As expected, but nonetheless welcome, the Executive Committee of ICC Banking Commission has announced its Decision not to undertake at this stage a revision of UCP600
The UCP 600 (“Uniform Customs & Practice for Documentary Credits”) is the official publication of the ICC (International Chamber of Commerce) containing the rules which apply internationally to Letters of Credit.
The UCP was last revised in 2006-2007 and it has been debated for some time whether a new revision was needed. Most national committees – the UK included – were of view that no update was needed and the ICC has thankfully endorsed that view.
It undertook extensive consultation and found that the problems that did exist were mostly issues of practice due to poor drafting of credits, lack of understanding, lack of attention to detail and excess data being added to documents. The problems (for the great part) were not due to any defects in the Rules. The Committee has decided to improve guidance and training, to review pricing and digital availability and to encourage greater awareness through smart usage of information. Details will follow.
The need for a revision will be kept under review but for now bankers, traders, lawyers and transporters can breathe a sigh of relief.
Charles Spragge, Partner
This briefing was posted on 16 June 2017.