Int'l Rules - Trade‎ > ‎UCP 600‎ > ‎B. Liability‎ > ‎

Article 07

Issuing Bank Undertaking

a.     Provided that the stipulated documents are presented to the nominated bank or to the issuing bank and that they constitute a complying presentation, the issuing bank must honour if the credit is available by:

i.     sight payment, deferred payment or acceptance with the issuing bank;

ii.    sight payment with a nominated bank and that nominated bank does not pay;

iii.   deferred payment with a nominated bank and that nominated bank does not incur its deferred payment undertaking or, having incurred its deferred payment undertaking, does not pay at maturity;

iv.    acceptance with a nominated bank and that nominated bank does not accept a draft drawn on it or, having accepted a draft drawn on it, does not pay at maturity;

v.     negotiation with a nominated bank and that nominated bank does not negotiate.

b.     An issuing bank is irrevocably bound to honour as of the time it issues the credit.

c.     An issuing bank undertakes to reimburse a nominated bank that has honoured or negotiated a complying presentation and forwarded the documents to the issuing bank.

Reimbursement for the amount of a complying presentation under a credit available by acceptance or deferred payment is due at maturity, whether or not the nominated bank prepaid or purchased before maturity. An issuing bank's undertaking to reimburse a nominated bank is independent of the issuing bank’s undertaking to the beneficiary.