The International Chamber of Commerce (ICC) has announced the update and alignment of three critical banking rules following a mandate from the ICC Global Banking Commission members in October.
The updated rules include the International Standard Banking Practice (ISBP) for the examination of documents under UCP 600, the Uniform Customs and Practice for Documentary Credits for Electronic Presentation (eUCP), and the Uniform Rules for Collections for Electronic Presentation (eURC).
These revised rules became effective on 1 July 2023 and will form a foundation for trade finance as the industry advances its digital agenda and more jurisdictions update their legislation to align with the Model Law on Electronic Transferable Records (MLETR).
Patrik Zekkar, CEO at Enigio, told TFG: “Legal barriers to handling commercial trade documents in digital form are rapidly disappearing, providing a huge opportunity for enhancing international trade. The alignment of eUCP with MLETR is key in order to enable such documents to be freely transferable to all parties.”
According to the ICC, “It is inevitable that traditional trade instruments will, over time, inexorably move towards a mixed ecosystem of paper and digital, and, ultimately, to electronic records alone.”
The process involved aligning eUCP 2.1 and eURC 1.1 with contemporary digital legislation, ensuring improved definitions and a more coherent application of the rules within the MLETR framework. Consequently, the newly aligned versions, eUCP Version 2.1 and eURC Version 1.1 will replace the previous editions.
Both of these frameworks provide many benefits in advancing documentary credits in a digital environment and ensuring the continued relevance of these valuable instruments in mitigating trade risk.
The ICC Commission also released an updated version of the ISBP (International Standard Banking Practice) that aligns with several ICC opinions, incorporating significant additions to the rules. Notably, the update addresses areas such as terminology, preliminary conditions, signatures and signs, multimodal transport documents, and insurance documents.
ISBP is a vital tool for trade finance professionals dealing with documentary credits that provides practical guidelines for integrating UCP 600 principles into day-to-day operations.
It ensures up-to-date practices for examining documents and assists beneficiaries in creating and presenting them to banks. It should be used alongside UCP 600 for comprehensive trade finance guidance.
These updates and alignment of banking rules aim to facilitate trade finance operations, providing businesses with clearer guidelines and increased efficiency. Translated versions of the rules will be made available upon request by ICC National Committees, enabling broader access and understanding.