An issue on uniform customs and practice for documentary credits (UCP) no 600 for Islamic letter of credit

Islamic banks in Malaysia offer Letter of Credit (LC) Wakalah (agency) and LC Murabahah (cost-plus) as two of their main trade finance facilities. LC is the product of International Chamber of Commerce, the world business organization based in Paris and it is governed by the Uniform Customs and Prac...

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Main Authors:	Syed Alwi, Sharifah Faigah, Ibrahim, Uzaimah, Sawari, Fuad
Format:	Article
Language:	English
Published:	ELSEVIER 2013
Subjects:	HG Finance HG1501 Banking KBP Islamic Law
Online Access:	http://irep.iium.edu.my/40191/ http://irep.iium.edu.my/40191/ http://irep.iium.edu.my/40191/ http://irep.iium.edu.my/40191/1/1-s2.0-S2212567113002268-main.pdf

id	iium-40191
recordtype	eprints
spelling	iium-401912015-01-05T02:46:25Z http://irep.iium.edu.my/40191/ An issue on uniform customs and practice for documentary credits (UCP) no 600 for Islamic letter of credit Syed Alwi, Sharifah Faigah Ibrahim, Uzaimah Sawari, Fuad HG Finance HG1501 Banking KBP Islamic Law Islamic banks in Malaysia offer Letter of Credit (LC) Wakalah (agency) and LC Murabahah (cost-plus) as two of their main trade finance facilities. LC is the product of International Chamber of Commerce, the world business organization based in Paris and it is governed by the Uniform Customs and Practice for Documentary Credits (UCP) No. 600 (UCP 600). The objective of this paper is to clarify an issue on a few articles of the UCP 600 as the governing rules of LC Wakalah and LC Murabahah. At the same time, this paper discusses the practice of some Islamic banks in Malaysia in facing this issue. This study adopts the qualitative method as the main research methodology where both the primary and the secondary data are used. For the primary data, semi-structured interviews were conducted with bankers who are directly involved with the operation of Islamic LCs. As the result, this paper discovers an issue on the UCP 600 for Islamic LCs that is the issue of insufficiency in dealing solely with documents for LC Wakalah and LC Murabahah without checking the conditions of goods. This paper analyzes this issue by determining whether it is in line with the Shariah principles. Lastly, a solution to resolve the issue on the UCP 600 for Islamic LCs is recommended to Bank Negara Malaysia. ELSEVIER 2013-01 Article PeerReviewed application/pdf en http://irep.iium.edu.my/40191/1/1-s2.0-S2212567113002268-main.pdf Syed Alwi, Sharifah Faigah and Ibrahim, Uzaimah and Sawari, Fuad (2013) An issue on uniform customs and practice for documentary credits (UCP) no 600 for Islamic letter of credit. Procedia Economics and Finance , 7. pp. 126-133. ISSN 2212-5671 http://www.sciencedirect.com/science/article/pii/S2212567113002268 10.1016/S2212-5671(13)00226-8
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG Finance HG1501 Banking KBP Islamic Law
spellingShingle	HG Finance HG1501 Banking KBP Islamic Law Syed Alwi, Sharifah Faigah Ibrahim, Uzaimah Sawari, Fuad An issue on uniform customs and practice for documentary credits (UCP) no 600 for Islamic letter of credit
description	Islamic banks in Malaysia offer Letter of Credit (LC) Wakalah (agency) and LC Murabahah (cost-plus) as two of their main trade finance facilities. LC is the product of International Chamber of Commerce, the world business organization based in Paris and it is governed by the Uniform Customs and Practice for Documentary Credits (UCP) No. 600 (UCP 600). The objective of this paper is to clarify an issue on a few articles of the UCP 600 as the governing rules of LC Wakalah and LC Murabahah. At the same time, this paper discusses the practice of some Islamic banks in Malaysia in facing this issue. This study adopts the qualitative method as the main research methodology where both the primary and the secondary data are used. For the primary data, semi-structured interviews were conducted with bankers who are directly involved with the operation of Islamic LCs. As the result, this paper discovers an issue on the UCP 600 for Islamic LCs that is the issue of insufficiency in dealing solely with documents for LC Wakalah and LC Murabahah without checking the conditions of goods. This paper analyzes this issue by determining whether it is in line with the Shariah principles. Lastly, a solution to resolve the issue on the UCP 600 for Islamic LCs is recommended to Bank Negara Malaysia.
format	Article
author	Syed Alwi, Sharifah Faigah Ibrahim, Uzaimah Sawari, Fuad
author_facet	Syed Alwi, Sharifah Faigah Ibrahim, Uzaimah Sawari, Fuad
author_sort	Syed Alwi, Sharifah Faigah
title	An issue on uniform customs and practice for documentary credits (UCP) no 600 for Islamic letter of credit
title_short	An issue on uniform customs and practice for documentary credits (UCP) no 600 for Islamic letter of credit
title_full	An issue on uniform customs and practice for documentary credits (UCP) no 600 for Islamic letter of credit
title_fullStr	An issue on uniform customs and practice for documentary credits (UCP) no 600 for Islamic letter of credit
title_full_unstemmed	An issue on uniform customs and practice for documentary credits (UCP) no 600 for Islamic letter of credit
title_sort	issue on uniform customs and practice for documentary credits (ucp) no 600 for islamic letter of credit
publisher	ELSEVIER
publishDate	2013
url	http://irep.iium.edu.my/40191/ http://irep.iium.edu.my/40191/ http://irep.iium.edu.my/40191/ http://irep.iium.edu.my/40191/1/1-s2.0-S2212567113002268-main.pdf
first_indexed	2023-09-18T20:57:38Z
last_indexed	2023-09-18T20:57:38Z
_version_	1777410411241406464

An issue on uniform customs and practice for documentary credits (UCP) no 600 for Islamic letter of credit

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