Blog

UCP 700 on the horizon?

09/12/2016

Recent activity on social media and comments from ICC National Committees would indicate that this is still a matter under review. Whilst most commentators indicate no support for a revision, there is a small, but vocal, minority pressing for a revision.

 

In October 2016, the ICC Banking Commission Executive Committee released a paper recommending that UCP 600 not be revised at this stage. We are aware that, in response to feedback, there will be further discussion on this issue and it is very likely that more comment can be expected from the ICC.

 

We first commented on this issue in a blog over one year ago and, it is fair to say, that our viewpoint remains unchanged. 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.

 

As highlighted within the ICC recommendation paper, 50% of problems that have been identified in ICC Opinions apply to the presented documents: it is a justifiable assumption that a greater understanding of ISBP 745 would help alleviate these problems and greatly reduce this percentage. As regards the remaining 50%, it is difficult to see how a revision of UCP would make much material difference.

 

We continue to maintain that simple tasks can reduce discrepancy rates:

  • Improved drafting of LC's by issuing banks.
  • Thorough review of LC's by advising / confirming banks to understand the risks and implications.
  • Beneficiaries to clearly understand the implications of providing certain documents and ensure they can meet timeframes and deadlines.
  • Close and constant communication between beneficiary and logistics / document providers.
  • Liaison between all parties in case of unforeseen problems: beneficiary / applicant / banks.
  • Will save time and money if a problem can be addressed prior to presentation of documents.
  • Avoid ... to the maximum possible ... LC's that exclude specific articles / sub-articles of UCP.

 

In summary, we are still not convinced that there is a compelling argument strong enough to warrant the work and cost that a revision process will cause.

 

We await with interest the next steps from the ICC.

 

 

 

 

www.tradefinance.training


Back to recent articles