UCP600 Revision Off the Table
It is no secret to the trade finance community that the Uniform Customs and Practices (UCP600) won't be revised anytime soon. The ICC Executive Committee released a paper over six months ago detailing the results of votes held with National Committee members in at meetings in Rome and Paris. These results made it plain that the majority of National Committees preferred to keep the existing rules, despite a number of comments in favor of revision.
"Any problems lay not with the rules themselves, but with the application"
The aforementioned ICC document (Document 470/1272) makes the case that the outlying concerns about UCP600 dealt less with the rules, and rather the way they are utilized in international standard banking practice. It goes on to say that the majority of complaints fall into one of the following categories:
- 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 added to documents;
- Restricted access to ISBP 745.
In the November/December issue of Documentary Credit World, David Meynell, Senior Technical Advisor to the ICC Banking Commission makes a similar case. He reiterates that a "three-pronged" approach is necessary to address deficiencies in application of the rules, namely Guidance, Access, and Marketing. Meynell goes on to address specific issues raised against the existing UCP. For the full article, refer to page 26 of the current DCW.
Moving Ahead with UCP600
With the ICC's prescriptions of expanding training, accessibility and awareness of the UCP600 practice rules, questions remain as to how these goals can be delivered upon. We will surely see ICC efforts in the latter two, but how can bankers and corporates best use UCP600? Perhaps the only answer at this point is to utilize the tools available.
As for certifications and training, there are a number of options available from Coastline Solutions and the ICC itself.
For user guide reference, IIBLP's own UCP600: An Analytical Commentary and its subsequent Update is second to none both in its level of detail, and breadth of coverage. With an article-by-article analysis, each rule is annotated in light of legal cases, ICC Opinions, and other practice rules (ISP98, URDG 758) and legal systems (UN LC Convention, US UCC Article 5, etc.). No stone is unturned in the UCP Analytical Commentary. You can purchase it here.
Another publication of great use to practitioners is Kim Sindberg's UCP600 Transport Documents. An internationally recognized trade finance expert, Kim Sindberg is currently Technical Advisor to the ICC, and is a foremost expert on UCP transport documents. You can find his book here.