Dokumentární akreditiv v praxi (7. zcela přepracované a rozšířené vydání)

Autor: Pavel Andrle

Na našem trhu ojedinělá publikace, která komplexně a prakticky zpracovává tento velmi významný způsob financování zahraničního, ale i tuzemského obchodu. Usnadní všem podnikatelům, dovozcům a vývozcům, každodenní obchodní styk s obchodními partnery a bankami v souvislosti s dokumentárními akreditivy.

Problematika je zpracována jak z pohledu standardních pravidel, podle kterých se provádí na celém světě – Jednotných zvyklostí a pravidel pro dokumentární akreditivy, – tak i z pohledu české bankovní praxe.

Autor vytvořil referenční publikaci, která se stala v této oblasti standardem. Z toho důvodu proběhly konzultace s mnoha předními odborníky – výsledkem je maximální objektivita jasně formulované informace. Nové aktualizované vydání reaguje na změny v praxi v oblasti přezkoumání dokumentů předkládaných v rámci dokumentárních akreditivů.

Publikace je též obohacena o novou kapitolu zaměřenou na financování akreditivů, a to jak z pohledu exportéra, tak i importéra.

Documentary Credits in Practice

New publication – just being released!

The publication is based on very successful book which has become a reference book in the Czech Republic and has been published in 7 editions (2001, 2002, 2003, 2008, 2011, 2013, 2020)!

Purpose and aim of this book – practical guide for exporters, importers, traders and bankers

The objective of this book is to provide readers with a comprehensive and, above all, practical overview of the documentary credit – the safe, sophisticated and well established payment instrument. The publication addresses from all angles one of the oldest payment instruments in foreign trade in the light of the current international standard banking practice, based on the rules which govern documentary credit operations all over the world – the Uniform Customs and Practice for Documentary Credits (UCP). The publication endeavors to equip the user of the documentary credit  with the practical guide which will support you for most of your daily work dealing with documentary credits.

Main advantages of this book:
– Holistic approach to the complex payment and security instrument – the traditional documentary credit
– Practicality (inclusion of many ilustrative annexes, dealing with daily issues, proposals how to solve and prevent problems)
– Learning about legal aspects of the documentary credit transactions
– The book has been written based on the author´s long working experience and study of decisive materials, above all publications and opinions of ICC (International Chamber of Commerce – the authority setting the rules in this field), court cases and also many consultations with leading czech and foreign exxperts

The target users of the book:
All whose professional activity is linked to the documentary credit, above all:
– Exporters and domestic suppliers
– Importers and domestic buyers
– Bankers providing documentary credit services and other related forms of trade finance
– Lawyers and legal councels of trading companies and banks
– Court judges and arbitrators in international trade and finance
– Consultants and trainers in the area of international trade and finance
– Academics who engage in studying international trade and finance (professors, lectures, students)

The documentary credit is one of the oldest, most sophisticated and safest payment instruments used in international trade. Despite the fact that its demise has been predicted for some time due to increasing globalization and developments in the area of digitalization of all aspects of commerce, the documentary credit is still alive and well.

It remains very important to carefully evaluate the underlying risks in foreign trade transactions and take appropriate measures. The 2008 – 2009 global financial crisis fully revealed the importance of trade finance in the world economy and the need to appreciate and properly use traditional, well-established payment and security instruments. As of today, in late 2020, another global crisis has already started to make itself felt, this time caused by the COVID-19 pandemic.

The documentary credit provides a very effective tool for mitigating the risk of non-payment by the buyer, which is thus replaced by the payment undertaking of a bank to provide payment against documents which comply with the terms and conditions of this instrument – documentary credit. The seller therefore accepts the payment risk of the issuing bank whose payment obligation is legally independent from the sales contract or any other contractual relationship to which the documentary credit relates. If the payment risk and country risk of the issuing bank is still excessive for the seller, it is possible to arrange for an additional payment undertaking from another bank by obtaining confirmation from it.

It is crucial that all parties to the documentary credit transaction are familiar with the main aspects of documents used in foreign trade, and that the seller and the buyer pay attention to the specification of the payment conditions in their contract of sale (correctly and sufficiently describing the terms and conditions of the documentary credit to be established by the buyer, above all the content of the required documents). The seller, the beneficiary of the credit, needs to be aware of international standard banking practices, especially in relation to the examination of documents under documentary credits. After all, if the documents presented to the bank do not comply, the seller might not be paid at all!

Indeed, many parts of documentary credit transactions have already been automated and to some extent digitalized. These developments will continue to reshape the documentary credit instrument. The replacement of paper documents by electronic equivalents, or even by fully digitalized information (data) has long been anticipated. Due to the recent developments in the global economy, accelerated by the COVID-19 pandemic which fully exposed the deficiencies of paper-based trade, these changes will most likely be brought forward. In any event, with its unique features – above all an independent paymaster – the documentary credit is bound to, in one form or another, remain a building block of the international payment system.

I wish to congratulate the author of the book, who also serves as the secretary of our active banking commission, for writing this practical guide. This book is an essential tool for any documentary credit user, be they exporter, importer or trade finance banker. The author’s deep insights into the subject would also be appreciated by other parties who are indirectly involved in documentary credit transactions, i.e. providersof services (and above all documents) to exporters such as carriers, freight forwarders, insurance companies, brokers or underwriters, inspection companies or chambers of commerce. Most certainly, the book also needs to be on the shelf of discerning consultants, arbitrators, advocates, trainers and lecturers in the field of international trade and finance.

I sincerely believe that this very comprehensive, informative and practical guide will significantly assist in the proper understanding of the relevant international standard banking practices and will facilitate the successful utilization of documentary credits in practice.

In Prague on 2 December 2020

Miloš Olík
Partner ROWAN LEGAL
Chairman of ICC Czech Republic

I. General Part elaborately introduces the documentary credit, its character and role in payment and financing of the international trade. The documentary credit is compared with other payment methods from the standpoint of its advantages and disadvantages, both from the seller´s and the buyer´s point of view. The reader will learn about the relationship between transport documents routinely used in international documentary payments and the goods to which they relate. The main characteristics of the documentary credit will be explained: the nature of banks‘ obligations stemming from the credit; the principle of independence from underlying contracts and other relationships among the parties taking part in the documentary credit transaction and more.

The documentary credit is explained in the most practical way, which differentiates this publication from other ones in the field. The documentary credit instrument (mostly issued by the interbank telecommunication system SWIFT) is explained “step by step“, i.e. each section of  the credit separately, from top to bottom of the credit instrument. The governing rules – UCP 600 – are herewith clarified (with comprehensive elaboration on various options and situations) in direct linkage to the respective documentary credit terms and conditions.

II. Practical Part describes the documentary credit cycle in detail: from the preliminary stages of contracting through negotiation of the contract terms and conditions; final contract conclusion (with focus on the contract conditions related to the payment conditions, i.e. payment through the documentary credit); issuance of the respective documentary credit; the compilation of the documents required by the credit; to the presentation and drawing under the credit. Liabilities and responsibilities of the involved banks are explained as well as the usual operational procedures, the common problems and issues, and the methods of dealing with them in daily practice.

Considerable attention is devoted to the practices related to issuance of the documentary credit, i.e. the application to issue a credit is profoundly explicated with many illustrations. It is indeed of utmost importance for the importer to ensure that the requested documents evidence – as much as possible and practical – that the delivery, the payment and other conditions of the contract of sale (such as that the goods were delivered in time, in the appropriate quantity and quality) have been met by the exporter. It is therefore a must for the importer to correctly choose the right documents and to describe their requirements as best as possible (in accordance with the contract of sale) in its instructions in the application to issue the documentary credit. The instructions ought to be correct and in adequate detail for the purpose.

This part also deals with the advising and confirming of credits as well as with issues related to the presentation of documents in general.

III. Financing of Documentary Credits: the documentary credit is not only a payment instrument, it can also serve as a financing tool. An importer often needs deferral of the payment or a (bank) loan to finance its imports. An exporter often seeks options of financing its pre-shipment needs, i.e. financing of the manufacturing of the goods and/or the shipment of the goods. If the exporter has extended trade credit to the importer (provided him with the favourable deferred payment conditions), he might be himself in a need to obtain finance, i.e. to secure export financing (in the form of discounting or so). Hence, this part of the publication elaborates on various forms of financing based on documentary credits.

IV. Examination of Documents: the documentary credit fulfils its purpose from the exporter´s point of view, i.e. provides him with the payment for the shipped goods, but only if the exporter meets all the terms and conditions of the credit. In other words, the exporter is certain to be paid under the credit only if he manages to submit the requested documents which comply with all relevant credit terms and conditions.

Practice shows that this requirement is hard to meet. It comprises of many complex problems and uncertainties, therefore it often happens that the presented documents are found by banks to bear discrepancies. This part of the publication familiarises the reader with the requirements of “the Uniform Customs and Practice for Documentary Credits, ICC Publication No. 600, revision 2007“ as applicable to the examination of the documents presented under documentary  credits. The acquaintance with the rules is a key to success, above all for the exporter who uses credits as the means of payment. Without a good command of the rules and their application there is no way of fulfiling the terms and conditions of the credit and no assurance of being paid in timely manner!

The rules themselves, i.e. UCP 600 and its supplement ISBP, ICC publication no. 745, are also part of the book as annexes. This further enhances the practical value of this publication for its every day use.

Mr. Pavel Andrle, BSc., LL.M, international trade finance trainer and consultant, is the founder & owner & managing director of consultancy company Trade Finance Consulting, s.r.o. He also serves as Secretary to the Banking Commission of ICC Czech Republic which he regularly represents at ICC Banking Commission meetings abroad. He has been deeply involved in the revision of UCP as a member of UCP 600 Consulting group which was formed by over forty experts from all over the world. In years 2010-2011 he also served as a member of the ICC Banking Commission Group of Experts who drafted the official ICC Banking Commission Opinions on ICC Rules. He has worked for a number of leading local and international banks in various positions (for instance as trade finance specialist, head of trade finance, trade finance risk manager, in-house trainer). He is a frequent lecturer in Documentary Credits, Bank Guarantees & Trade Finance for the Banking Institute, Institute of Foreign Trade Transport & Forwarding, ICC CR and Chamber of Commerce of Czech Republic. He is a regular facilitator in seminars abroad in English for ICC National Committees, bank associations and chambers of commerce world-wide.

He is appointed ICC CR expert to reply to enquiries related to Documentary Credits and Trade and Structured Finance – development of technical assistance consultancy services of ICC CR to banks, carriers, insurance companies and traders. It includes advisory services and in-house technical assistance in banks and companies.

He is a frequent DOCDEX Expert of ICC Centre for Expertise with ICC International Arbitration Court, ICC Paris. He has been active trainer under Global Trade Finance program of IFC (International Finance Corporation – a member of World Bank Group). He has also delivered trainings and/or consultancy services to many other DFIs. In November 2018 he joined DCW (Documentary Credit World, the world leading magazine on documentary credits, standbys and guarantees) Editorial Advisory Board.  Mr. Andrle also serves at the lead tutor in the Finance of International Trade with the electronic Business School International.

1 copy: EUR 80 per copy
2 – 5 copies: EUR 70 per copy
6 – 10 copies: EUR 65 per copy
11 – 19 copies: EUR 60 per copy
20 – 49 copies: EUR 55 per copy
50 and more copies: EUR 50 per copy

The orders for 20 and more publications will be handled with preference.

Trade Finance Consulting, s.r.o. reserves the right to amend the price and/or the terms and conditions of the sale at any time without any prior notice.

Packaging, postage and payment:

The cost of the packaging and postage will be added to the price of the ordered publications.

The cost of packaging will vary depending on the weight of the ordered publications and country of the destination (possibly 15 – 40 EUR for a small package: 5 books, 50 – 200 EUR for a bigger package: 30 books).

The price for the book including the cost of the packaging, postage and bank charges will be requested to be paid against the invoice. The invoice will be sent by e-mail by us to your e-mail address which please indicate in your purchase order.

Electronic ordering of publications

By sending, filling in or otherwise providing personal data (especially name, surname, address, telephone number, date of birth and photos) to the Trade Finance Consulting, s.r.o. (TFC), the person agrees to include these personal data into the TFC database and their possible subsequent processing (including through the processor) for the purpose of providing TFC services and products, operation of the TFC internal agenda and sending business messages. The above personal data are thus provided for an indefinite period, i.e. until the withdrawal of consent. Any person hereby acknowledges that he has the following rights in particular: he may revoke his consent free of charge at any time at the TFC address; he has the right to access personal data and the right to correct such personal data; and their disposal.

Examination of documents under Documentary Credits

Third revised edition – to be released soon! Not Available yet!

The third edition, the update and extension of the very succesful publication!

The intention of this work is to provide exporters (beneficiaries) of documentary credits as well as bankers with a practical guide which would help them to develop a degree of competence in their daily documentary credit operations needed for a success. The task of getting the documents right, so they meet all terms and conditions of the documentary credit, is indeed very demanding. To achieve this strenuous goal one must be well aware of the rules and international standard banking practices in the field.

This work is the third updated and expanded edition of the book. The first edition, published in 2012, has been received with great interest of readers from all parts of the world. It clearly confirmed the need for a practical, comprehensive guide for the demanding task of examination of documents under documentary credits as well as for the preparation of the documents to meet the stringent requirements. The second edition, published in 2015, provided needed updates as the revised ISBP 745 was published in 2013. The most recent third edition is supplemented by referencing all applicable ICC Opinions provided under UCP 600 and most valuable DOCDEX cases related to UCP 600 commercial credits.

The publication explains the very complex rules and practices related to examination of documents presented under documentary credits, i.e. ICC Rules of Uniform Customs and Practice for Documentary Credits (UCP 600) and the international standard banking practices for examination of documents under documentary credits as reflected in the another ICC publication No. 745 (ISBP 745), in practical fashion. The most significant ICC Banking Commission UCP 600 Opinions and DOCDEX Cases related to the examination of documents are scrutinized and their interpretation explained. The examination of documents and making the decision whether they comply with the credit terms and conditions or not is certainly the most crucial, difficult and demanding task in the documentary credit practice.

The first part of the book focuses on the general rules related to presentations, i.e. where and when documents must be presented, which documents banks consider as originals and copies, which documents must be always signed and dated etc. It also provides explanations of the most common expressions used in documentary credits and practical advice how to avoid problems, disputes and misunderstandings.

The second part of the book provides very detailed explanations of the practice of examination of the most common documents applied by banks, i.e. invoices, various certificates and lists, transport documents, documents issued by freight forwarders and insurance documents. It does so by providing so called “Checklists”, i.e. examples of the documents with detailed explanations which aspects are examined by banks for their compliance with the credit terms and conditions and the ICC rules for documentary credits.

The publication is indeed unique in both its scope and practicality. It has the ambition to became a reference book in this very important field of the international trade finance. It is specifically designed for the exporters and banks, however the importers, carriers, freight forwarders, cargo insurers and other practitioners in the international trade will also significantly benefit from it.

Documentary credit is one of the oldest, most sophisticated and safest payment instruments used in international trade. Despite the fact that its demise has been anticipated for some time due to the increasing globalisation and developments in the area of e-commerce, the documentary credit is stronger than ever. It remains very important to carefully analyse the underlying risks in the foreign trade transaction and take appropriate measures. The recent global financial crisis has fully shown the importance of trade finance in the world economy and the need to appreciate and properly use the traditional, well-established payment and security instruments.

Documentary credit provides very effective tool for mitigation of the risk of non-payment by the buyer, which is thus replaced by the payment undertaking of a bank (banks) to provide payment against documents which comply with the terms and conditions of this instrument – the documentary credit. The seller therefore undertakes payment risk of the issuing bank, whose payment obligation is legally independent from the contract of sale or any other contractual relationship the documentary credit relates to. If the payment risk (and the country risk) of the issuing bank is still too high for the seller, it is possible to safeguard an additional payment undertaking of another bank by means of its confirmation.

For more than 80 years, the International Chamber of Commerce (ICC) has played an essential role in the standardisation of this payment instrument. In the year 1933 it established the first Uniform Customs and Practices for Documentary Credits (UCP), which have been revised several times since. The last revision took place in 2007 (UCP 600). The ICC Banking Commission developed a practical complement to UCP, firstly to UCP 500 (2003). This complement, ICC publication called International Standard Banking Practice for the Examination of Documents under Documentary Credits was updated with the revision of UCP 600 in the year of 2007.

It is self-evident that the most complex and demanding part of the documentary credit transaction is the examination of presented documents. The whole concept of the documentary credit instrument is based on the impartial professional examination of presented documents required by the credit terms and conditions by a bank documentary checker. It is crucial that all parties to the documentary credit transaction are familiar with the main aspects of the documents used in foreign trade, the seller and the buyer pay attention to specification of payment conditions in their contract of sale (correctly and sufficiently describing the terms and conditions of the documentary credit to be established by the buyer, above all the content of the required documents). The seller, the beneficiary of the credit, needs to be aware of the international standard banking practices, especially in relation to the examination of documents under documentary credits. After all, if documents he presents to the bank do not comply, he might not be paid at all!

The practice shows that the task to get the documents right is indeed difficult. To build the capacity of being able to professionally examine the documents and make a decision whether they comply with the credit terms and conditions is a demanding process, both in time and efforts. This guide has been designed to address this concern. All important aspects of the documentary credit practice in relation to examination of documents are explained fully and professionally. General problems and possible solutions are outlined in an overview and more detailed information is given in the part dealing with examination of the individual documents.

I wish to congratulate the author of the book, who also serves as the secretary of our active banking commission, for writing this practical guide down and updating it in the light of the new ISBP, ICC publication No. 745E. My acknowledgements go also to other members of our banking commission who actively participated in the development of this book. I believe that this very comprehensive, informative and practical guide will significantly assist proper understanding of the relevant international standard banking practices and will support the successful utilisation of documentary credits in practice.

In Prague on 15 December 2014
Michal Mejstřík
Chairman of ICC Czech Republic
Professor of Charles University in Prague, Czech Republic

Mr. Pavel Andrle, BSc., LL.M, international trade finance trainer and consultant, is the founder & owner & managing director of consultancy company Trade Finance Consulting, s.r.o. He also serves as Secretary to the Banking Commission of ICC Czech Republic which he regularly represents at ICC Banking Commission meetings abroad. He has been deeply involved in the revision of UCP as a member of UCP 600 Consulting group which was formed by over forty experts from all over the world. In years 2010-2011 he also served as a member of the ICC Banking Commission Group of Experts who drafted the official ICC Banking Commission Opinions on ICC Rules. He has worked for a number of leading local and international banks in various positions (for instance as trade finance specialist, head of trade finance, trade finance risk manager, in-house trainer). He is a frequent lecturer in Documentary Credits, Bank Guarantees & Trade Finance for the Banking Institute, Institute of Foreign Trade Transport & Forwarding, ICC CR and Chamber of Commerce of Czech Republic. He is a regular facilitator in seminars abroad in English for ICC National Committees, bank associations and chambers of commerce world-wide.

He is appointed ICC CR expert to reply to enquiries related to Documentary Credits and Trade and Structured Finance – development of technical assistance consultancy services of ICC CR to banks, carriers, insurance companies and traders. It includes advisory services and in-house technical assistance in banks and companies.

He is a frequent DOCDEX Expert of ICC Centre for Expertise with ICC International Arbitration Court, ICC Paris. He has been active trainer under Global Trade Finance program of IFC (International Finance Corporation – a member of World Bank Group). He has also delivered trainings and/or consultancy services to many other DFIs. In November 2018 he joined DCW (Documentary Credit World, the world leading magazine on documentary credits, standbys and guarantees) Editorial Advisory Board.  Mr. Andrle also serves at the lead tutor in the Finance of International Trade with the electronic Business School International.

  • 1 copy: EUR 80 per copy
  • 2 – 5 copies: EUR 70 per copy
  • 6 – 10 copies: EUR 65 per copy
  • 11 – 19 copies: EUR 60 per copy
  • 20 – 49 copies: EUR 55 per copy
  • 50 and more copies: EUR 50 per copy

The orders for 20 and more publications will be handled with preference.

Trade Finance Consulting, s.r.o. reserves the right to amend the price and/or the terms and conditions of the sale at any time without any prior notice.

Packaging, postage and payment:

The cost of the packaging and postage will be added to the price of the ordered publications.

The cost of packaging will vary depending on the weight of the ordered publications and country of the destination (possibly 15 – 40 EUR for a small package: 5 books, 50 – 200 EUR for a bigger package: 30 books).

The price for the book including the cost of the packaging, postage and bank charges will be requested to be paid against the invoice. The invoice will be sent by e-mail by us to your e-mail address which please indicate in your purchase order.

Electronic ordering of publications

By sending, filling in or otherwise providing personal data (especially name, surname, address, telephone number, date of birth and photos) to the Trade Finance Consulting, s.r.o. (TFC), the person agrees to include these personal data into the TFC database and their possible subsequent processing (including through the processor) for the purpose of providing TFC services and products, operation of the TFC internal agenda and sending business messages. The above personal data are thus provided for an indefinite period, i.e. until the withdrawal of consent. Any person hereby acknowledges that he has the following rights in particular: he may revoke his consent free of charge at any time at the TFC address; he has the right to access personal data and the right to correct such personal data; and their disposal.