Uniform Customs Practice 600 (UCP) of Intl.Chamber of Commerce, please provide me the details?

Question

Please provide me the information related to UCP 600 (Uniform Custom Practice) by Intl. Chamber of Commerce (ICC) or is there any special certificate / diploma program available and How to approach them. Thank you and regards.

Answer 1

The Uniform Customs and Practice for Documentary Credits (UCP) is a set of rules on the issuance and use of letters of credit. The UCP is utilised by bankers and commercial parties in more than 175 countries. Some 11-15% of international trade utilises letters of credit, totaling more than a trillion dollars (US) per annum.

Historically, the commercial parties, particularly banks, have developed the techniques and methods for handling letters of credit in international trade finance. This practice has been standardised by the ICC (International Chamber of Commerce) by publishing the UCP in 1933 and subsequently updating it throughout the years. The ICC has developed and moulded the UCP by regular revisions, the current version being the UCP500. 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, will have a commencement date of 1 July 2007.

A significant function of the ICC is the preparation and promotion of its uniform rules of practice. The ICC’s aim is to provide a codification of international practice occasionally selecting the best practice after ample debate and consideration. The ICC rules of practice are designed by bankers and merchants and not by legislatures with political and local considerations. The rules accordingly demonstrate the needs, customs and practices of business. Because the rules are incorporated voluntarily into contracts, the rules are flexible while providing a stable base for international review, including judicial scrutiny. International revision is thus facilitated permitting the incorporation of the changing practices of the commercial parties. ICC, which was established in 1919, had as its primary objective facilitating the flow of international trade at a time when nationalism and protectionism threatened the easing of world trade. It was in that spirit that the UCP were first introduced – to alleviate the confusion caused by individual countries’ promoting their own national rules on letter of credit practice. The aim was to create a set of contractual rules that would establish uniformity in practice, so that there would be less need to cope with often conflicting national regulations. The universal acceptance of the UCP by practitioners in countries with widely divergent economic and judicial systems is a testament to the rules’ success.

The latest revision of UCP is the sixth revision of the rules since they were first promulgated in 1933. It is the fruit of more than three years of work by the ICC's Commission on Banking Technique and Practice

The UCP remain the most successful set of private rules for trade ever developed. A range of individuals and groups contributed to the current revision including: the UCP Drafting Group, which waded through more than 5000 individual comments before arriving at this final text; the UCP Consulting Group, consisting of members from more than 25 countries, which served as the advisory body; the more than 400 members of the ICC Commission on Banking Technique and Practice who made pertinent suggestions for changes in the text; and 130 ICC National Committees worldwide which took an active role in consolidating comments from their members.

During the revision process, notice was taken of the considerable work that had been completed in creating the International Standard Banking Practice for the Examination of Documents under Documentary Credits (ISBP), ICC Publication 645. This publication has evolved into a necessary companion to the UCP for determining compliance of documents with the terms of letters of credit. It is the expectation of the Drafting Group and the Banking Commission that the application of the principles contained in the ISBP, including subsequent revisions thereof, will continue during the time UCP 600 is in force. At the time UCP 600 is implemented, there will be an updated version of the ISBP to bring its contents in line with the substance and style of the new rules.

The ICC Pub no 600, UCPDC 2007 Rev is now officialy published and effective 01 Jul 2007, while the Current version ie UCP 500 was 1993 rev.

The eUCP was developed as a supplement to UCP due to the strong sense at the time that banks and corporates together with the transport and insurance industries were ready to utilise electronic commerce. The hope and expectation that surrounded the development of eUCP has failed to materialise into day to day transactions and its usage has been, to put it mildly, minimal. Owing to this lack of usage, it was felt that this was not the right time to incorporate the eUCP into the UCP600 and it will remain as a supplement albeit slightly amended to identify its relationship with UCP600.

The current version of eUCP is V 1.1, Supplement for electronic presentation under UCPDC 600) effective 1.7.07

The Certified Documentary Credit Specialist is a qualification awarded by IFSA US and CIB UK and endorsed by ICC Paris as the only International qualification for Trade Finance Professionals, recognising the competence, and ensuring best practice. It requires Re-Certification every Three years. UCP 600 rules will be included from April 2008 examinations only. CDCS requires some 4-6 months of independent study and a pass in 3 hour examination of 120 multiple choice questions.

Answer 2

Uniform Customs And Practice