It can be a fascinating experience to delve into earlier versions of Uniform Customs and Practice (UCP) in order to understand how it developed into one of the most trusted sets of rules ever used in the trade environment.
The International Chamber of Commerce (ICC) introduced UCP in 1933 with UCP 82, in order to alleviate the disparity between national rules on documentary credit practice. Further revisions occurred in 1951 (Publication No. 151), 1962 (Publication No. 222), 1974 (Publication No. 290), 1983 (Publication No. 400), 1993 (Publication No. 500) and, more recently, 2007 (Publication No. 600).
UCP 82 was not the first set of published rules to govern documentary credits. Regulations affecting export commercial credits were issued in the US in 1920 and were subsequently amended in 1926. In 1928, a group of banks in Denmark also produced joint regulations governing the handling of documentary credits.
A number of the key concepts surrounding UCP 600 can be seen in this first version of UCP.
As established in UCP 82, and has been the case ever since, the principle of autonomy (see separate blog) was emphasised by stating that documentary credits were distinct transactions from sales contracts.
Credits were, and still are, considered as definite undertakings of an opening (issuing) bank and could not be modified or cancelled without the agreement of ‘all concerned'.
An advising bank could be used to notify the credit to the beneficiary without any responsibility on the part of the advising bank: these days, an advising bank takes on no undertaking to honour or negotiate, in essence the same principle.
It is easy to see the basis of UCP 600 sub-article 14 (a) covering the standard for examination of documents: ‘Banks must examine all documents and paper with care so as to ascertain that on their face they appear to be in order.'
The content of the current disclaimer articles (34 & 35) contain a surprising amount of text that has survived from 1933, as does the force majeure article.
Whilst a number of differences can be seen in the ‘documents' section of UCP 82, a number of the key documents remain unchanged: Bills of Lading, Certificate of Insurance, Invoice, Inland Waterway document, Railway consignment document, Postal receipt.
The terms ‘about' and ‘circa', then as now, allow a tolerance not to exceed 10% more or 10% less.
The meaning of the terms ‘first half', ‘second half', ‘beginning', ‘middle' and ‘'end' have all remained unchanged.
A ‘transfer' article, whilst operationally different to today, was already in existence with UCP 82.
There is no doubt that the drafters of UCP 82 achieved a great deal and showed an incredible amount of foresight in the development of the rules. We have much to be thankful for.