In international trade, business circumstances often change — shipment delays, changes in goods, or adjustments in payment terms. To reflect these changes, an issued letter of credit (LC) may need to be amended. Article 10 of UCP 600 explains how amendments to an LC should be made, accepted, or rejected.
This article ensures both exporters and importers clearly understand how amendments affect their obligations.
What Does Article 10 of UCP 600 Say?
Article 10 provides the following key rules:
- Agreement of All Parties
- An LC cannot be amended without the agreement of the issuing bank, confirming bank (if any), and the beneficiary.
- Advising of Amendments
- Amendments must be advised through the advising bank (or confirming bank if added).
- The advising bank authenticates the amendment before forwarding it.
- Beneficiary’s Right to Accept or Reject
- The beneficiary is not obligated to accept an amendment.
- Partial acceptance is not allowed — the amendment must be accepted or rejected in full.
- Effectiveness of Amendment
- An amendment becomes effective only when the beneficiary communicates acceptance.
- If the beneficiary makes a presentation of documents after the amendment date without objection, it is considered acceptance.
Breaking Down Article 10
- Mutual Consent Required
- All involved parties must agree for an amendment to be valid.
- This prevents unilateral changes that could disadvantage one party.
- Beneficiary Protection
- The exporter (beneficiary) cannot be forced to accept unfavorable changes.
- Example: If shipment period is shortened, the exporter may reject the amendment.
- No Partial Acceptance
- The beneficiary cannot “pick and choose” parts of an amendment.
- Either the whole amendment is accepted, or the LC continues under its original terms.
- Implied Acceptance by Action
- If the exporter ships goods and presents documents under the amended terms without formally rejecting, it counts as acceptance.
Practical Trade Example
- An Indian exporter of spices receives an LC requiring shipment by 30th June.
- The importer in Canada realizes there will be port congestion and requests the issuing bank to amend the LC, extending the shipment deadline to 15th July.
- The issuing bank issues an amendment, which is authenticated and advised to the exporter by the advising bank.
- The exporter accepts the amendment and ships on 10th July, presenting documents accordingly.
✔ The amendment is effective because the beneficiary accepted it.
✔ If the exporter had ignored the amendment and shipped by 30th June, the LC would still be valid under the original terms.
Why Article 10 Matters
- Provides fairness — no party can be forced into changes.
- Protects exporters from unfavorable amendments.
- Prevents disputes by clarifying acceptance rules.
- Ensures uniform handling of amendments across global trade.
Final Thoughts
Article 10 of UCP 600 highlights the principle of mutual agreement and beneficiary protection in trade finance. Amendments must be properly advised, authenticated, and fully accepted. By setting clear rules, Article 10 avoids misunderstandings and strengthens trust in letters of credit as a reliable financing instrument.