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Now that the revision of ICC's Uniform Rules for Demand Guarantees has been approved, ICC's attention has turned to the development of two other sets of rules.

In May 2004, two officers of the International Forfaiting Association (IFA) made a presentation to the ICC Banking Commission regarding the work of the IFA and their forfaiting Guidelines for the Secondary Market. They expressed an interest in the IFA working with the ICC on the development of forfaiting rules.

Over the next four years the IFA and the ICC Banking Commission maintained contact, and additional presentations were given to both organizations about possibly working together. At the spring 2008 meeting of the Banking Commission, a project and Drafting Group were authorized. The Group is composed of ten members - five from the IFA and five from the Banking Commission, with members representing varying geographies, professions and business backgrounds.

The first set of drafting meetings were held in conjunction with the September IFA annual conference, and the second in conjunction with the ICC Banking Commission November meeting.

Substantial progress had been made on the project in a very brief time. For example, there was unanimous agreement on the mission: draft a set of rules that will gain acceptance in the both the primary and secondary markets and therefore facilitate the global growth of forfaiting financing; the name Uniform Rules for Forfaiting (URF); the drafting language (English) and writing style (similar to UCP); the use of the IFA existing publications (now three in number) as the basis for the new rules; the target audience (clients and bankers new to the business); a framework with an article structure similar to the UCP (application of the rules, opportunity for waiver or variance, definitions, interpretations, etc.); and a focus on driving to a conclusion with a set of rules that are ready for the market rather than forcing the Drafting Group to a pre-determined calendar deadline.

Some of the challenges facing the Drafting Group include focusing on keeping the writing style short and using words which easily translate both the words and concepts into other languages and business practices; maintaining an operational maintaining an operational drafting style rather than a legalistic approach; keeping the URF short enough to be useful yet comprehensive enough to cover the subject while maintaining the focus on a single set of rules covering both the primary and secondary markets (two very different markets).

Among the issues raised early in the drafting discussion was the role of representations and warranties - those given by the customer to the primary forfaiter, and whether they continue through the life of the transaction to all future holders of the transaction.

The Incoterms revision, well underway, is being developed by ICC's Commission on Commercial Law and Practice. A Drafting Group consisting of representatives from seven countries was established and met five times in 2009. Two drafts have already been submitted for comments by ICC national committees, drawing extensive comments from 25 of them. Replies will be analyzed at another meeting in Prague in March 2010, where ideally a final draft will be prepared for consideration at the May meeting of ICC's Commercial Law and Practice Commission.

A number of issues remain to be decided, but certain features can be predicted with reasonable certainty:

- The title will definitely be Incoterms 2010. Several other titles were proposed to avoid the expectation of mandatory tenyear revisions, but a decision was made to proceed with Incoterms 2010;

- There will very likely be fewer than the 13 Incoterms in Incoterms 2000; as many as three terms may be dropped, and another one added;

- New features will make Incoterms 2010 more user-friendly than previous versions;

- As mentioned in our previous report, Incoterms 2010 will be applicable to domes tic as well as international transactions; and

- The revision may well be launched in autumn 2010.

Regular updates concerning progress on both sets of rules will be published in future issues of DCInsight.