FCCISL welcomes revised ICC rules

Ramani KANGARAARACHCHI

The importance of the application of international standards in documentary credit operations is at an all time high with the downturn in the global economy.

Speaking at the inaugural workshop on revised ICC rules for Demand Guarantees, Federation of Chamber of Commerce(FCCISL) President Kosala Wickramanayake said the revision of ICC Uniform Rules for Demand Guarantees (URDG 758) which came into force from July 01, creates a new set of independent guarantee rules for the twenty first century.

They are clear, 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).

He said the new URDG 458 rules were used by banks and businesses across continents and industry sectors and it was endorsed by international organizations, multilateral financial institutions, bank regulators, lawmakers and professional federations.

In contrast to the failed uniform rules for Contract Gurantees (URDG325), the latest rules reflect the reality of the international demand guarantee market and has struck a reasonable balance between the interest of all the parties involved.

Wickramanayake said the revised Rules UCP 600 Uniform Customs and Practices for Documentary Credits will soon complete 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 adopted.

The result is the successful international attempt at unifying rules ever, as the UCP has a substantially universal effect. This latest version UCP 600 commenced on July 01, 2007.

He said that FCCISL organized this training program because correct understanding and interpretation of these practical ICC tools for international trade finance is crucial for all their users.