Uniform Customs And Practices

Summary of Uniform Customs And Practices

Generally known as the UCP, a body of rules governing and guiding banking practices relative to letters of credit. The first version of the UCP was promulgated by a congress of the International Chamber of Commerce in Amsterdam in 1933 but was rejected by the banking communities of the United States and Great Britain. In 1951, the ICC issued a revised version of the UCP, which was adopted by American, but not British, banks. A further revision of the UCP in 1962, forbidding acceptance by banks of received-for- shipment or “on-deck”bills of lading unless specifically authorized in the credit, overcame British objections.

By the early 1970s, additional revision of the UCP was needed to overcome certain problems of bank discretion and to accommodate containerized shipping. This latest revision was adopted by the Executive Committee of the ICC in December 1974, to take effect with credits issued on or after October 1, 1975.

Although the UCP is not enacted as statute, it is recognized in the courts of virtually every nation and is incorporated by reference into every credit that stipulates the instrument is governed by the UCP.

(Main Author: William J. Miller)