The paper is based on Banking Commission Opinions that were rendered in answer to these queries.
Articles 13 and 14 of UCP 500 specifically prescribe the actions of an issuing or confirming bank in the examination of documents presented under a letter of credit. The process outlined in the UCP specifically dictates the process of examination of documents, the decision as to whether to take up or refuse the documents, the process of seeking waiver of discrepancies by the issuing bank, providing notice of discrepancies and the reasonable time for the performance of the steps prescribed by the UCP.
Since the implementation of the revision of the UCP in 1993, several variations on the performance of the prescribed procedures in the UCP have evolved, many of which are not in accordance with the UCP. The development of these practices outside the scope of the UCP may place the issuing bank at risk for not complying with the terms of the UCP.
Note: This document only addresses the obligations of the issuing bank because they are the only bank authorized to seek waiver from the applicant. Similar obligations may apply to the confirming bank with the exception of the seeking of waiver from the applicant.