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We recently outlined the background to the two most commonly referenced issues in respect of a potential revision: drafts and negotiation.

Two further issues were also high on the list of questions from practitioners and were discussed during the Jakarta ICC Banking Commission meeting in April 2017.

ISBP

Three points have been mentioned on this subject:

Introduce ISBP as a mandatory source to check documents/treat discrepancies. It had been stated that some banks did not properly use ISBP nor recognise it as a support for the interpretation of UCP 600. The point was made, that as long as banks have the flexibility to consider ISBP or not, a number of ‘grey' areas will exist.

-       In response, it was highlighted that the introduction to UCP 600 states: "During the process, notice was taken of the considerable work that had been completed in creating the International Standard Banking Practice for the Examination of Documents under Documentary Credits (ISBP), ICC Publication 645. This publication has evolved into a necessary companion to the UCP for determining compliance of documents with the terms of letters of credit." These comments have equal applicability to ISBP 745.

-       Furthermore, and as mentioned in the introduction to ISBP 745, "This publication and the UCP should be read in their entirety and not in isolation." ISBP 745, Preliminary considerations paragraph (i), emphasises this point by stating that the publication is to be read in conjunction with UCP 600 and not in isolation.

Integrate ISBP with UCP

-       It is important to note that, in the event of non-compliance, rules must have a consequence: otherwise the action is a practice.

ISBP to include recent Opinions and to be issued and updated regularly

• It is apparent that significant attention must be paid to the distribution of, and guidance in, ISBP - this is a key issue moving forward. The question of online access, pricing, regular updates in line with Opinions, etc., must also be addressed.
• During the last revision of ISBP, it was decided by National Committees that coverage should be restricted to the examination of documents only. Perhaps this could be widened or be the subject of another accompanying publication to the UCP?

Digitalisation

Digitalisation of the UCP and associated material, making it easier and more cost-effective to continuously update the rules and link Opinions to specific articles/paragraphs, thereby further reducing doubt among importers/exporters and their banks, regarding interpretation of specific rules.

• It is evident that there exists a need to support far more comprehensive and widely circulated guidance, which can be tailored to the needs of specific market segments.
• A key facilitator will be to embrace digitisation in future availability and archiving of ICC Banking Commission material.
• A new Digitalisation Working Group has been established under the auspices of the ICC Banking Commission and we will provide more details on this in a later blog.

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