Article-15, UCP-600-Complying Presentation

Article 2 defines ‘complying presentation’ as a presentation that is in accordance with the terms and conditions of the credit, the applicable provisions of these rules and international standard banking practice. 

Article-15, UCP-600-Complying Presentation

a. When an issuing bank determines that a presentation is complying, it must honour.

An undertaking is issued by an issuing bank in order to honour the complying presentation, presented by beneficiary or on behalf of beneficiary, once the documents are presented at issuing bank counter, they would have maximum of 5 banking days following the day of the presentation to determines whether the presentation is clean or discrepant, in case of clean document they must have to honour as per credit terms whether on sight or at maturity in case of USANCE.

b. When a confirming bank determines that a presentation is complying, it must honour or negotiate and forward the documents to the issuing bank.

Same goes to the confirming bank as well, as the confirming bank adds its confirmation to provide an additional security to the beneficiary eliminating the country and credit risk of issuing bank, the main difference between confirming and issuing bank undertaking is that a confirming bank may negotiate if draft is drawn other than it or on basis of complied documents; and issuing bank must have to honour upon complying presentation.

If documents are presented at confirming bank counter, one must need to honour or negotiate as per availability in field 41a of the credit, once they honour or negotiate, must need to forward the documents to the issuing bank so issuing bank will handle it further to release the document to applicant. 

c. When a nominated bank determines that a presentation is complying and honours or negotiates, it must forward the documents to the confirming bank or issuing bank.

In this sub-article if a nominated bank is acting on its nomination and determines that the presentation is complying, and decides to honour or negotiate, or even if not acting on its nomination, it must need to forward the documents to the confirming bank or issuing bank for further handling.

When a complying presentation has been made, a beneficiary can receive settlement from:

• A nominated bank who is acting on its nomination to honour or negotiate, and this bank will be reimbursed in accordance with the terms and conditions given in the credit

• A confirming bank, if any, which will honour or negotiate in accordance with the undertaking given in its advice of confirmation, and this bank will be reimbursed in accordance with the terms and conditions given in the documentary credit.

• The issuing bank, which will honour a presentation made directly to it.

A nominated bank and a confirming bank may be one and the same bank. The issuing bank will seek reimbursement from the applicant for any settlement made to a confirming bank, nominated bank or beneficiary in accordance with the arrangements agreed at the time the documentary credit is issued.

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Chandan Kumar Yadav
My name is Chandan Kumar Yadav CDCS, CSDG, CITF, PGDIBO,AML-KYC, CCFE, MLIBF, CSF, 6SIGMA a trade finance professional with an experience of 11 years whereas worked with several stages of letter of credit, bank guarantee and on other payments methods of trade transactions such as documentary collection, open accounts, SBLC etc., I have a fair understanding of Trade Based Money Laundering as well, Blogging related to Trade Finance is my passion and I want to share which I know and learn from others, I have worked with Wells Fargo, Yes Bank Limited and Bank of America, India which helped me to gain knowledge, view of Trade Finance and importance of International Trade in world's economy. Trade Finance is thumping product, everyday we are learning something new so in order to keep learning I started this as one of the platform. . Let's Learn Together

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