Not reaching perfection is not a shame ; but no trying to do it, is. This is much probably also the philosophy of everybody giving some contribution to the new UCP rules. So ICC has decided that new rules would be created and we have to live with even if I had preferred keeping the UCP 500, making some addings or position paper. Rules are not like a score which is played exactly in the same manner by everybody. Rules depend of the interpretetion of the reader. As far as art. 13c is concerned I would very much appreciate if same would be removed in the new version, extending this thinking also to art. 21. Both articles in fact clarify the banks liabilities and responsibilities but can not be applied literally in the practice. What does mean "will deem such conditions as not stated and will disregard them" and "accept such document as presented". Again the handling of L/C depends from banker to banker. Even if said articles release the bank from any responsibility a prepared documentarist would seek for a better solution in order to avoid miunderstanding or problems on utilisation giving also satisfaction of his customer should an L/C be received with such conditions.
So again, I do sincerely hope that such articles will not appear anymore in UCP rules
Roland
UCP600
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RolandLeupi
- Posts: 115
- Joined: Fri Apr 05, 2019 5:26 pm
UCP600
Kim,
Thanks for responding.
Taking your last point first, if the proposed UCP600 were actually to cover comprehensively those matters not currently covered by UCP500 that are of importance and covered in ISBP, opinions etc. then I agree this would be an advantage. As to my supposed ‘deep knowledge and full overview’ it is only in the last week that I have learned of Opinions R258 & 351, which have come as bit of a shock to me. A comprehensive (and clear) UCP would avoid these potential gaps in the knowledge of all those involved in documentary credit operations. That the ICC should intend to publish a new ISBP when all the matters addressed in the current ISBP could be so easily be covered in the new UCP is, in my opinion, a complete disgrace (as I assume we will have to pay for them).
As to your first point, with respect to non-documentary conditions, so we are going to ignore latest shipment dates under UCP600 are we (if sub-Art 13c is carried forward)? The suggestion that essentially same words can have a completely different meaning from one UCP to another seems to me to be wholly untenable and completely absurd (with the greatest respect!). Incidentally, I get the impression that the pitfalls of the current sub-Art 13c are not widely understood by bank employees working in this field and that this has not helped with regard to a UCP revision.
Roland,
Thanks for your contribution too. I share your concerns.
In conclusion, I have to say that unless things dramatically improve at the last minute this latest revision of the UCP seems to me to have been a profoundly flawed exercise that will seriously ill serve the documentary credit world.
Jeremy
[edited 7/13/2006 12:25:41 PM]
Thanks for responding.
Taking your last point first, if the proposed UCP600 were actually to cover comprehensively those matters not currently covered by UCP500 that are of importance and covered in ISBP, opinions etc. then I agree this would be an advantage. As to my supposed ‘deep knowledge and full overview’ it is only in the last week that I have learned of Opinions R258 & 351, which have come as bit of a shock to me. A comprehensive (and clear) UCP would avoid these potential gaps in the knowledge of all those involved in documentary credit operations. That the ICC should intend to publish a new ISBP when all the matters addressed in the current ISBP could be so easily be covered in the new UCP is, in my opinion, a complete disgrace (as I assume we will have to pay for them).
As to your first point, with respect to non-documentary conditions, so we are going to ignore latest shipment dates under UCP600 are we (if sub-Art 13c is carried forward)? The suggestion that essentially same words can have a completely different meaning from one UCP to another seems to me to be wholly untenable and completely absurd (with the greatest respect!). Incidentally, I get the impression that the pitfalls of the current sub-Art 13c are not widely understood by bank employees working in this field and that this has not helped with regard to a UCP revision.
Roland,
Thanks for your contribution too. I share your concerns.
In conclusion, I have to say that unless things dramatically improve at the last minute this latest revision of the UCP seems to me to have been a profoundly flawed exercise that will seriously ill serve the documentary credit world.
Jeremy
[edited 7/13/2006 12:25:41 PM]
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
UCP600
Deres Jeremy,
On one hand I have decided not take your sceptical view (Which I guess you would call realistic
On the other hand your arguments and examples no doubt speak for themselves.
There are surely many issues regarding this revision, that I personally would have liked to be different – but it seems that the process is coming to an end – and that it will eventually be accepted in October – and from that perspective I will do my utmost to get the best out of it – both for my bank and for the LC users.
That being said, these rules contain many potential risks and pitfalls and it is surely for the ICC BC to act swiftly and clearly each and every time disputes arises based on different “interpretations” of the rules.
At the same time it is for us bankers to try to understand and follow the “intention” of the articles – and perhaps most important to make the LCs as error free and unambiguous as ever possible (as this seems to me to be the biggest source of problems related to dealing with LCs).
Best regards
Kim
On one hand I have decided not take your sceptical view (Which I guess you would call realistic
On the other hand your arguments and examples no doubt speak for themselves. There are surely many issues regarding this revision, that I personally would have liked to be different – but it seems that the process is coming to an end – and that it will eventually be accepted in October – and from that perspective I will do my utmost to get the best out of it – both for my bank and for the LC users.
That being said, these rules contain many potential risks and pitfalls and it is surely for the ICC BC to act swiftly and clearly each and every time disputes arises based on different “interpretations” of the rules.
At the same time it is for us bankers to try to understand and follow the “intention” of the articles – and perhaps most important to make the LCs as error free and unambiguous as ever possible (as this seems to me to be the biggest source of problems related to dealing with LCs).
Best regards
Kim
UCP600
Kim,
I really think you hit the nail on the head when you state that it more important for bankers to make LCs as error-free and unambiguous as possible. I am constantly amazed at the garbage LCs I see where if the person who issued it actually took a moment to think about how the documents would look and how the document flow would work, the LC might actually be workable. However, I am not completely blaming the people who issue. Downsizing and the retirement of knowledgeable people has left a "brain drain" in our business as well as increased workload for the people who are left. Yes, the CDCS numbers are up, but I still have my doubts that passing a test is an adequate indication that the person is knowledgeable about actual trade practice. I think this reality has contributed to a decline in the LC product, which is a shame. LCs are my life. I am an LC geek and proud of it.
Lisa
I really think you hit the nail on the head when you state that it more important for bankers to make LCs as error-free and unambiguous as possible. I am constantly amazed at the garbage LCs I see where if the person who issued it actually took a moment to think about how the documents would look and how the document flow would work, the LC might actually be workable. However, I am not completely blaming the people who issue. Downsizing and the retirement of knowledgeable people has left a "brain drain" in our business as well as increased workload for the people who are left. Yes, the CDCS numbers are up, but I still have my doubts that passing a test is an adequate indication that the person is knowledgeable about actual trade practice. I think this reality has contributed to a decline in the LC product, which is a shame. LCs are my life. I am an LC geek and proud of it.
Lisa
UCP600
‘LC geek and proud of it.’ Ooer! However, I do agree with what you are saying Lisa. Nonetheless, it seems to me the documentary credit is a mid-20th century instrument whose time should’ve come a decade or two ago. It’s just that the technological challenges to the whole process being electronic have proved to be too great to overcome. Its relative decline would have come anyway I think and I would have thought that at least those responsible for operational risk in banks should welcome this.
On the subject of operational risk, will UCP600 make documentary credit operations any less ‘error free and unambiguous’ than they are currently? If not, what’s the point?
[edited 7/20/2006 10:01:50 AM]
On the subject of operational risk, will UCP600 make documentary credit operations any less ‘error free and unambiguous’ than they are currently? If not, what’s the point?
[edited 7/20/2006 10:01:50 AM]