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Two new sets of ICC rules approved

The April meeting of the ICC Banking Commission meeting in Lisbon, originally expected to receive around 300 participants, ended up with 450. This was one of the largest, if not the largest meeting the Commission has ever held.

A number of important items were on the agenda, but the most important was the roll call vote on two new sets of ICC rules (documents), the first time that two such votes were taken in a single meeting. The first, the Uniform Rules for the Bank Payment Obligation, known as URBPO. Developed over a year and a half by a Drafting Group composed of ICC members and representatives of SWIFT, the URBPO are rules aimed at facilitating trade transactions based on a simple exchange of data between two parties, which will eliminate the need for paper documents to support these transactions. The rules are of such importance that this issue of Insight devoted an entire special section to them. At last count, some 50 banks had signed up to use the BPO, and the number is growing weekly.

The vote on the BPO was unanimous, with 82 votes for and none against. Some 65% of ICC national committees cast votes, either in person or by e-mail. Gary Collyer, one of the two co-chairs of the Drafting Group, termed the short time span for drafting and approving the rules an impressive accomplishment, considering that when the drafting process started, members only had a blank sheet of paper.

The second document, the revised ISBP, took far longer to draft and be approved -- more than three years. This was the result of members' only meeting a limited number of times a year to discuss the multitude of suggestions/amendments proposed by national committees. The revision incorporates considerably more detail than the former ISBP 685. and also includes provisions on several types of documents not included in past versions of the ISBP.

The vote on the ISBP was not unanimous, but it was not close, with 87 votes for and one vote (Singapore) against. To reduce the time required to draft and approve revisions and the drafting of new rules, the Commission is also discussing a possible fast-track process for the future. This may include procedures for amending rules more frequently than every ten years or so.

With these two votes behind it, the Commission can turn to other matters, including a revision of the DOCDEX rules, which may be voted on by year's end. But as impressive as these votes were, there were some difficulties pointed out by the chairs of the drafting groups. One was the absence of a number of national committees from the drafting process. On the ISBP vote, for example, only 35 of the ICC's 95 national committees submitted comments. In other words, some 2/3 of the national committees did not participate in the process, even though some of them did cast final votes on the rules.

This calls to mind another key initiative set in motion by the Banking Commission -- the establishment of regional Banking Commission (RBCs) to bring the Commission's work closer to practitioners on the ground. The first of the RBCs has been set up in Dubai and administered by the Dubai Chamber of Commerce. Its mandate is to cooperate with national committees in the region and to advise them on developments which may have an impact on their members. The Dubai-based RBC will cover a range of countries in the Middle East and Africa. Its initial meeting drew more than 150 participants from 20 countries.

It's important to note that the RBCs will not take the place of national committees. It is still the latter that will be charged with casting votes on rules and other important matters. The relationship between the two is to be complementary, not competitive.

Among other matters discussed in Lisbon was the emergence of the Chinese renmimbi as a major trading currency. Ashutosh Kumar, the Global Head of Trade and Working Capital at Standard Chartered Bank, pointed out that trade transactions using renmimbi, even between parties not based in China, has been growing at an exponential rate.

One surprising fact revealed at Lisbon: Ricardo Salgado, the Chair of Portugal's Banco Espirito Santo, noted that even though Portugal is a small country, taking account of the countries speaking Portugese in Africa and South America, some 256 million people worldwide speak the language. Who would have thought it?

The URBPO rules and the revised ISBP will be available from www.iccbooks.com