UCP600 Article 32: A Hidden Trap

UCP600 Article 32 (Instalment Drawings or Shipments) enables an irrevocable credit to cease to be available before its expressly stated expiry date for presentation. Like the presentation provision of UCP600 Article 14(c) addressed last month in DCW, this is another ‘hidden rule’ that goes against the fundamental principles of documentary credits and must go!

Think about it … when we started as practitioners in LCs years ago, we learned that the most impressive, intrinsically valued and unique principle of this financial instrument was its irrevocability from the date of issuance until the date of expiry.

This simple, straightforward and strong tenet forms the cornerstone of letter of credit operations: A CREDIT IS IRREVOCABLE UNTIL ITS EXPIRY DATE.