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Copyright © International Chamber of Commerce (ICC). All rights reserved.
( Source of the document: ICC Digital Library )
It's hard to believe, but with this issue we begin our seventeenth year of DCInsight. We're heartened by readers' responses, especially those who tell us that DCI has become an important reference tool for documentary credit practitioners. We thank you for your loyalty and support, particularly those who've been with us since the beginning.
The world of trade finance has changed since we put out the first issue of this publication in 1995, though it must be admitted that we're still debating some of the same questions that were contentious at the time. In that first issue, for example, there was a spirited debate about whether sub-article 10 (b) of UCP 500, which introduced the phrase "giving of value", had clarified the nature of negotiation. Now, with UCP 600 more than three years old, negotiation remains a controversial subject. Over the years we've published more than a dozen articles debating it.
By contrast, in the current issue, Dan Taylor, in our "Insight interview", focuses on the changes in the world of trade. The corporates, he notes, have moved more into the open account, supply chain world. And as they have moved, the banks have been shifting, creating new products, providing information, "doing all of the things that they could do to assist their customers outside of the traditional trade channels".
At the same time, Dan recalls that, as early as 1989, the then Chair of the ICC Banking Commission predicted that the traditional credit would be gone by 1995. Asked now whether the L/C will die out completely, Dan concludes that it won't. In his words, "There is always going to be that need for an independent third party out there to make the payment, to guarantee the transaction."
Clearly, there are changes in the air. The question is whether and how soon they will replace the L/C as we know it. Past history reminds us, as one observer cautioned, that we should "never make predictions, especially about the future."
Ron Katz Editor