What does UCP 600 govern?

UCP 600, which stands for the Uniform Customs and Practice for Documentary Credits, specifically governs the rules of Letters of Credit. This set of rules provides a standardized framework for the issuance and use of Letters of Credit in international trade transactions. It ensures clarity and consistency in the handling of Letters of Credit, which are financial instruments used by buyers and sellers to facilitate trade while minimizing risks.

The UCP 600 outlines the obligations and rights of all parties involved in the transaction, including the applicant, the issuing bank, and the beneficiary. By establishing rules that help prevent disputes, UCP 600 greatly enhances trust and efficiency in international trade.

The other options refer to different aspects of international trade and finance: procedures for international shipping, standards for currency exchange rates, and guidelines for foreign investment treaties do not fall under the scope of UCP 600, which is specifically oriented towards the mechanics and principles governing Letters of Credit.