Can we issue a revocable LC which is subject to UCP 600?
Article 3- "A credit is irrevocable even if there is no indication to that effect." implies that
if the credit is silent about revocablity then it is irrevocable.
If it is explicitly mentioned as Revocable in field 40A of MT700, then should it be considered as
revocable or irrevocable when it is subject to UCP 600?
another confusion is artciel 2: Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation.
rgds LC quest
Article 1 of UCP 600 allows the part or whole of the articles to be "expressly modified or excluded by the credit".
"Whilst UCP 600 does not cover the issuance of revocable letters of credit, there is no reason why one could not be issued subject to UCP 600. The issuing bank would need to insert, within the credit, all the terms and conditions of the revocability i.e., the wording that formed the basis of UCP 500 Article 8. By stating in field 47A that the credit was revocable and establishing the basis under which it can be revoked, this would modify the rule regarding "A credit is irrevocable, .... " in Article 3 and would not require any specific exclusion of the definition of "Credit"."
Therefore, you are perfectly entitled to issue a revocable credit under UCP 600, provided ....:-).
Have a great day!
Why on earth would anyone want to issue a revocable L/C, and more to the point, why would any beneficiary accept it?
In present, revocable L/C is used in case exporter want to his bank finance for goods. That bank requires to examine L/C. So, the exporter asks the importer open a revocable L/C. If exporter's bank finances, the exporter will require the importer amend revocable L/C to irrervocable L/C .If not, exporter will require importer revoke the L/C.