Latest ICC Briefing Paper on UCP600 Practice Addresses Amendments

In an attempt to clarify aspects of UCP600 Article 10, the ICC Banking Commission has issued its 10^th Technical Advisory Briefing.

TAB No. 10, “Acceptance or rejection of an amendment, by a beneficiary, under a documentary credit issued subject to UCP 600”, was released 5 August 2024.

Although TAB-10 posits that UCP600 Sub-Article 10(c) provides “clear details” of the rules regarding beneficiary notification of acceptance or rejection of an amendment, the rules are not always well understood and followed in practice. Hence, the ICC identified a need for guidance in the form of an educational briefing.

Based on UCP600 Sub-Article 10(a), a UCP600 credit can only be amended with the agreement of the issuing bank, the confirming bank, if any, and the beneficiary. TAB-10 goes on to discuss key features of UCP600 Article 10 impacting these parties and under various scenarios.

In its role, a confirming bank has no obligation to extend its confirmation to an amendment. If it is not prepared to extend its confirmation, but is willing to advise the amendment, the confirming bank is to indicate to the beneficiary that its confirmation does not apply as regards that amendment and must inform the issuing bank “without delay” (the subject of TAB-2 and previous reporting).  

A beneficiary should give notification of acceptance or rejection of an amendment, but if it does not, the amendment remains a pending offer and the beneficiary is not bound to comply with its content. As explained by TAB-10: “Some form of affirmatory action is required by the beneficiary to be bound by the (amendment’s) content.” 

Confusion can arise regarding what constitutes acceptance or rejection of an amendment.

The Briefing outlines an example whereby a presentation covering a partial shipment which complies with the credit but not an amendment’s content does not necessarily mean that the beneficiary has rejected the amendment since the amendment may pertain to future shipment(s).