As many of you are aware, the process for revising ICC rules is complex and lengthy.
Between us, we have been involved in numerous ICC Working Groups, drafting, revising and publishing ICC Rules and Standards for the past 25 years and have, in that time, gained a significant amount of experience in the process.
At the outset of any revision it needs to be demonstrated that the existing rules are no longer supporting the trade finance community and are proving to be a hindrance. If a rule is wrong or there is a gap, this supports consideration of a revision. Similarly, if new sets of rules are to be produced, there must be a solid justification behind them.
A strong business case is needed for any revision due to the need for not only a minimum 3-year commitment, but also a regular meeting schedule between Working Group participants. In the past, an effective Working Group required 6-8 participants available for frequent meetings, travel, phone conferences and independent work outside the meetings and calls - this is a big investment in time for any individual or organisation.
Physical meetings have been required every 2-3 months necessitating availability of a venue and surrounding infrastructure for a period of usually one week. For example, during the drafting of UCP 600 there were 15 separate meetings of one-week duration. In addition, the Working Group will often meet at every Banking Commission meeting for at least 2-3 days before the meeting and 2-3 days after.
The work does not end with a Working Group: in addition, there has been a requirement for a Consulting Group consisting of up to 20 members, with a similar infrastructure and time investment required. And to round it all off, ICC National Committees are expected to provide a strong contribution for the entirety of the revision project.
The cost never ends with the revision itself. Once a new version of a set of rules is approved, it generates an immediate need for education and learning within organisations and can necessitate internal systems and operations changes. The combined cost of purchasing new publications, running staff workshops, hosting client awareness events and updating internal procedures can be very high.
So could this be improved?
As we have highlighted in the past, a good starting point, and prior to any proposed revision, it is always worth considering a review of existing delivery and distribution channels for trade information originating from the ICC Banking Commission. Many of the problems that we have seen could be resolved by enhanced knowledge of ICC Opinions and publications.
We would again also refer to the conclusions from the Jakarta meeting of the ICC Banking Commission:
If, after this process, it is recognised that there is still a need for a revision or a new set of rules, then the process leading towards adoption should be considered up-front.
It is worth using URBPO 750 as a model. The drafting process itself, from start to finish, took approximately 15 months. Additionally, advantage was taken of a few earlier months in order to prepare for the actual drafting itself.
Meetings of the drafting group took place on a regular basis and were based in one location only. This location was easily accessible to the majority of the drafting group members, and the rest could participate by phone conference. The group prepared frequent working drafts and any required changes were made promptly.
This allowed for regular distribution of formal drafts to ICC National Committees for comment. Strict deadlines were put in place and advisory sessions were held at the ICC Banking Commission meetings that took place during the drafting process. A Consulting Group also reviewed the texts of the drafts.
There is no doubt that the above approach dramatically shortened the entire process which, allowing for the preparation period, was completed within 18-21 months.
However, we believe this could be curtailed even further. There is no real need for a Consulting Group, as all drafts are, in any event, passed through ICC National Committees.
Physical meetings could be reduced to a minimum with much of the communication covered by email and phone.
Additionally, with technology as it is, greater advantage should be taken of digital techniques with, potentially, electronic versions of draft rules being placed online for quicker comment.
Obviously, each set of rules will come with its own challenges. But there is no doubt that the process can be made more efficient and effective.