UCP 500 Articles 4 and 5
- Comment No. 6

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6 September 2003

To:   Members of the Consulting Group
UCP 500 Revision
ICC Banking Commission
Paris

Hello Members,

My comments here are mainly to respond to the comments made by K. S. Harshan.

ID4 (Article 4)

I think the word "relate" in Article 4 has broad implications and should cover all situations, including "directly or indirectly" and not limited to "indirectly" or "directly". So there is no need to add "directly or indirectly" after "relate" in UCP 500 Article 4 as suggested by K. S. Harshan.

ID5 (Article 5)

DCs from certain countries, for example Bangladesh and India (with due respect, and by no means exclusive), have on the average four pages. Some terms and conditions may be simply quotations from the UCP or of similar wording.

As analysed by Ravi Mehta in his article "An indictment of India's L/C training" appearing on page 21 of "Documentary Credits Insight" July-September 2003 issue, this may be due to lack of effective training. Internal training run by a bank's training department or a banking institute with in-house trainers is only good enough for basic and maybe intermediate training. More advanced training should be outsourced and should be run by experts, lawyers, scholars or consultants. Due to budget constraints, these are sometimes not affordable, at least to certain middle and senior DC practitioners.

I do understand that it is difficult to set a rule about the "reasonable length" of a DC, yet at least the revised Article 5 should discourage (other than restrict) quotation of UCP Articles, directly or with similar wording.

T. O. Lee

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