DC Insight

In keeping with our tradition of presenting opposing points of view, once again, in this issue of DCInsight, we offer a special section containing reactions to the new UCP. As in our previous issue, these reactions vary widely - from the generally positive views advanced by Reinhard Längerich to the more sceptical ones reflected in articles by John Dolan and Boris Kozolchyk.

Take the question of the "Definitions" included in UCP 600 article 2. Mr Längerich finds this article to be one of the most useful in the new UCP and particularly cites the definition of "honour" as a strong step in the right direction. Mr Kozolchyk, by contrast, deems it "unsatisfactory to extract definitions from very fluid or constantly changing practices" and finds the the definition of "honour" to be misleading, since in legal and banking practice "it means simply to fulfil one's promise".

Or take UCP 600 sub-article 12(b), which authorizes a "nominated bank to prepay or purchase a draft accepted or a deferred payment undertaking incurred by that nominated bank". Reading the articles by John Dolan and Jim Barnes, both distinguished US attorneys, you will find a very different reading of that article's implications, particularly concerning the notion that the reimbursement rights of nominated banks that have committed themselves to pay are subject to fraud discovered before the payment due date. One thing is clear: sub-article 12(b), along with the new sub-articles 7(c) and 8(c), are likely to be among the most controversial in the new rules.

Now that the UCP revision has been completed, the ICC Banking Commission will turn its attention to revising another set of rules, the Uniform Rules for Demand Guarantees (URDG). In The Insight interview in this issue, Georges Affaki gives a preview of what to expect as ICC considers yet another of its trademark products.