Two Day Workshop on UCP 600 and ISBP 2007 Best Practices
The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) as the nodal private sector organization representing the Confederation of Asia Pacific Chamber of Commerce and Industry (CACCI), commenced conducting two day workshop on the UCP 600 and ISBP 2007 Best Practices and Revised ICC Rules for Demand Guarantees URDG – 758 on 20 July 2010 at the Cinnamon Grand Hotel, Colombo.
Mr. K.G.D.D. Dheerasinghe, Senior Deputy Governor, Central Bank of Sri Lanka was the Chief Guest at this workshop and delivered his speech fallowing the welcome addressed by Mr. Kosala Wickramanayake – President – Federation of Chambers of Commerce and Industry of Sri Lanka.
Program was conducted by Mr. Pavel Andrle who is an active member of the ICC Banking Commission and an International Trade Finance Specialist. He is the author of the book “Documentary Credits – A Practical Guide for Exporters” which has been published in the Czech Republic to wide acclaim. Further, he is a lecturer in documentary payments, financing foreign trade etc.
This was a good opportunity for the officials in the Banks, Exports & Imports Organisations, Insurance companies, Traders, Carriers, Freight Forwarders, Legal Councils and Advocates as well as professionals in the Trade Finance, Banks and Risk Management Departments to participate in these workshops and to gain a solid knowledge of how to apply UCP 600 and URDG 758 in day to day operational practice. Over 40 participants attended this program.
The revised Rules UCP 600 Uniform Customs and Practices for Documentary Credits will soon celebrate its three years of successful operation. Hand in hand with this revision the International Standard Banking Practice (ISBP) for the Examination of Documents under Documentary Credits were also updated and formally adopted.
The result is the most successful international attempt at unifying rules ever, as the UCP has substantially universal effect. The latest revision was approved by the Banking Commission of the ICC at its meeting in Paris on 25 October 2006. This latest version, called the UCP600, formally commenced on 1 July 2007.
The correct understanding and interpretation of these practical ICC tools for international trade finance is for all their users crucial.
The revised ICC Rules URDG Uniform Rules for Demand Guarantees came into force from 1st July 2010.
This revision of ICC Uniform Rules for Demand Guarantees (URDG 758) creates a new set of independent guarantee rules for the twenty-first century. The new URDG are clear, more precise and more comprehensive than their predecessor, URDG 458. The present revision uses language consistent with that in ICC’s universally accepted Uniform Customs and Practice for Documentary Credits (UCP 600).
The new URDG 758 succeeds URDG 458. Over 17 years of practice (1992 – 2009), URDG 458 proved to be both successful and reliable. They were used by banks and businesses across continents and industry sectors. URDG 458 was endorsed by international organizations, multilateral financial institutions, bank regulators, lawmakers and professional federations. In contrast to the failed Uniform Rules for Contract Guarantees (URCG 325), URDG 458 reflected the reality of the international demand guarantee market and struck the most reasonable balance between the interests of all the parties involved.
International Organizations and Professional Federations have endorsed the URDG, Lawmakers have used them as model for national statutes, and Banks and Businesses apply them across the world in their way to day to day guarantee business.
With the downturn in the global economy and the resultant increase trade credit risk the importance of the application of international standards in documentary credit operations is at an all time high. Taking into account the impact of the global economic crisis and the significant shift to traditional trade finance instrument- documentary credits FCCISL believed that the workshop was timely and relevant.