The Reality and Practical Application of a Compliance Standard for Examination of Documents

Jin Ik Chae, Kongju National University

Abstract

A documentary credit is a bank's undertaking to pay against presentation of documents which comply with the terms and conditions of a documentary letter of credit. The compliance standard of the documents has in fact been mitigated in recent years, both by the UCP and courts. Especially, the revised UCP 600 was formally adopted and has been in effect for over three years and seven months, there are still a number of issues in it has been operated. Thus, this study is to review the changes, the issues and the reality for the compliance standard for examination of the documents. It is hoped that the results will contribute to the revitalization of a letter of credit regime by reviewing the compliance standard and the practical application for examination of a presentation. This paper will be discussed the relative sub-articles and major issues for the compliance standard under UCP 600 and compared it with the old relative sub-articles of UCP 500. The second is to scrutinize the operation and reality of the compliance principle under the UCP 600. Finally, it also will be presented the problems and implications for practical application of the compliance standard. In relation to this, discussion will be based on documentary research and case law where the long established legal principles from relevant cases will be examined.