Letter of Credit Forum

E) Miscellaneous Provisions –(Article 39 to 47 UCP 500)

E) Miscellaneous Provisions –(Article 39 to 47 UCP 500)

MISCELLANEOUS PROVISIONS

 

ARTICLE 39

Allowances in Credit Amount,
Quantity and Unit Price

A. The words "about",
"approximately", "circa" or similar expressions used in
connection with the amount of the Credit or the quantity or the unit price
stated in the Credit are to be construed as allowing a difference not to exceed
10% more or 10% less than the amount or the quantity or the unit price to which
they refer.

B. Unless a Credit stipulates
that the quantity of the goods specified must not be exceeded or reduced, a
tolerance of 5% more or 5% less will be permissible, always provided that the
amount of the drawings does not exceed the amount of the Credit. This tolerance
does not apply when the Credit stipulates the quantity in terms of a stated
number of packing units or individual items.

C. Unless a Credit which
prohibits partial shipments stipulates otherwise, or unless sub Article (B)
above is applicable, a tolerance of 5% less in the amount of the drawing will
be permissible, provided that if the Credit stipulates the quantity of the
goods, such quantity of goods is shipped in full, and if the Credit stipulates
a unit price, such price is not reduced. This provision does not apply when
expressions referred to in sub Article (A) above are used in the Credit.

Article 39 a UCP 500 – interpretation of descriptions
like “circa”:

If a precise designation of the Credit amount, the quantity
or the unit price is not possible, since e.g. the amount of goods to be shipped
has not been determined, and consequently expressions like “about”,
“approximately”, “circa” or similar are being used, a difference of up to 10 %
is permissible. The difference has to be calculated by comparing the measure
as stipulated in the Credit (e.g. credit amount, quantity or unit price) with
the same measure as indicated in the documents.

Article 39 a UCP 500 does not refer to the gross weight,
i.e. the total weight of goods and packing, but to the net weight. [das gilt
jedenfalls dann, wenn sich die Abweichungen von mehr als 10 % zwischen dem im
Akkreditiv and dem in den Transportdokumenten angegebenen Verpackungsgewicht
innerhalb vernuenftiger Grenzen haelt].

The ICC Banking Commission has not decided cases regarding
this problem.

 

Article 39 b UCP 500 – Rule of tolerance for quantity of
goods absent “circa” provision:

Even if the credit does not contain a circa provision
regarding the quantity of goods, a tolerance of 5 % more or less is admissible;
nonetheless, the claim for payment under the credit cannot exceed the credit
amount. The rule of tolerance of Article 39 b UCP 500 does not apply if the
credit stipulates the quantity in terms of a stated number of packing units or
individual items.

The tolerance provision does even apply of partial shipments
are not allowed. The provision of Article 43 b UCP 400 which dealt with this
issue, is not part of the UCP 500 since it is considered self evident. The
tolerance provision however has to be complied with for each individual partial
shipment. Example:

 

Fact Pattern:

An irrevocable credit was issued covering “37,500 lbs of
1/5.5 mm mohair yarn @ HKD23.98/lb …Delivery instruction: 20,000 lbs to be
delivered latest 22 Aug 94; 17,000 lbs to be delivered latest 27 Aug 94” and
stipulating that “L/C amount & quantity 5 % or more or less acceptable”.

1. First partial delivery: 20,000 lbs on 19 AUG 1994 (first drawing: HKD 479,600.00)

2. Second partial delivery: 18,000 lbs on 24 AUG 1994 (second drawing: HKD 431,640.00).

The issuing Bank rejected the documents quoting as sole
discrepancy “over shipped”. The ICC Banking Commission confirmed this decision
as follows:

If one looks at the part deliveries as the essential
delivery (goods) description, the stipulation “+/-5%” refers to them. That
means that each delivery has to be in the range of +/-5%. The consequence will
be that the local amount also will be in the range of this qualification
(footnote1).

 

Exceeding/falling below the credit amount:

Article 39 b UCP 500, according to which the drawings under
the credit do not exceed the amount of the credit, is only of practical
relevance in cases for multiple shipments within the 5 % tolerance. It is
however admissible to fall below of the credit amount, if the quantity of goods
has been reduced within the 5 % tolerance (footnote2).

 

 

Article 40 UCP: Partial Shipments/Drawings

ARTICLE 40

Partial Shipments/Drawings

A. Partial drawings and/or
shipments are allowed, unless the Credit stipulates otherwise.

B. Transport documents which
appear on their face to indicate that shipment has been made on the same means
of conveyance and for the same journey, provided they indicate the same
destination, will not be regarded as covering partial shipments, even if the
transport documents indicate different dates of shipment and/or different ports
of loading, places of taking in charge, or dispatch.

C. Shipments made by post or by
courier will not be regarded as partial shipments if the post receipts or
certificates of posting or courier's receipts or dispatch notes appear to have
been stamped, signed or otherwise authenticated in the place from which the
Credit stipulates the goods are to be dispatched, and on the same date.

The problem of allowing partial
shipments consists in the following: up to the expiry date the beneficiary may
partially ship the goods and present drafts under the credit, even if it is
obvious that the beneficiary will not be able to satisfy completely his
delivery obligations (footnote3). Nevertheless, the UCP have always permitted last
minute partial shipments/drawings, unless the credit stipulates otherwise.

 

Article 40 b UCP 500 – Exceptions to the prohibition of
partial shipments/drawings:

It is not considered a partial shipment, if shipment is
effectuated as follows:

• Same means of conveyance
• For the same journey
• Same destination.

It is without consequence whether

• Dates of shipment, ports of loading, places of taking in
  charge or dispatch are different.

 

Under Article 40 UCP 500 it is not sufficient to use the
same means of transportation, but to use the identical vessel. The ICC
Banking Commission has explicitly confirmed this when interpreting the terms
“means of conveyance” and “mode of transportation” (footnote4).

Different from previous revisions these are the consequences
for transportation by rail, air or road: On the one hand, the exemption from
the prohibition of partial shipments does not depend on the shipping documents
being signed by the same carrier or his agent, and evidencing the same date of
issuance and place of taking in charge or receipt. On the other hand, shipping
has to be effectuated by the same vessel; i.e. shipping the goods on several
trucks or railway carriages is no longer permissible (footnote5). This
interpretation does apply at least if separate shipping documents have been
issued for each truck or railway carriage.

Whether this interpretation also applies if only one
shipping document was issued remains an open question.

 

Different ports of loading/destination:

Article 40 b UCP 500 provides that bills of lading covering
partial shipments, evidencing different dates and ports of loading, are only
acceptable, if issued for the same journey and the same vessel. The indication
of different places of destination is not admissible:

“This Article clearly states that whilst transport
documents, i.e. more than one bill of lading, are acceptable when they cover
shipment on the same vessel but from different ports of loading, they are not
acceptable if they show a different destination.”(footnote6)

 

Article 41 UCP 500 – Consequences of missing deadlines
for installment shipments:

ARTICLE 41 Installment
Shipments/Drawings

If drawings and/or shipments by
installments within given periods are stipulated in the Credit and any
installment is not drawn and/or shipped within the period allowed for that
installment, the Credit ceases to be available for that and any subsequent
installments, unless otherwise stipulated in the Credit.

Article 41 UCP 500 to a certain degree corrects Article 40
UCP 500. Article 40 UCP 500 allows the beneficiary to partially ship the goods
at any time before the expiry date of the credit, which leaves the buyer in the
dark, when and to which extent he can expect delivery of the promised goods. Article
41 UCP 500 applies only, if the credit stipulates specific dates for the
performance of partial shipments.

Example: “Four partial shipments each of which is not to
exceed the amount of … in March, April, May, June 2002”. If the beneficiary
misses only one deadline for a partial shipment, he forfeits the right to claim
payment under the credit for any subsequent deliveries. The Beneficiary cannot
choose to miss a partial shipment and later still claim payment for subsequent
partial shipments.

 

Article 41 UCP 500 does not apply, if the credit only
stipulates the number of partial shipments without linking them to specific
dates.

Example: “Five partial shipments between January and May
2002”.

 

Article 42 UCP 500 – Expiry date and place for
presentation of documents:

ARTICLE 42 Expiry Date and Place
for Presentation of Documents

A. All Credits must stipulate an
expiry date and a place for presentation of documents for payment, acceptance,
or with the exception of freely negotiable Credits, a place for presentation of
documents for negotiation. An expiry date stipulated for payment, acceptance or
negotiation will be construed to express an expiry date for presentation of
documents.

B. Except as provided in sub
Article 44(A), documents must be presented on or before such expiry date.

C. If an Issuing Bank states
that the Credit is to be available "for one month", "for six
months", or the like, but does not specify the date from which the time is
to run, the date of issuance of the Credit by the Issuing Bank will be deemed
to be the first day from which such time is to run. Banks should discourage
indication of the expiry date of the Credit in this manner.

Article 42 a UCP 500 – Credits without expiry date are
void: All Credits have to indicate an expiry date for presentation of
documents for payment, acceptance, or negotiation. In distinction to bank
guarantees, Credits are void if they do not have an expiry date (footnote7).

 

Indication of place for presentation: Since the 1993
revision, credits need in addition to an expiry date also indicate a place for
presentation. This requirement is consistent with standard practices for forms
(cf the heading “date and place of expiry”).

The author advocates however that a credit, which does
not indicate a place for presentation, is not void. This is the compelling
consequence of the fact, that according to Article 10 b (i) UCP 500, credits
have to indicate the bank, which is authorized to honor the documents (an
exception applies only to freely negotiable credits). Indicating the authorized
bank means indicating the place for presentation.

 

Presentation of documents to appropriate bank: In
order to meet the deadline, the beneficiary can always present the documents to
the nominated bank (cf Article 10 b UCP 500). [sofern das Akkreditiv einen
bestimmten Verfallsort NICHT ??? vorschreibts]

Furthermore, normally not mentioned in a credit, the
beneficiary may present the documents to the issuing or confirming bank, since
the presentation to the primary obligee is always deemed to be timely. The
presentation directly to the Issuing bank, circumventing the nominated bank,
comes into view only under exceptional circumstances (e.g. strike, civil
unrest, war, riot in the country of domicile of the nominated bank).

 

Presenting the documents to a so-called “presenting bank”, a
bank not authorized under the credit, does not meet the deadline. Furthermore,
the negotiation of the documents by a bank not authorized by the credit to
negotiate, does not meet the deadline either, since the credit is not freely
negotiable or only negotiable with a specifically named nominated bank.

 

Article 42 a sentence 2 UCP 500 – Timely
demand/satisfaction:

The provision, that an expiry date stipulated for payment,
acceptance or negotiation will be construed as the expiry date for presentation
of documents, is intended to clarify that a timely presentation is independent
of the subsequent performance of the bank under the credit. Article 42 a
sentence 2 UCP 500 intends to countervail the erroneous practice of some banks
which the ICC Banking Commission described as follows:

“The NC’s addressed the issue
raised before the ICC Banking Commission concerning the erroneous practice of
certain banks which issue Credits stipulating that
payment/acceptance/negotiation under a Credit had to take place or become
effective within the expiry date of such Credit.”(footnote9)

Such a practice is not permissible, since the beneficiary
does not control, when the nominated bank is going to pay him under the credit.

 

Article 42 b UCP 500 – Extension of the expiry date due
to (banking) holidays:

According to Article 44 a UCP 500, the expiry date extends
to the first following day when the bank is open, if the expiry date of the
Credit falls on a day on which the bank is closed for other reasons than those
referred to in Article 17 UCP 500 (force majeure), hence Article 42 b, 44a UCP
500 refer to e.g. legal holidays and off duty Saturdays. Since Article 44 a UCP
500 designates “the first following day on which such bank is open”, local
holidays need to be taken into consideration, as e.g. Corpus Christi which is
celebrated in Bavaria but not in the North of Germany. The recognition of
carnival Monday in North Rhine Westphalia is doubtful and should be refused.

 

Article 42 b UCP 500 takes into consideration opening hours
of the bank which is authorized to receive the documents from the beneficiary.
This provision hence does not follow the ISP 98, which distinguishes between
Business days and banking days as follows:

“’Business Day’ means a day on which the place
of business at which the relevant act is to be performed is regularly open; and
‘Banking Day’ means a day on which the relevant bank is regularly open at the
place at which the relevant act is to be performed.”

 

Article 42 c UCP 500 – Determination of an expiry date
through indication of time periods:

If, contrary to the recommendations of the ICC Banking
Commission, the term of a credit is designated not by a certain date, but by
indications as e.g. “one month”, “six months” without specifying the time from
which the time is to run, then, absent specifications in the Credit, the date
of issuance of the Credit by the Issuing Bank will be deemed to the first day
from which such time is to run. This provision is in real life of little
importance. However in case of dispute it might lead to ambiguities regarding
the commencement of the term, since the issuance of a Credit requires not only
the transmission to the beneficiary, where applicable via a advising bank, but
also the acceptance by the beneficiary which normally is not expressly
communicated.

 

Compliance with expiry date, force majeure and good
faith: The risk of timely compliance lies with the beneficiary. He can
neither plead accident, force majeure, strike including strike of postal
workers, nor any other circumstances listed in Article 17 UCP 500. A bank will
not honor Credits, which expire during any of the above-mentioned interruptions
of business. Article 17 UCP 500 correctly interpreted stipulates that it only
applies if the documents are presented after the expiry date (footnote10).
According to a decision by the BGH which is still relevant today, a bank is not
released of its obligation, “if the beneficiary presents the documents before
the bank’s business is interrupted, however the bank cannot honor the documents
before the expiry date due to Acts of God” (footnote11).

 

Canaris (footnote12) advocates that based on principles of
equity and good faith the bank might be obligated to grant the beneficiary a
grace period to present complying documents. This opinion, demanding “strict
criteria”, has to be rebutted, since “strict criteria” are too vague in real
life.

 

Loss of documents before presentation: The
beneficiary bears the risk that the documents are presented in time. If the
documents are lost in the mail and the beneficiary does not present
replacements in time, the Credit expires unused (footnote13).

In particular the Beneficiary bears the risk of accidental
loss if he utilizes his house bank as presenting bank, in order to transmit
the documents, even though his house bank is not authorized to perform any
services under the credit. The same applies if the beneficiary utilizes the
advising bank for transmission of documents, unless this procedure is
explicitly permitted in the Credit.

 

Loss of documents after presentation: If the
Beneficiary timely presented the documents to the Nominated/Issuing or
Confirming Bank, the risk of loss is being borne by the Applicant.

Zahn/Eberding/Ehrlich seemingly intend to limit this
allocation of risks in cases where the nominated bank (und Abwicklungsstelle)
has examined the documents and paid the beneficiary before the loss occurred
(footnote15). Such a limitation is not justified, since the beneficiary has
satisfied his obligation when he presented the documents. Payment under the
Credit is completely irrelevant in this context. The same holds true, if the
nominated bank (Abwicklungs…) contrary to its mandate, forwards the documents
without examining them. In these cases the issuing bank has to grant the beneficiary
additional time to provide replacement documents. The expenses for providing
replacement documents are to be borne by the Issuing Bank.

The presentation of documents to the Issuing or Confirming
Bank, which the author considers timely, in case the country of domicile of the
Nominated Bank (Abwicklung…) experiences war, occupation, riots.

Regarding the relation of the banks towards one another the
following applies: Even if the nominated Bank (Abwicklung…) loses the documents
after examination and payment, it does not lose its claim for reimbursement
against the Issuing bank, since the Issuing Bank can demand payment from the
Applicant. The bank only has to bear the additional expenses for providing
replacement documents and additional guarantees. In case the documents are
being lost without fault, the Applicant bear the risk of loss and has to bear
any additional costs (footnote16).

 

Article 43 UCP 500 Limitation on the Expiry Date:

ARTICLE 43 Limitation on the
Expiry Date

A. In addition to stipulating an
expiry date for presentation of documents, every Credit which calls for a
transport document(s) should also stipulate a specified period of time after
the date of shipment during which presentation must be made in compliance with
the terms and conditions of the Credit. If no such period of time is
stipulated, banks will not accept documents presented to them later than 21
days after the date of shipment. In any event, documents must be presented not
later than the expiry date of the Credit.

B. In cases in which sub Article
40(B) applies, the date of shipment will be considered to be the latest
shipment date on any of the transport documents presented.

Deadline for presentation of shipping documents:

Absent specific instructions, banks will accept shipping
documents, which in most cases are required in L/C transactions, only if these
documents are presented within 21 days after date of shipment. It is
appropriate to coordinate this time period with the duration of the transport:

 

Example: 1. For a shipment from Helsinki to Hamburg, where the Credit is payable, five days are sufficient.

2. For a shipment from Sydney to Copenhagen (Credit payable
in Copenhagen), it might be appropriate to extend the time period to thirty
days in view of the travel time of the ship and also the message delivery time.

 

The rationale of the time limit to present documents in
Article 47 UCP 500 is, to enable the Applicant, to pick up the goods before
having to incur costs for warehousing which he will be charged if he does not
pick up the goods in time; hence this provision also applies to documents which
do not represent the goods. Article 42 a UCP 500 replaces a provision abolished
in the 1964 revision, which gave the banks discretion regarding the refusal of
“stale documents”; this lead to a considerable scope of discretion, causing
uncertainties for all parties involved.

 

Article 44 UCP 500 – Extension of Expiry date

ARTICLE 44 Extension of Expiry
Date

A. If the expiry date of the
Credit and/or the last day of the period of time for presentation of documents
stipulated by the Credit or applicable by virtue of Article 43 falls on a day
on which the bank to which presentation has to be made is closed for reasons
other than those referred to in Article 17, the stipulated expiry date and/or
the last day of the period of time after the date of shipment for presentation
of documents, as the case may be, shall be extended to the first following day
on which such bank is open.

B. The latest date for shipment
shall not be extended by reason of the extension of the expiry date and/or the
period of time after the date of shipment for presentation of documents in
accordance with sub Article (A) above. If no such latest date for shipment is
stipulated in the Credit or amendments thereto, banks will not accept transport
documents indicating a date of shipment later than the expiry date stipulated
in the Credit or amendments thereto.

C. The bank to which
presentation is made on such first following business day must provide a statement
that the documents were presented within the time limits extended in accordance
with sub Article 44(A) of the Uniform Customs and Practice for Documentary
Credits, 1993 Revision, ICC Publication No. 500.

Article 44 UCP 500 – Extension of Expiry date and/or the
time to present shipping documents

If the expiry date of the Credit and/or the last day of the
time period to present shipping documents falls on a day on which banks are
closed for reasons other than force majeure as e.g. Sundays, holidays, off duty
Saturdays, then the deadline shall be extended to the first following day on
which such bank is open. An extension only becomes relevant if the business
interruption is of general character. Individual reasons for closing (company
picnic, construction, company meeting) are no reason for extension. Problematic
is the recognition of local holidays, which have the character of a public
festival as e.g. carnival. The author believes that these holidays should not
give rise to an extension. The different number of working days in different
countries however has to be taken into consideration.

 

Example: XY-bank Singapore, issues a credit to the benefit
of a Chinese exporter; a Chinese bank confirms the credit. If the expiry date
of the credit falls on a Saturday, the beneficiary can still present his
documents on the following Monday if the Credit is payable with the confirming
bank, since in China Saturdays are not work days. However, if the credit is
payable with XY bank in Singapore, then the expiry date will not be extended,
since Saturdays are work days in Singapore.

 

Independence of time to present (see Article 43 UCP 500)
and expiry date of the Credit in case of extension: An amendment to the
Credit extending the expiry date and consented to by the Beneficiary does not
automatically extend the time period for presentation of the documents and vice
versa.

 

Confirmation of timeliness of presentation by bank to
which documents were presented: As before, a bank which has received
documents on the basis of Article 44 a on the following day, has to confirm
that the presentation was timely. In the present revision the term
“certificate” has been replaced with the term “statement” to clarify, that a
signature is not needed, since [dokumentenversandschreiben] this kind of
statement is no longer signed by an authorized representative of the bank.

 

Article 44 b UCP 55 – Mandatory observation of latest shipping date/ no
extension due to holidays: As before, the
extension of the expiry date or of the time to present shipping documents on
the basis of Article 44 a UCP 500, does not influence the latest shipping date.
The latest shipping date as stipulated in the credit has to be observed
meticulously. If no shipping date was stipulated, sentence 2 of Article 44 b UCP
44 b UCP 500 clarifies, that, absent specific instructions, the latest shipping
date cannot be later than the expiry date of the Credit.

 

Article 45 UCP 500 hours of Presentation:

ARTICLE 45 Hours of
Presentation

Banks are under no obligation to
accept presentation of documents outside their banking hours.

 

The provision, according
to which banks are not obligated to accept banks outsider their banking hours
is not without problems, since third parties can no longer clearly see what
banks consider banking hours. However, the provision applies to presentation
via individual delivery, a e.g. via couriers. It seems however doubtful, that
courts would accept, that delivery on a Wednesday at 2 o’clock P.M. to a device intended to receive mail (e.g. mailboxes) would be considered too late,
if the bank was closed at that particular time.

Half banking days, problematic distinction of banking
hours according to department:

For purposes of
calculating the time period of 7 days for the refusal of documents according to
Article 13 b UCP 500, the ICC Banking Commission defines the term “Banking Day”
as follows:

“The banking
day is a day on which the issuing or nominated bank is regularly open to
conduct letter of credit business; this would include a full or half day.
Conclusion: If an issuing or nominated bank is open on a Saturday to conduct,
amongst others, letter of credit transactions, then that half day will be
classified as one fo the ‘seven banking days following the day of receipt of
the documents’, or act as the actual date of receipt for the determination of
this period. ” (footnote17)

Indication of times for presentation in the Credit: According to the ICC Banking Commission it is
possible that the bank designates an expiry time different from the general
office hours:”

For instance,
if a banker’s ‘banking hours’ or ‘office hours’ are from 9:00 hours until
17:00 hours the bank might indicate in its Credit that the hours for
presentation of documents under their Credits are limited to the hours from 10:00
hours until 15:00 hours or the bank might indicate that the Credit expires at a
certain date and place and at a certain hour which they consider to be the
close of their business day.” (footnote18)

It remains questionable
whether the bank can thus exclude the validity of regular delivery by mail.

Article 46 UCP 500: General Expressions as to Dates for
Shipment

ARTICLE 46 General Expressions
as to Dates for Shipment

A. Unless otherwise stipulated
in the Credit, the expression "shipment" used in stipulating an
earliest and/or a latest date for shipment will be understood to include
expressions such as, "loading on board", "dispatch",
"accepted for carriage", "date of post receipt", "date
of pick up", and the like, and the case of a Credit calling for a multimodal
transport document the expression "taking in charge".

B. Expressions such as
"prompt", "immediately", "as soon as possible",
and the like should not be used. If they are used banks will disregard them.

C. If the expression "on or
about" or similar expressions are used, banks will interpret them as a
stipulation that the shipment is to be made during the period from five days
before to five days after the specified date, both end days included.

 

Article 46 a UCP 500—Shipment as a general term: “Shipment” does not require a ship, rather it is the
collective term for transportation of all kinds, by air, rail, road or sea. One
has to distinguish the following basic categories of shipping documents:

·
Confirmation of taking in charge
(standard case of the UCP)

·
Confirmation of loading on
board; according to Article 23 UCP 500 only provided for in ocean bills of
lading, however it is possible to stipulate this for other means of
transportation as well.

·
Confirmation of dispatch.
According to Article 27 A (iii) UCP 500 provided for as an option in air
shipments; however it is possible to stipulate this for other means of
transportation as well, although not customary.

Not entirely consistent
with the foregoing systematic overview, Article 46 a UCP 500 defines the term
shipment to include “loading on board”, “dispatch”, ”accepted for carriage”,
“date of pos receipt”, “date of pick-up” etc., and only if a multimodal
transport document is required also to include “taking in charge”. This
provision is likely to create ambiguities. It is correct that an “on board”
note evidences the loading of the cargo on board, and that the term “dispatch”
indicates the beginning of the transportation. All other terms used in Article
46 a exemplify wordings for “taking in charge”. Between an “accepted for
carriage” and a “taking in charge” no difference exists.

Article 46 b UCP 500 – Irrelevance of general terms:

If contrary to the
recommendations of the UCP 500 general terms are used to designate the loading
on board, as e.g. “prompt”, “immediately”, “as soon as possible” or similar,
these terms are without any relevance for banks. The previous wording of this
provision, according to which loading on board had to be effectuated within 30
days after issuance of the credit if these terms were used, has been abolished.

Article 46 c UCP 500 – Interpretation of “on or about”:

If the expression “on or
about” is used, the UCP 500 stipulate that this is to be interpreted as meaning
that shipment is to be made within 5 days before or after the indicated
shipping date.

Article 47 UCP 500 – Date Terminology for Periods of
Shipment.

ARTICLE 47 Date Terminology for
Periods of Shipment

A. The words "to",
"until", "till", "from" and words of similar
import applying to any date or period in the Credit referring to shipment will
be understood to include the date mentioned.

B. The word "after"
will be understood to exclude the date mentioned.

C. The terms "first half',
"second half of a month shall be construed respectively as the 1st to the
15th, and the 16th to the last day of such month, all dates inclusive.

D. The terms
"beginning", "middle", or "end" of a month shall
be construed respectively as the 1st to the 10th, the 11th to the 20th, and the
21st to the last day of such month, all dates inclusive.

 

Contrary to previous
revisions, the rules of interpretation of Article 47 UCP 500 now only apply to
shipments. This limitation was intended to avoid conflicts with mandatory
provisions regarding bills of exchange and drafts in various countries
(footnote19). In this vein the ICC Banking Commission has recently confirmed
once again, that the provision cannot be applied to the calculation of the time
to run to maturity date for bills of exchange. (footnote20)

Article 47 a UCP 500 – Interpretation of stipulations as
to time:

“To”, “until”, “till”,
“from”, or similar expressions are to be interpreted to include the date
mentioned. The conforms with traditional interpretations:

“The
words ‘to’, ‘until’, ‘till’, ‘from’ and words of similar import applying to the
stipulated latest date for shipment of period will be understood to include the
date mentioned and, if used, the word ‘after’ will be understood to exclude the
date mentioned.” (footnote21)

The ICC Banking
Commission has recently confirmed this interpretation (footnote22).

Article 47 b UCP 500 – Differing Interpretation of “after”

Whereas according to
Article 47 a UCP 500 when using the preposition “from” to calculate the time
period for shipping the indicated date is included, when using the preposition
“after” the date is excluded from the calculation. The indicated date of
shipment does not count for the calculation of the shipping period.

The consequences are as
follows:

“Ten days from issuance
of credit” needs to include the first day, whereas “ten days after issuance of
the credit” needs to exclude the first day to correctly calculate the
permissible shipping dates.