The following article was printed in DCInsight Volume 9 number 4 - October - December 2003.

Source: DCInsight Published monthly by ICCBOOKS.COM

DCInsight is the voice of the International Chamber of Commerce on letters of credit. The ICC, which over 70 years ago created the UCP - its universally used rules on letters of credit, has in DCInsight, a quarterly magazine which brings the views of its L/C experts to readers in more than 100 countries. With a new UCP revision now on the way, practitioners need DCInsight to get ready for the new rules.

Reports from Chinese and Indian correspondents

DCInsight: Volume 9  No 4 October - December 2003

India

 

I welcome the ISBP for a number of reasons:

• UCP 500 says what is what, while ISBP indicates how to do what, what is right, what is acceptable, i.e., what will avoid a discrepancy. In short, ISBP is helpful for developing UCP knowledge management skills.
   
• ISBP will facilitate controversy-free document examination by bankers and thus facilitate dispute-free payment to the exporter.
  
• UCP 500 says that one must refer to international standard banking practice for document examination, while the ISBP exemplifies international standard banking practice.
   
• The ISBP will mitigate the problem of overdue export payments that exporters and their countries face in L/C-based international trade, since it encourages prompt payment by facilitating correct document examination procedures.
   
• ISBP will reduce rejections and minimize legal disputes in the documentary credit world and thus enhance export earnings and foreign exchange.
   
• The ISBP as a checklist is helpful, not only to the documentary credit banker for compliance examination, but also to the exporter for compliance management (compliance preparation and pre-presentation compliance review) and payment dispute management (asserting compliance in case of rejection). As such, the ISBP will not only improve only bankers' skills, but also traders' skills in L/C matters. That is, the ISBP may also improve TDP - trade documentation practice.
  
• The ISBP will enhance the consumer's trust in documentary credits and in the UCP rules governing them.
  
  

For all these reasons, this new Banking Commission document is an invaluable resource for professionals in a range of different sectors.

Ravi Mehta

Associate Trade Finance Editor, The EXPORTER (New York)