ICC issue more guidance documents
A Happy New Year from lcviews!
End 2019 the ICC published 3 new guidance documents:
GUIDANCE NOTES FOR SIMPLE LC FORMAT
This Guidance Paper includes recommendations for a simple LC format.
The background for the document is the discussions on whether or not there should be a so-called “lite-UCP”. The idea did not fly – but it did foster the idea of a “lite-LC”. And voila: Here it is ….
In essence the idea is to remove as much complexity as possible from the LC – already from the time it is issued. I.e. only calling for the documents absolutely needed – and not adding lengthy and complex requirements; and surely not excluding or modifying UCP 600 articles. Simply to have a basic LC with exactly what is needed (and agreed) … nothing more – nothing less!
It is fully acknowledged that this simple format is not one that “fits all”. But it may fit some. It may even fit many. Especially those who are fed up with discrepancies, correcting documents, late payments – and in fact is considering open account as an alternative. Or those where the list of documents and the list of requirements are simply there because of habit!
It is fair to say, that the work done by the ICC – could as such have been done by anyone. It is simply an LC format based on UCP 600 stripped of all the unnecessary “flesh”. In other words, this is something that could have been done; but in general, is not. It is my hope that the new LC format will serve as inspiration to banks – and that banks will market it to the appropriate customers. I.e. to the customers that would have a benefit of this.
In fact, I really really hope that. This is (or can be) a really powerful step by the ICC in reducing the number of discrepancies – and in fact innovating the LC instrument … by simplifying it! How much more Zen can it be?
But – and there is a but – without the help of the Trade Finance banks around the world – this will simply be a nice document… I hope for more. Much more …
ADDENDUM TO ISBP 745
ISBP 745 (International Standard Banking Practice for the Examination of Documents under LCs) reflects existing practice, whilst ICC Opinions reflect existing and evolving practice. In order to reflect this, it is intended that an annual addendum be produced reflecting the previous 12 months ICC Opinions and indicating how they relate to ISBP 745 and UCP 600. As an initial step, an addendum, covering all ICC Opinions since the introduction of ISBP 745 in July 2013, has been created.
Again, a good initiative that will effectively keep track of when/if practice evolves beyond the ISBP 745.
SUPPLEMENT TO THE COMMENTARY ON eUCP VERSION 2.0 AND eURC VERSION 1.0 (eRULES)
The new eRules came into force on 1 July 2019, and an article-by-article analysis has been made available (Drafted by Dave Meynell). Now further handling guidance is provided here in respect of the utilisation of the eRules.
The above makes a transition into 2020 – where we should all make the promise to take good care of each other – and the LC.
Kind regards
Kim