by Bob Ronai

The ICC took a brave leap forward in 2002 with the publication of ISBP 645. While UCP 500 in 1993 introduced the concept of documents being examined in accordance with international standard banking practice, there was no definition of what exactly this meant. The introduction of a publication with the same title, capitalized of course, gave documentary credit practitioners useful guidance for the first time. It removed lots of bad or nonsensical practices which existed because of the fear of the unknown - unknown as in how would the issuing bank treat the particular matter.

The first ISBP followed the ICC's 1999 policy paper, "The determination of an 'Original' document in the context of UCP 500 sub-article 20 (b)", which did the documentary credit world the great benefit of doing away with the belief that an original document needed to be stamped "original". How many of us until then had three stamps on our desk, one each of "original", "duplicate" and "copy"?

ISBP 645

ISBP 645 introduced to documentary credit practitioners concepts regarding corrections and alterations, typographical errors, dating of certificates, naming of documents and much more. I remember saying in training courses until then that if a credit called for a "Commerical Invice" you titled your invoice as "Commerical Invice"; that's just the way it was.

However, the ISBP introduction at the time was somewhat misunderstood. Many bankers initially held the belief that ISBP 645 somehow overruled UCP 500, and others believed that its use was voluntary. ICC, by referencing ISBP 645 in many of its Banking Commission opinions, soon gave credence to the new publication and showed it was indeed an integral part of the armoury to determine compliance of presentations under documentary credits.

ISBP 681

With UCP 500 being replaced by UCP 600, ISBP 645 was, in turn, by ISBP 681. However, ICC chose not to use that as an opportunity to review the first version, just to update its relevance to the new rules.

Meanwhile, every six months the Banking Commission was issuing its opinions on various disputes also related to the operations of documentary credits.

The current ISBP 745 was some three years in the making, has been expanded considerably over its predecessor and brings a welcome greater clarity and understanding to the operations of documentary credits.

Initially, the UCP and then the ISBP publications were almost exclusively held in the banking domain. The vast majority of exporters and importers either didn't know of their existence or believed them to be the banks' own secretive rules. I remember visiting an experienced exporter and in discussions telling him that a particular documentary credit was not workable. He looked at me and told me in all seriousness that his bank made up the rules. So I asked if he had (at that time) UCP 500 and ISBP 645. Amazingly, he grabbed his packing list for the shipment, frantically looking for those part numbers.


In the years since the introduction of ISBP, the world has seen another revolution, that of the introduction of social media via the Internet. In the international trade world, there is one site of importance, and that is LinkedIn. There are now several groups in LinkedIn dedicated to discussing questions about documentary credits. The largest of these has almost 12,000 members and is growing daily, with probably most members of the smaller groups also belonging to the larger groups.

Amongst these groups there are interesting new questions posted almost daily. Many of these are answered by referring to UCP 600 or ISBP 745. Many also concern interpretations of certain items in these publications, and a number of these can be robust. But the point is there is interaction daily amongst knowledgeable and not-so-knowledgeable contributors. No longer are discussions restricted to a small group of "experts" meeting infrequently, or to one person's book on the topic. These discussions are also open to, and viewed by, the very people for whom documentary credits are a vital tool of international trade, the exporters and importers.

Future directions

This revolution needs to be kept moving, acknowledging that documentary credits are not just the plaything of bankers, but an integral part of the financial management of international trade between sellers and buyers.

Every banker involved in documentary credits needs to have both UCP 600 and ISBP 745 on his/her desk. But even more so, every applicant and beneficiary needs to have access to the same information. It's no longer acceptable for a beneficiary to believe that his/her bank makes up the rules as to whether his documents are compliant or not. It is no longer acceptable that an applicant is told by his/her bank that certain clauses are inserted because it is that bank's "procedure" without any further foundation.

But there is still a biannual set of interpretations of the rules missing from the equation, the ICC Banking Commission opinions. The opinions are not immediately available to every bank when they are issued, only to the various countries' ICC national committees. I venture to suggest that even today the majority of bank document examiners are not kept up to date about these opinions.

I believe that in the past it has been suggested that practitioners would not be able to cope with frequently updated changes in these interpretations of the rules, but if that were the case, what then is the point of publishing the opinions every six months? The world has changed; we are constantly bombarded with new information. We have to keep up to be relevant.

Regular updates

I am now going to suggest something revolutionary, acknowledging that ICC itself, as well as its national committees, need sales of publications as one of their major income streams. But it is also true that in lesser-developed countries, the cost of a publication like ISBP 745 can exceed the weekly salary of a bank employee. It is surely time to rethink the model for disseminating ISBP and the opinions, to ensure they are distributed to the widest possible audience and regularly kept up to date. Is the paper-based publication of ISBP nearing the end of its usefulness?

Can we use the software industry as a model for a new ISBP/opinion paradigm, i.e., ISBP version 1, updated with an appendix of the next round of opinions as ISBP version 1.1, then the next lot after that as version 1.2, etc.? Each two or three years a committee could be charged with incorporating the relevant opinions directly into the text so that it becomes ISBP version 2.0, with the process repeating itself.

Concurrent with this might be a constant review, involving the national committees, of industry practices in the trading world, transport, insurance and so on to consider amending existing international standard banking practices and incorporating new practices into the ISBP to become a new publication. ICC has called for contributions from national committees on how the rule-making process could be accelerated; my suggestion expands this to think about how the rules themselves can be made available, easily and at a reasonable cost, to reach the maximum number of users.

Currently, a great majority of practitioners in the documentary credit world do not have ready access to the rules or associated publications. I believe this is a major reason why so many credits contain confusing and erroneous requirements and why so many beneficiaries present discrepant documents. My suggested electronic method would revolutionize the delivery of the ISBP/opinions to the widest possible audience, cementing ICC's role as the rule-maker for documentary credits and removing the conundrum of having so many publications with so few reading them.


ICC already publishes electronically, take for example this publication, DCInsight, available as a secure e-book. Such an ISBP e-book should be priced at a reasonable amount, because there would no longer be the need for ICC to incur costs of printing the paper-based version, which brings with it storage and handling costs. The pricing model would need to include volume discounts to encourage banks to purchase a download for each person processing documentary credits. National committees would be given the opportunity to promote subscriptions, just as they now promote the sales of hard copies. Their costs, though, would be greatly reduced with no need to invest up front in quantities of stock plus international postage or freight, no need for storage and handling at all. They could just pass the subscription details on to ICC Paris, retaining a commission.

I believe that if the price is kept to a sensible and attractive level, with free updates until the next version is published, sales of the ISBP would skyrocket, meaning that for far less work and costs, each national committee and ICC itself would profit handsomely.

This would give a new lease on lif e to the documentary credit, help to alleviate the fear so many beneficiaries have about them and ensure continuation of the revenue stream for banks and national committees. While there is a lot of emphasis r ight now on the new technology of BPOs, there is no reason why the practitioners of documentary credits cannot benefit from similar technologies.

It's a brave new and ever-changing world out there. Let's ensure that documentary credit rule-making keeps up with the changes!

Bob Ronai CDCS is the owner of Import-export Services Pty Ltd, an export document service in Sydney, Australia. He also manages the Trade Finance group and the Incoterms group in LinkedIn. He can be contacted at