The ICC rules, called UCP, are the most successful private rules for trade ever developed. An estimated $1 trillion a year in trade is financed using letters of credit based on the UCP.
First issued in 1933, the UCP have been through five revisions, the latest being the present UCP 500, which came into force in 1994. Since that time, new developments in transport and electronic commerce have spurred the current revision of the rules.
During more than six hours of debate, 170 participants from 40 countries discussed the key issues remaining to be decided. These included, among others, whether to allow discounting of a deferred payment credit, whether to retain the concept of a “reasonable time” to accept or refuse documents, and whether to remove the term “on its face” from the rules.
Based on these discussions, the UCP Drafting Group will issue a further revised draft, which will then be sent to ICC national committees for comment. This draft, with any further revisions, will be discussed at the next meeting of the Banking Commission in May 2006 in Vienna.
The Banking Commission’s officers have expressed their belief that the final revision of the rules will be available to banks and practitioners in 2006.
The inside story of what to expect in the new rules can be found in the ICC’s authoritative quarterly newsletter, DCInsight.