Article

by Ron Katz

From 10-12 March, the ICC Banking Commission held several days of meetings in Dubai, the first time the Commission had met in that country.

The number of attendees, more than 300, was impressive, one that had both positive and negative consequences. On the plus side, the Commission officers were pleased to see the surging interest in the Commission's work, this coming at a time when many are questioning the future role of L/Cs and guarantees. On the negative side, as the Commission's policy manager, Thierry Sénéchal points out (see the "Insight interview" in this issue), once the numbers become this large it is difficult to organize meetings and have effective discussion.

Several hours of the meeting were consumed in discussing the third draft of the revised Uniform Rules on Demand Guarantees (URDG). The comments received during the Dubai meeting and other national committee comments were taken into account in producing a fourth draft, comprehensively described by the Task Force chair, Georges Affaki, in an article in this DCInsight. After the extensive review, Dr Affaki expressed the hope that the rules were now entering the lock-down stage and that they could be approved at the November Commission meeting. Much will depend on reactions to the draft by the Commission on Commercial Law and Practice (CLP), a partner in developing the rules.

The Dubai meeting was also noteworthy for showcasing some of the Commission's expanding list of projects. The Commission gave the go-ahead for a new Task Force on Forfaiting, one that its Chair, Donald Smith, said would have a goal, though not a target, to produce a new set of rules on forfaiting within two years. The project will be a joint one between the Commission and the International Forfaiting Association (IFA).

The Commission also heard a presentation by the chair of Task Force on Anti-Money Laundering, Neil Chantry, who noted that his group was working on a couple of projects, one to look at sanctions clauses that regulators impose on banks and the other to study the typologies that the Financial Action Task Force (FATF) uses in developing its suggestions on fighting money laundering.

Turning to L/Cs, there were two developments of note. The first concerned the DOCDEX process for hearing disputes under L/Cs and guarantees. The Commission, after several years, has been updating its list of DOCDEX experts. At present, ICC national committees have nominated some 126 DOCDEX experts from 35 countries. Since the Commission meeting of October 2008, the number of DOCDEX cases has substantially increased, with 11 cases being decided in the six months from October to April and another three still being decided. Of the 11 cases, one was a collections case in which the experts found that the collecting bank acted incorrectly in disposing of documents without payment. All of the other cases involved L/Cs and specifically disputes concerning an issuing bank and revolving around the issuing bank and the beneficiary. In every single case, the experts found that the issuing bank was wrong and ruled against it.

Finally, though it has not yet been decided, the Commission may well come out with a document concerning on board notations. Because of the large number of queries and comments that focus on this subject, such a paper would likely cover all of the occasions under which an on board notation would be required for UCP 600 articles 19, 20, 21 and 22. The Commission's Technical Adviser, Gary Collyer, remarked that such a document could be a valuable tool for all document examiners, who would have something to help them in the form of a matrix to determine when they would need an on board notation with a port of loading, with the name of the vessel and/or just with a dated on board notation. Such a document could be ready by the time the Commission next meets in November.

The Commission's schedule includes a meeting in Brussels in November and meetings in Beijing and in Orlando, Florida, next year.