The Main Purpose of the INCOTERMS the Interpretation of International Trade Free Essay Example, 2500 words

The transaction between Sam and Don is covered by UCP 600 in so far as it relates to the presentation and acceptance of the documents under the documentary letter of credit. The Uniform Customs and Practices for Documentary Credits 2007 Revision ICC publication no 600 (UCP 600) which came in to effect from 1st July 2007 is applicable to any documentary credit when the text of the letter of credit expressly mentions that the credit is subject to these rules. However, since the transaction takes place before the UCP takes effect it is to be considered whether the UCP 600 becomes applicable to the transaction. Letters of credit opened prior to 1st July 2007 will continue to be governed by UCP 500 and it is unlikely that they will be amended to change to UCP 600 For the purpose of this presentation it is assumed that although the transaction takes place during June 2007 the UCP 600 becomes applicable as the text of the documentary credit mentions so. It is also assumed that the letter of credit expires well after 1st July 2007 the date on which the UCP 600 takes effect and hence the rules as prescribed by UCP 600 becomes applicable to the transaction. We will write a custom essay sample on The Main Purpose of the INCOTERMS: the Interpretation of International Trade or any topic specifically for you Only $17.96 $11.86/page Article 11 further states that an authenticated teletransmission of credit can be deemed to be an operative instrument. Under UCP 600 a documentary credit will be treated as irrevocable even when there is no indication to that effect in the text of the instrument. Under the earlier version UCP 500 it is mandatory that the operative credit instrument clearly mentions whether the letter of credit is a revocable or irrevocable one. Article 6 of the UCP 500, gives the right to the opener to open the documentary credit either as revocable or irrevocable.