UCP 600 Key Articles for CCFE
About fifteen of the 39 articles carry the numbers the paper asks for. Here is each one with its rule.
UCP 600 has 39 articles, but a working trade-finance desk lives in about fifteen of them. These are the articles that set deadlines, percentages and rules on what a bank must accept, and they are the ones CCFE turns into number-and-article questions.
This page lists those articles with the exact rule each one lays down. Learn the number and the rule together; the paper often gives you one and asks for the other.
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The Numbers That Matter
Time to examine documents
Article
14(b)
What it says
A maximum of five banking days following the day of presentation, for each of the nominated, confirming and issuing bank
Presentation after shipment
Article
14(c)
What it says
Not later than 21 calendar days after shipment where original transport documents are presented, and never after expiry
Refusal notice deadline
Article
16(d)
What it says
By telecommunication, no later than the close of the fifth banking day following the day of presentation
"About" or "approximately"
Article
30(a)
What it says
Tolerance of up to 10% more or less on the amount, quantity or unit price it qualifies
Quantity tolerance
Article
30(b)
What it says
Up to 5% more or less on quantity, unless quantity is stated in packing units or individual items, and drawings stay within the credit amount
Amount tolerance
Article
30(c)
What it says
Up to 5% less on the amount even when partial shipments are not allowed, if the full quantity is shipped and unit price is not reduced
Minimum insurance
Article
28(f)(ii)
What it says
At least 110% of the CIF or CIP value when the credit is silent on the amount of cover
"On or about" a date
Article
3
What it says
Five calendar days before until five calendar days after the date, both ends included
| Rule | Article | What it says |
|---|---|---|
| Time to examine documents | 14(b) | A maximum of five banking days following the day of presentation, for each of the nominated, confirming and issuing bank |
| Presentation after shipment | 14(c) | Not later than 21 calendar days after shipment where original transport documents are presented, and never after expiry |
| Refusal notice deadline | 16(d) | By telecommunication, no later than the close of the fifth banking day following the day of presentation |
| "About" or "approximately" | 30(a) | Tolerance of up to 10% more or less on the amount, quantity or unit price it qualifies |
| Quantity tolerance | 30(b) | Up to 5% more or less on quantity, unless quantity is stated in packing units or individual items, and drawings stay within the credit amount |
| Amount tolerance | 30(c) | Up to 5% less on the amount even when partial shipments are not allowed, if the full quantity is shipped and unit price is not reduced |
| Minimum insurance | 28(f)(ii) | At least 110% of the CIF or CIP value when the credit is silent on the amount of cover |
| "On or about" a date | 3 | Five calendar days before until five calendar days after the date, both ends included |
Article 3: How Date Words Are Read
Article 3 settles wording that used to cause disputes. Each line is a likely MCQ.
- "to", "until", "till", "from", "between" (shipment period)
- Include the date or dates mentioned.
- "before", "after" (shipment period)
- Exclude the date mentioned.
- "from", "after" (maturity date)
- Exclude the date mentioned. Note the difference: "from" includes the date for shipment periods but excludes it for maturity.
- "first half", "second half" of a month
- The 1st to the 15th, and the 16th to the last day, all dates inclusive.
- "beginning", "middle", "end" of a month
- The 1st to the 10th, the 11th to the 20th, and the 21st to the last day, all dates inclusive.
- "prompt", "immediately", "as soon as possible"
- Disregarded unless the word is required to appear in a document.
Articles on Expiry, Amendment and Refusal
- check_circleArticle 6: a credit must state an expiry date for presentation and must not be available by a draft drawn on the applicant.
- check_circleArticle 10: a credit cannot be amended or cancelled without the agreement of the issuing bank, the confirming bank (if any) and the beneficiary. Partial acceptance of an amendment counts as rejection, and a clause saying an amendment takes effect unless rejected within a set time is disregarded.
- check_circleArticle 16: refusal needs a single notice stating that the bank refuses, listing each discrepancy, and saying what is happening to the documents. A bank that misses this loses the right to claim the documents are discrepant. Approaching the applicant for a waiver does not extend the five banking days.
- check_circleArticle 29: if the expiry date or last day for presentation falls on a day the bank is closed (for reasons other than force majeure), it moves to the next banking day. The latest shipment date does not move.
- check_circleArticle 36: if a bank's business is interrupted by force majeure, it will not honour a credit that expired during the interruption.
Day counts, tolerances and refusals. No signup.
Articles on Documents
- check_circleArticle 14(d): data in a document need not be identical to the credit or other documents, but must not conflict with them.
- check_circleArticle 14(h): a condition in the credit with no document to show compliance (a non-documentary condition) is disregarded.
- check_circleArticle 17: at least one original of each stipulated document must be presented. "In duplicate" is satisfied by one original plus a copy.
- check_circleArticle 18: the commercial invoice must appear to be issued by the beneficiary, be made out in the applicant's name and in the credit's currency, and need not be signed. Its goods description must correspond with the credit.
- check_circleArticle 27: banks accept only clean transport documents; the word "clean" need not appear.
- check_circleArticle 28: cover notes are not accepted, and the insurance document must not be dated after shipment unless it shows cover from a date not later than shipment.
Articles on Shipment, Transfer and Assignment
- check_circleArticle 31: partial drawings or shipments are allowed unless the credit says otherwise.
- check_circleArticle 32: if one instalment is missed, the credit ceases to be available for that and every later instalment.
- check_circleArticle 38: a credit is transferable only if it says "transferable". It can be transferred once; a second beneficiary cannot transfer it on. The amount, unit price, expiry date, presentation period and latest shipment date may be reduced or curtailed, and the insurance percentage increased.
- check_circleArticle 39: a credit that is not transferable still lets the beneficiary assign the proceeds, under applicable law.
How CCFE Tests This, and the Usual Traps
Most questions give a number and ask for the article, or give a scenario and ask for the day count. The traps: confusing 5 banking days (examination) with 21 calendar days (presentation after shipment); applying the 5% quantity tolerance to goods counted in units; assuming Article 29 also extends the latest shipment date; and treating "from" the same way for a shipment period and a maturity date.
FAQs
How many days does a bank get to examine documents under UCP 600?expand_more
A maximum of five banking days following the day of presentation, under Article 14(b). Each bank involved (nominated, confirming and issuing) gets its own five days.
What is the 21-day rule in UCP 600?expand_more
Article 14(c): where original transport documents are presented, presentation must be made within 21 calendar days after the date of shipment, and in any case not later than the expiry date of the credit.
Which UCP 600 article covers tolerance in amount and quantity?expand_more
Article 30. "About" or "approximately" allows 10% either way; quantity may vary 5% either way unless stated in units or packing units; and the amount may fall 5% short in specified conditions.
What is the minimum insurance cover under UCP 600?expand_more
If the credit does not say, Article 28(f)(ii) requires cover of at least 110% of the CIF or CIP value of the goods.
Can a transferable LC be transferred twice?expand_more
No. Under Article 38(d) a transferred credit cannot be transferred again at the request of the second beneficiary. It can, however, be transferred in parts to several second beneficiaries if partial shipments are allowed.
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