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Regular readers of our blogs will be aware of our viewpoint on the ISBP 745 - applied correctly, ISBP helps reduce the large percentage of documents refused for discrepancies on first presentation.

We have always stated that the ISBP should be a continually evolving and expanding collection of practices. In fact, the ISBP Working Group stressed that as most of the documented practices derived from approved ICC opinions, it is important to ensure that, where appropriate, such Opinions are eventually incorporated into the ISBP. Not an easy task and one that would require careful preparation and a detailed outline on how such an updated publication would be disseminated, but it could provide significant benefit.

There also needs to be a process whereby additional practices can be raised by National Committees on a regular basis for discussion and approval, rather than waiting for a revision of the publication to occur. 

But is it now time for the ISBP 745 to be revised? Having entered into force in 2013, this may well be the case.

Since inception, and in accordance with the wishes of ICC National Committees, ISBP has been restricted to the examination of documents under documentary credits. This has continued throughout the various revisions.

However, a future revision could perhaps consider a wider application. 

Although it is accepted that approximately 50% of recognised problems apply to presented documents, other issues often arise.

We mentioned in a previous blog that the majority of problems are caused by: 

• Poor drafting of the credit; 
• Lack of understanding of documentary credit workflows and the principles of UCP 600; 
• Lack of attention to detail and management of the production, shipment and document collation processes; 
• Excessive and unnecessary data being added to documents;
• Limited access to ISBP 745.

Each of the above problems is surmountable with more guidance, particularly with respect to an ‘enhanced' ISBP 745 which could potentially reduce discrepancy rates by:

• Improving drafting of LC's by issuing banks.
• Helping advising / confirming banks to understand the risks and implications.
• Assisting beneficiaries in understanding the implications of providing certain documents and ensuring they can meet timeframes and deadlines.
• Addressing problems prior to presentation of documents.
• Avoiding ... to the maximum possible ... LC's that exclude specific articles / sub-articles of UCP.

These issues go far wider than the examination of documents. We would argue that ‘International Standard Banking Practice' should be established much earlier in the process, i.e. at the time of drafting the credit. It should then extend throughout the various workflows: issuance, advising/confirming, amendment, etc.

An in-depth analysis of ISBP is available within our training modules. 

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