An Appraisal of Administration of Letter of Credit in Ethiopia in Light of UCP 600 and UCC

Abstract

Letter of Credit is an indispensable document in the international sale of goods. International sale of goods probably may be very cumbersome without this vital document. This article tries to critically analyze the administration of letter of credits in Ethiopia focusing on its operation cycles from its issuance to presentation of documents and payment during its life time under the commercial code of Ethiopia in light of UCP600 by employing doctrinal legal research methodology and analytical approach. The commercial code of Ethiopia is a domestic law that tries to address the issues of letter of credits in general and administration of letter of credits in particular. However, the code is not congruent with and detail like international instruments dealing with letter of credits and its operational cycles from its issuance to presentation of documents and payment —the Uniform Customs and Practice to Documentary Credits and Uniform Commercial Code. The Commercial Code does not include the newly developed forms and features like formality requirement, fraud exception rule and electronic letter of credit. This has an impact on international sale of goods to which Ethiopia is a party and hence this call for revision of the pertinent provisions of the commercial code of Ethiopia.