCPDC 600 ?
Ans :STANDARD FOR EXAMINATION OF DOCUMENTS

Question:17
What is the title of  Article 15  UCPDC 600 ?
Ans : Complying Presentation

Question:18
What is the title of  Article 16  UCPDC 600 ?
Ans : Discrepant Documents,Waiver and Notice

Question:19
What is the title of  Article 17  UCPDC 600 ?
Ans : Original Documents and Copies

Question:20
What is the title of  Article 18  UCPDC 600 ?
Ans : Commercial Invoice

Question:21
What is the title of  Article 19  UCPDC 600 ?
Ans :Transport Document Covering at least Two Different Modes of Transport

Question:22
What is the title of  Article 20  UCPDC 600 ?
Ans :Bill of Lading

Question:23
What is the title of  Article 21  UCPDC 600 ?
Ans :Non- Negotiable Sea Waybill

Question:24
What is the title of  Article 22  UCPDC 600 ?
Ans :Charter Party Bill of Lading

Question:25
What is the title of  Article 23  UCPDC 600 ?
Ans :Air Transport Document

Question:26
What is the title of  Article 23  UCPDC 600 ?
Ans :Air Transport Document

Question:27
What is the title of  Article 24  UCPDC 600 ?
Ans :Road, Rail or Inland Waterway Transport Documents

Question:28
What is the title of  Article 25  UCPDC 600 ?
Ans :Courier Receipt, Post Receipt or Certificate of Posting

Question:29
What is the title of  Article 26  UCPDC 600 ?
Ans :“On Deck”, “ shipper’s Load and Count”, “Said by Sipper to Contain” and charges additional to Freight

Question:30
What is the title of  Article 27  UCPDC 600 ?
Ans :Clean Transport Document

Question:31
What is the title of  Article 28  UCPDC 600 ?
Ans :Insurance Document and Coverage

Question:32
What is the title of  Article 29  UCPDC 600 ?
Ans :Extension of Expiry Date or Last Day for Presentation

Question:33
What is the title of  Article 30  UCPDC 600 ?
Ans :Tolerance in Credit, Amount Quantity and Unit Prices

Question:34
What is the title of  Article 31  UCPDC 600 ?
Ans :Partial Drawings or Shipments

Question:35
What is the title of  Article 32  UCPDC 600 ?
Ans :Installment Drawing or Shipments

Question:36
What is the title of  Article 33  UCPDC 600 ?
Ans :Hours of Presentation

Question:37
What is the title of  Article 34  UCPDC 600 ?
Ans :Disclaimer on effectiveness of Documents

Question:38
What is the title of  Article 35  UCPDC 600 ?
Ans :Disclaimer on Transmission and Translation

Question:39
What is the title of  Article 36  UCPDC 600 ?
Ans :Force Majeure

Question:40
What is the title of  Article 37  UCPDC 600 ?
Ans :Disclaimer for Acts of an Instructed Party

Question:41
What is the title of  Article 38  UCPDC 600 ?
Ans : Transferable Credits

Question:42
What is the title of  Article 39  UCPDC 600 ?
Ans : Assignment of Proceeds

100 Short Questions, Answers & Explanations on UCP 600

General Overview

  1. Q: What does UCP stand for?
    A: Uniform Customs and Practice for Documentary Credits
    Explanation: A set of rules by the ICC governing documentary credits.

  2. Q: Which ICC publication number refers to UCP 600?
    A: Publication No. 600
    Explanation: Issued by the International Chamber of Commerce.

  3. Q: When did UCP 600 come into effect?
    A: 1 July 2007
    Explanation: Replaced UCP 500.

  4. Q: How many articles are in UCP 600?
    A: 39 articles
    Explanation: Covers definitions, responsibilities, and procedures.

  5. Q: Which ICC commission drafts UCP rules?
    A: Banking Commission
    Explanation: The ICC’s expert body for trade finance.

Definitions (Article 2)

  1. Q: What does “Credit” mean in UCP 600?
    A: Any arrangement, however named, that is irrevocable.
    Explanation: Binding undertaking by the issuing bank.

  2. Q: Define “Issuing Bank” under UCP 600.
    A: The bank that issues a credit at the request of an applicant.
    Explanation: Holds primary responsibility to pay.

  3. Q: Who is the “Beneficiary” in a credit?
    A: The party in whose favour the credit is issued.
    Explanation: Usually the seller/exporter.

  4. Q: What is a “Presentation”?
    A: Delivery of documents to the nominated bank or issuing bank.
    Explanation: As required by the credit.

  5. Q: What is meant by “Honour”?
    A: Payment at sight, acceptance of a draft, or deferred payment.
    Explanation: Obligations of the issuing/nominated bank.

Application of UCP (Article 1)

  1. Q: Is UCP 600 automatically applicable to all credits?
    A: No
    Explanation: It applies only if the credit states it is subject to UCP 600.

  2. Q: Can national laws override UCP 600?
    A: Yes
    Explanation: UCP is subordinate to applicable laws.

  3. Q: Does UCP 600 apply to standby LCs?
    A: Yes, if expressly stated.
    Explanation: Not automatic unless mentioned.

  4. Q: Who must incorporate UCP 600 in a credit?
    A: Issuing bank
    Explanation: Usually stated in credit terms.

  5. Q: Does UCP 600 cover collections?
    A: No
    Explanation: Collections are covered under URC 522.

Obligations of Banks

  1. Q: Is a credit revocable under UCP 600?
    A: No
    Explanation: All credits are irrevocable.

  2. Q: Who is responsible for examining documents?
    A: Nominated bank or issuing bank
    Explanation: Within 5 banking days.

  3. Q: What must a confirming bank do?
    A: Honour or negotiate as per credit terms.
    Explanation: Same responsibility as issuing bank.

  4. Q: Can an issuing bank refuse documents for minor errors?
    A: Yes, if non-complying.
    Explanation: Must be strictly compliant.

  5. Q: Is a bank concerned with goods quality?
    A: No
    Explanation: Banks deal with documents, not goods.

Presentation and Examination

  1. Q: How many banking days does a bank have to examine documents?
    A: 5 banking days
    Explanation: Article 14(b).

  2. Q: What is “Complying Presentation”?
    A: Documents in accordance with credit terms and UCP rules.
    Explanation: No discrepancies.

  3. Q: Who determines the place of presentation?
    A: The credit terms
    Explanation: Usually nominated bank’s counters.

  4. Q: Can partial shipments be made?
    A: Yes, unless prohibited.
    Explanation: Article 31.

  5. Q: Can presentation be electronic?
    A: Yes, if credit allows.
    Explanation: eUCP governs electronic presentations.

Documents

  1. Q: Is a bill of lading a transport document?
    A: Yes
    Explanation: Covers shipment by sea.

  2. Q: Who issues a bill of lading?
    A: Carrier or their agent.
    Explanation: Evidence of shipment.

  3. Q: What is a commercial invoice?
    A: Document stating goods description, price, and quantity.
    Explanation: Must match credit terms.

  4. Q: Is insurance document always required?
    A: No
    Explanation: Only if credit requires it.

  5. Q: Must the date of the bill of lading be before credit expiry?
    A: Yes
    Explanation: Shipment must occur before expiry.

Dates and Expiry

  1. Q: What is the “expiry date” in a credit?
    A: Last date for presentation of documents.
    Explanation: After that, no claim can be made.

  2. Q: Can expiry date be extended automatically?
    A: No
    Explanation: Must be amended.

  3. Q: What is “latest shipment date”?
    A: Final date goods must be shipped.
    Explanation: Mentioned in credit.

  4. Q: Can presentation be made after expiry?
    A: No
    Explanation: Unless bank agrees.

  5. Q: What happens if expiry date is a holiday?
    A: Presentation on next banking day.
    Explanation: Article 29.

Discrepancies

  1. Q: What is a discrepancy?
    A: Any difference from credit terms.
    Explanation: Leads to refusal.

  2. Q: Can a bank refuse for spelling errors?
    A: Yes, if they cause non-compliance.
    Explanation: Strict compliance principle.

  3. Q: What must a bank do when refusing documents?
    A: Give notice stating all discrepancies.
    Explanation: Within 5 banking days.

  4. Q: Can applicant waive discrepancies?
    A: Yes
    Explanation: But bank’s agreement is also needed.

  5. Q: What if documents are inconsistent?
    A: Treated as non-complying.
    Explanation: Must match each other and credit.

Interpretations (Article 3 & 4)

  1. Q: What does “on or about” a date mean in UCP 600?
    A: A range of 5 days before and after.
    Explanation: Gives flexibility for shipment/presentation.

  2. Q: Are expressions like “first half of a month” defined?
    A: Yes
    Explanation: First half = days 1–15, second half = day 16 to month end.

  3. Q: Do banks interpret documents based on trade customs?
    A: No
    Explanation: They examine only as per credit and UCP.

  4. Q: Does the term “banking day” include weekends?
    A: No
    Explanation: Only days banks are regularly open.

  5. Q: What does “at sight” mean in UCP 600?
    A: Payment upon presentation and examination of documents.
    Explanation: No deferred term.

Credits vs. Contracts (Article 4)

  1. Q: Is a credit separate from the sales contract?
    A: Yes
    Explanation: Banks deal with documents, not contracts.

  2. Q: Can an applicant use contract terms to reject documents?
    A: No
    Explanation: Only credit terms apply.

  3. Q: If sales contract says one thing and credit says another, which applies?
    A: Credit terms
    Explanation: UCP 600 Article 4(a).

  4. Q: Can banks amend a credit without applicant consent?
    A: No
    Explanation: All parties must agree.

  5. Q: Does UCP 600 require copies of the sales contract?
    A: No
    Explanation: Unless credit specifically asks.

Form of Documents

  1. Q: Must documents be original?
    A: Yes, unless stated otherwise.
    Explanation: Originals prove authenticity.

  2. Q: Can banks accept faxed documents?
    A: Only if credit permits.
    Explanation: Otherwise, originals are required.

  3. Q: Can documents be in a different language?
    A: Yes, if credit allows.
    Explanation: Language must be understood by bank.

  4. Q: Must documents be dated?
    A: Yes, unless not required.
    Explanation: Dates prove timelines.

  5. Q: Are signatures always required?
    A: Only when credit or document type demands it.
    Explanation: E.g., certificates often require signatures.

Transport Documents

  1. Q: Which article covers transport documents?
    A: Articles 19–25
    Explanation: Cover different transport modes.

  2. Q: Which article covers bills of lading?
    A: Article 20
    Explanation: For sea shipment.

  3. Q: What must a bill of lading show?
    A: Shipped on board date, carrier’s signature.
    Explanation: Confirms shipment.

  4. Q: Which article covers air waybills?
    A: Article 23
    Explanation: For air transport.

  5. Q: Who issues an air waybill?
    A: Carrier or its agent.
    Explanation: Must identify shipper and consignee.

Insurance Documents

  1. Q: Which article covers insurance documents?
    A: Article 28
    Explanation: States requirements for insurance coverage.

  2. Q: Must insurance cover be in the same currency as credit?
    A: Yes
    Explanation: Ensures proper valuation.

  3. Q: Minimum insurance coverage required if not specified?
    A: 110% of CIF or CIP value.
    Explanation: Protects against loss.

  4. Q: Can insurance be dated after shipment?
    A: No
    Explanation: Must be effective from shipment date.

  5. Q: Who must sign the insurance document?
    A: Insurer or their agent.
    Explanation: For authenticity.

Partial Shipments & Transhipment

  1. Q: Are partial shipments allowed by default?
    A: Yes
    Explanation: Unless credit prohibits.

  2. Q: Is transhipment allowed?
    A: Yes, unless prohibited.
    Explanation: UCP defines transhipment clearly.

  3. Q: What is transhipment?
    A: Moving goods from one vessel to another during transit.
    Explanation: Often used in container shipping.

  4. Q: If goods are in a container, does transhipment rule apply?
    A: No
    Explanation: Container shipments may involve transhipment even if not stated.

  5. Q: Which article covers partial shipments?
    A: Article 31
    Explanation: Details rules.

Expiry, Presentation, and Timelines

  1. Q: Which article defines expiry date?
    A: Article 6
    Explanation: Expiry location and date must be stated.

  2. Q: Can presentation be before shipment?
    A: No
    Explanation: Shipment must occur before presentation.

  3. Q: Maximum period after shipment for presentation if not stated?
    A: 21 calendar days.
    Explanation: Article 14(c).

  4. Q: Does expiry date override the 21-day rule?
    A: Yes
    Explanation: Must meet both.

  5. Q: Can a beneficiary request extension of expiry date?
    A: Yes, via amendment.
    Explanation: Requires applicant and bank consent.

Amendments

  1. Q: Which article covers amendments?
    A: Article 10
    Explanation: Rules for changing credit terms.

  2. Q: Must all parties agree to an amendment?
    A: Yes
    Explanation: Applicant, beneficiary, issuing bank.

  3. Q: Can a beneficiary reject an amendment?
    A: Yes
    Explanation: Credit remains as originally issued.

  4. Q: What happens if beneficiary is silent on an amendment?
    A: Deemed acceptance.
    Explanation: If presentation is made in line with amendment.

  5. Q: Can amendments reduce credit amount?
    A: Yes, if agreed.
    Explanation: Often done in negotiations.

Refusal of Documents

  1. Q: Which article covers refusal of documents?
    A: Article 16
    Explanation: Banks must give notice within 5 days.

  2. Q: What must a refusal notice include?
    A: All discrepancies and statement of refusal.
    Explanation: Complete and final.

  3. Q: Can a bank request applicant’s decision before refusal?
    A: Yes
    Explanation: But must still meet notice deadline.

  4. Q: What happens if bank misses 5-day deadline?
    A: Documents deemed compliant.
    Explanation: Must honour or negotiate.

  5. Q: Can a bank hold documents without refusal?
    A: No
    Explanation: Must act within rules.

Force Majeure & Liability

  1. Q: Which article covers force majeure?
    A: Article 36
    Explanation: No liability for events beyond control.

  2. Q: Are banks liable for loss of goods?
    A: No
    Explanation: Only deal with documents.

  3. Q: Are banks liable for delays by courier?
    A: No
    Explanation: Outside bank’s control.

  4. Q: Can banks be liable for document authenticity?
    A: No
    Explanation: They don’t verify genuineness beyond face value.

  5. Q: Does force majeure suspend bank obligations?
    A: Yes
    Explanation: Until operations resume.

Miscellaneous

  1. Q: Does UCP 600 require specific document formats?
    A: No
    Explanation: Credit defines format.

  2. Q: Can UCP 600 be modified?
    A: Yes, by agreement in the credit.
    Explanation: Custom terms can override.

  3. Q: Is UCP 600 a law?
    A: No
    Explanation: It’s a set of rules.

  4. Q: Who publishes UCP 600?
    A: International Chamber of Commerce.
    Explanation: Based in Paris.

  5. Q: Is UCP 600 binding internationally?
    A: Yes, if incorporated in credit.
    Explanation: Accepted worldwide.

Practical Scenarios

  1. Q: If shipment is early, is it allowed?
    A: Yes
    Explanation: Unless prohibited.

  2. Q: If goods are damaged, can bank refuse?
    A: No
    Explanation: Banks deal only with documents.

  3. Q: If beneficiary submits extra documents, will bank accept?
    A: Yes, if not conflicting.
    Explanation: Extras are ignored if not required.

  4. Q: If issuing bank becomes insolvent, who pays?
    A: Confirming bank (if confirmed).
    Explanation: It shares payment obligation.

  5. Q: Can UCP 600 be used for domestic LCs?
    A: Yes
    Explanation: Not limited to international trade.

Related posts:

  1. URR 725
  2. International Chamber of Commerce (ICC)
  3. What are the Articles of URR 725?
  4. The assessment methodology of CDCS Examination 2022