Legal Definitions - UCP

UCP stands for Uniform Customs and Practice for Commercial Documentary Credits. It is a set of rules that govern international trade transactions involving letters of credit.

For example, if a company in the United States wants to purchase goods from a company in China, they may use a letter of credit to ensure payment. The UCP provides guidelines for how this letter of credit should be structured and processed to ensure a smooth transaction.

The UCP helps to standardize international trade practices and reduce the risk of disputes between parties involved in a transaction. By following the UCP guidelines, companies can ensure that their transactions are processed efficiently and effectively.