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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
We're grateful to those readers who wrote in telling us they appreciated the new format of DCInsight with its new colours and typeface and improved graphics. This kind of feedback confirms that we were right to reinvigorate the presentation.
In our last issue, we opened the discussion about the tendency of some banks to exclude certain articles of UCP 600 in their credits. Because this remains an important matter, we've devoted considerable space in this issue to exploring it in depth.
In our Expert commentary, Nicole Keller posits an interesting theory about exclusions. In her view, the new language of UCP 600, which is clearer and more transparent than that of UCP 500, may ironically be one reason for the increased number of exclusions. She claims that the more ambiguous language of UCP 500 allowed banks to interpret the rules in the manner that suited them, whereas the UCP text, which is far more precise, exposed certain practices that are "merely clarifications of what was always part and parcel of the characteristics of documentary credits".
The dilemma of exclusions is also the theme of the two Banking Commission Opinions we publish in this issue. The first of these analyzes exclusions of no fewer than six sub-articles: 10 (c), 14 (f ), 14 (l), 16 (c) (iii) and 28 (h) and (i).
Article
But it is the lengthy interview with Gary Collyer, Chair of the UCP Drafting Group, that contains a more comprehensive critique of exclusions. Gary points out that "if you exclude a rule of the UCP, you have to put something back ... you have to insert language in the letter of credit to fill the void left by the exclusion."This reminds us of an old African proverb: "If you take from a man his tribal customs, you'd better have something of value to replace them."
Ron Katz Editor
Editor