DC Insight

It's been an intense period for the ICC Banking Commission (see following article), with the passage of the new URBPO rules, the revised ISBP, the expansion of the Commission into regional commissions and new initiatives on compliance. As usual, at DCInsight we try to expand on the news by running features that "put some meat on the bones" of the news.

In this issue, we run a long interview with André Casterman, who co-chaired the committee drafting the URBPO rules. André is quite candid about what it will cost banks to be technologically ready to use the BPO - between EUR 10,000 and EUR 27,000 to begin with. But, he adds, "those costs can be offset by the additional fees that the banks can charge corporates as they do now on the letter of credit transactions." In other words, expensive in the short run but well worth it in the long run. André also makes a bold prediction when he claims that, by the end of the decade, "I would expect BPO use to be as widespread as that of L/Cs." We'll see. Commentators have been forecasting the increasing electronic replacement of L/Cs for some years now, and it hasn't happened yet - which is not to say it won't.

On the related question of electronic presentation of L/Cs, Sarah Younger, in our Expert commentary, says that it's just a matter of time. "In the not-too-distant future, reality will overcome conservatism," she contends.

We also run two critiques of the new ISBP revision. In one, David Meynell, while hailing the revision, expresses some regrets it was not more ambitious in covering more aspects of handling documentary credits. Kim Sindberg, who calls the revision "an invaluable tool", refutes critics who say that another revision was unnecessary. It was, he says, "in light of documents and practices that UCP 600 - as well as the related industries - have created".