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LETTERS OF CREDIT

UNDER UCP 600

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Methods of Payment

 Advance Remittance

Open Account

Documentary Collections

 D/P Bills

D/A Bills Letters of Credit

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(1)

Sale contract

Ships goods(5)

IND EXPORTS

LTD

Ernakulam

(Beneficiary)

US IMP INC

 New York

(Applicant)

L/C

Pay-

ment

Docu-

ments

(8) (2)(4) (6)

Docu-

ments

Pay-

ment

Appli-

cation

Payment

(7)

Documents

Letter of Credit

CSB

Ernakulam

(Advising Bank/

 Negotiating Bank) 

(3)

AMEX BANK

 NewYork

(Issuing Bank)

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What the LC specifies (contd)

Period of credit extended to importer

Where to obtain payment

(negotiation/restricted) Mode of transport/from where to

where

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UCP

Issued by International Chamber ofCommerce

To provide uniform interpretation of the

terms used in the credit amidst differencesin the usages and terminologies prevailingin the different countries

First introduced in 1933 Current edition UCP 600 effective July

2007

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Types of LC under UCP 600

Payment credit

Negotiation credit

 Acceptance credit

Deferred payment credit

Irrevocable Credit

Confirmed Credit

Transferable Credit

Standby Credit

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Bill of lading

Full Set Clean on Board Freight paidOcean bill of lading made to Order andblank endorsed.

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Bill of Lading  – Under LC  Acceptable

Full Set

Clean

Shipper’s load and

count Short Form

Third Party

Liner

House

Not Acceptable

Received for shipment

On Deck

 Vessel propelled by

sail Straight

Stale

Charter Party

Freight Paid/Payable

Through or Port-to-port

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