ICC to wrap up new documentary credit rules this year
The ICC Banking Commission is working toward final approval of a revision to UCP 500, ICC’s universally used rules on documentary credits. Three years in preparation, the revision, which may be completed as early as October, will contain major changes to rules which govern billions of dollars in letter of credit transactions each year.
UCP 600, as the new rules will be called, has new provisions which bankers, exporters and lawyers will need to know. The current draft, still subject to change, has some of the following features:
- a leaner set of rules, with 39 articles rather than UCP 500’s 49;
- a new section of “definitions”, containing terms such as “honour” and “negotiation”
- a replacement of the term “reasonable time” with a definite number of days for examining and determining compliance of documents;
- a new provision concerning addresses of the beneficiary and the applicant;
- an expanded discussion of “original documents”; and
- re-drafted transport articles aimed as resolving confusion over the identification of carriers and agent
In short, UCP 600 will be modern rules for a changing world.
The Banking Commission is meeting in Vienna today and tomorrow for a full day’s discussion on the current draft; a new draft will follow in late May. Current plans are to send a final draft to the Commission for an up or down vote at its meeting in Paris on 24-25 October.
On Thursday 26 October, ICC Events will host a conference on the UCP 600 in Paris.
A full discussion of some of the more controversial issues in UCP 600 can be found in the authoritative ICC newsletter.