UCP 600 Case Studies with Answers
Four LC problems a trade finance desk sees every month, each solved with the article that decides it.
Most LC disputes on a trade finance desk come down to a handful of UCP 600 articles: how long the beneficiary has to present, how long the bank has to decide, how much tolerance the figures allow, and what the insurance document must show.
Each case below gives the facts, works through them in order, and ends with the answer and the article that decides it. The rule is always the same starting point: banks deal with documents, not goods (Article 5), and the credit is separate from the sale contract (Article 4).
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Case 1: Shipped on Time, Presented Too Late
A knitwear exporter in Tiruppur holds an LC from a Dutch buyer's bank, available by negotiation in India. Latest shipment date 15 March 2026, expiry 30 April 2026. The credit states no presentation period. The bill of lading shows goods shipped on board on 12 March 2026. The exporter presents documents to its bank on 6 April 2026.
- 1
Check the shipment date
12 March is before the latest shipment date of 15 March, so shipment is in time. Under Article 20(a)(ii), the on board date on the bill of lading is the date of shipment.
- 2
Find the presentation deadline
When the credit is silent, Article 14(c) requires presentation of original transport documents within 21 calendar days after the date of shipment, and never later than expiry. 21 days after 12 March is 2 April 2026.
- 3
Compare
Presentation on 6 April is four days late, even though the credit itself is still valid until 30 April.
- 4
Answer
The presentation is discrepant (late presentation, Article 14(c)). The negotiating bank can send the documents on an approval basis; the issuing bank may ask the applicant to waive the discrepancy (Article 16(b)), but the buyer is not obliged to.
Case 2: The Refusal Notice That Came Too Late
An Indian bank has issued an LC for a Pune machine-tool importer. Documents arrive from the German seller's bank on a Monday. The examiner spots that the bill of lading shows shipment two days after the latest shipment date. The importer wants to negotiate a price cut first, and the refusal message goes out on the eighth banking day after presentation and lists one discrepancy. Two days later, the bank sends a second message adding a missing packing list.
Article 14(b) gives the issuing bank a maximum of five banking days following the day of presentation to decide whether the presentation complies. A banking day is a day the bank is regularly open at the place where the act is done (Article 2), so Sundays and local bank holidays do not count. Article 16(d) says the refusal notice must go out by the close of the fifth banking day. Article 16(c) also requires a single notice listing every discrepancy and saying what the bank is doing with the documents. Approaching the applicant for a waiver does not stretch the five days (Article 16(b)).
Answer: the bank is precluded from claiming the presentation does not comply (Article 16(f)). It must honour, even though the late shipment was a genuine discrepancy. The second notice fails twice: it is late, and only one notice is allowed.
Case 3: Tolerance on Quantity and Amount
A spice exporter in Kochi has an LC for "about 10,000 kg turmeric at USD 2.00 per kg, total about USD 20,000". It ships 10,700 kg and invoices USD 21,400. Under Article 30(a), "about" or "approximately" allows 10% more or less on the figure it qualifies. Here it qualifies both quantity and amount, so up to 11,000 kg and USD 22,000 are acceptable. The presentation complies.
Change one fact: the credit says "10,000 kg" and "USD 20,000" with no "about". Article 30(b) still allows 5% more or less on quantity, because the goods are not counted in packing units or individual items, but the drawing cannot exceed the credit amount. Shipping 9,600 kg and invoicing USD 19,200 complies. Shipping 10,400 kg fits the quantity tolerance, but USD 20,800 exceeds the credit, so no more than USD 20,000 can be paid. If the credit counted "500 pumps", there would be no 5% quantity tolerance at all.
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Case 4: Insurance Dated After Shipment
A CIF credit calls for an insurance certificate and says nothing about the insured amount. The invoice is for USD 50,000 CIF. The bill of lading shows shipment on 12 March; the certificate is dated 14 March, insures USD 50,000 and has no wording on when cover starts.
Two discrepancies. First, Article 28(e) says the insurance document must not be dated later than shipment unless it shows cover effective from a date no later than shipment; ISBP section K applies the same test. Second, when the credit is silent, Article 28(f)(ii) requires cover of at least 110% of the CIF or CIP value, so USD 55,000 at minimum.
The Articles These Cases Turn On
14(b)
What it decides
Time for a bank to examine documents
The figure to remember
Maximum 5 banking days following the day of presentation
14(c)
What it decides
Latest presentation of original transport documents
The figure to remember
21 calendar days after shipment, and not after expiry
16(c), 16(d), 16(f)
What it decides
Refusal notice: one notice, every discrepancy, on time, or the bank is precluded
The figure to remember
By close of the 5th banking day
30(a), 30(b)
What it decides
Tolerance
The figure to remember
"About": 10% either way. Quantity: 5% either way, unless counted in units
28(e), 28(f)
What it decides
Insurance date and amount
The figure to remember
Not after shipment; at least 110% of CIF or CIP value if the credit is silent
| Article | What it decides | The figure to remember |
|---|---|---|
| 14(b) | Time for a bank to examine documents | Maximum 5 banking days following the day of presentation |
| 14(c) | Latest presentation of original transport documents | 21 calendar days after shipment, and not after expiry |
| 16(c), 16(d), 16(f) | Refusal notice: one notice, every discrepancy, on time, or the bank is precluded | By close of the 5th banking day |
| 30(a), 30(b) | Tolerance | "About": 10% either way. Quantity: 5% either way, unless counted in units |
| 28(e), 28(f) | Insurance date and amount | Not after shipment; at least 110% of CIF or CIP value if the credit is silent |
How the IIBF Exam Tests This
IIBF's syllabus attaches case studies to the LC topics, so expect a short scenario with dates and figures and four answers that differ by one rule. The usual trap is to check only one deadline: the expiry date but not the 21-day period, or the five days but not the single-notice rule. Build the habit from Case 1: shipment date, presentation deadline, expiry, examination period, in that order. ICC replaced ISBP 745 with ISBP 821 in July 2023; the courseware may still cite 745.
FAQs
What happens if documents are presented after 21 days but before LC expiry?expand_more
Unless the credit sets its own presentation period, the presentation is discrepant under UCP 600 Article 14(c). The issuing bank can still pay if the applicant waives the discrepancy, but it no longer has to.
Does asking the applicant for a waiver give the issuing bank more time?expand_more
No. The issuing bank may approach the applicant for a waiver, but that does not extend the five banking days it has to examine the documents and send any refusal (UCP 600 Article 16(b)).
Can an issuing bank send a second refusal notice with new discrepancies?expand_more
No. Article 16(c) requires a single notice stating each discrepancy. A discrepancy not raised in that notice cannot be raised later, and a bank that misses the procedure is precluded from refusing (Article 16(f)).
Next steps
- UCP 600 Key Articlesarrow_forward
- LC Discrepanciesarrow_forward
- Trade Documentsarrow_forward
- URR 525 vs 725arrow_forward
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