Back in the mists of time ... ok, not quite that far ... but back in December 1993, the ICC released a publication titled ‘Standard Documentary Credit Forms for the UCP 500'.
In view of the recommendations promulgated by the ICC subsequent to the review of UCP 600, it is quite timely to again look at this publication.
We have highlighted in previous blogs that many of the problems that practitioners face can arise from poorly or badly drafted credits.
An issuing bank has a responsibility to work with its clients to ensure that the issued documentary credit fully meets the needs of each applicant in terms of specifying the appropriate documentary requirements, that will enable the smooth importation of the goods, and provide a suitable level of assurance, as to the quality, standard and/or type of goods being purchased; whilst ensuring that the documentary credit is in accordance with the bank's internal policies and procedures and regulatory guidelines to which it must adhere.
Not all credits are the same but the experience of URDG 758, which includes ‘Model Forms', demonstrates the value of providing a standard template.
Practice has shown that many banks around the world utilise out-dated, inappropriate documentary credit application forms. (Incidentally, one example of this is that almost every bank's application form, whether in paper form or on-line, will contain a pre-set requirement for the presentation of a draft.)
There is no doubt that, provided it is marketed correctly, considerable benefit could be obtained by a revision and update of the above-mentioned ICC publication.