Post by B Pranava

UCP 600 Article 7 – Issuing Bank Undertaking (CDCS Quick Summary) Core Principle The issuing bank gives an irrevocable undertaking to honor a complying presentation. Key Points Issuing Bank Becomes Bound at IssuanceThe undertaking starts when the LC is issued. Not when documents are presented. Must Honor a Complying PresentationIf documents comply with: LC terms UCP 600 ISBP The issuing bank must honor. Independent ObligationThe bank cannot refuse payment because: Goods are defective Buyer disputes the contract Applicant is insolvent Applicant instructs the bank not to pay Must Reimburse Nominated BankIf a nominated bank honors or negotiates a complying presentation, the issuing bank must reimburse it. Applies to All Types of CreditsSight Payment Deferred Payment Acceptance Negotiation CDCS Exam Formula Complying Presentation = Honor by Issuing Bank Issuance of LC = Issuing Bank Becomes Irrevocably Bound Common Exam Trap ❌ Applicant says "Don't pay, goods are defective." ✅ Issuing bank must still honor if documents comply. One-Line CDCS Memory Note Article 7 creates the issuing bank's irrevocable undertaking to honor a complying presentation and reimburse any nominated bank that has honored or negotiated such presentation.