UN endorses ICC Documentary Credit Rules
ICC’s most recent revision of the Uniform Customs and Practice for Documentary Credits (UCP 600) was officially endorsed by the UN Commission on International Trade Law (UNCITRAL) at its 42nd annual session in Vienna.
UCP plays an instrumental role in global trade finance, with its rules implemented in more than 175 countries. UCP has gone through seven versions that have appeared since 1933, with their antecedents dating back to 1920.
“The UNCITRAL endorsement of the ICC UCP rules will undoubtedly define the direction of banking practice, establish international unity with regards to these practices, and alleviate any confusion and miscommunication which could arise in the completion of trade transactions,” remarked Thierry Senechal, Policy Manager for the ICC Banking Commission .
UNCITRAL is composed of 60 member states elected by the United Nations General Assembly representing the world’s principal geographic regions and economic and legal systems. States not members of the Commission and international governmental organizations may attend the session as observers and participate in the deliberations.
ICC was invited as an international non-governmental organization to attend the session (29 June to 17 July) as an observer and provide expertise and international experience to facilitate the deliberations on UCP matters.
“UCP 600 endorsement is an important milestone for ICC as it reinforces the ICC mandate of removing legal obstacles to international trade by progressively modernizing and harmonizing trade law,” said Pradeep Taneja, Head of Trade Finance at the Bank of Bahrain & Kuwait and Chair of the ICC Bahrain Trade Finance Forum.
“Furthermore, the universal acceptance of UCP by UNCITRAL, composed of widely divergent economic and judicial systems, is a testament to the success of ICC rules and represents the most powerful effort to harmonize the rules on an international level,” Mr Taneja added.
Mr Taneja explained the ICC and UCP revision process during the UN commission’s plenary session. He announced that the UCP rules had been adopted unanimously by the ICC Banking Commission 91 to 0 in October 2006, the result of more than three years of work by different ICC groups, including all ICC national committees. The rules formally came into force 1 July 2007.
Delegates to the 42nd UNCITRAL session welcomed the new revision, praising the text for its comprehensiveness and leaner approach. In particular, the American and German delegates openly expressed their appreciation for the work of ICC and fully supported the endorsement of the rules.