As a consultant, our experience teaches us that a minor mistake may kill the only opportunity for our customers/clients.
A PRESENTATION STYLE MISSED BY MOST PRACTITIONERS
So we always wonder which is the right way to present ISP 98, with a space between the alphabets and the numerals, like all other ICC Rules do, such as UCP 500, URR 525, URC 522, Incoterms 2000, so on and so forth. Or we should use the USA style, ISP98.
Allow us to apply logic and take the step-by-step approach here again. To determine which style is the right one to use, we have to do some analysis.
EVOLUTION OF ISP 98
ISP 98 originates from IIBLP in USA and later jointed by experts mainly from Europe led by Gary Collyer. We heard that at one time there is a copyright problem, which we heard is finally resolved, between IIBLP and ICC. We do not know and need not know the full details, as it may be a commercial secret.
Before we can determine who owns the ISP 98, it is difficult to make determination for its presentation style.
BYSTANDERS PLEASE STEP FORWARD TO SHOW YOUR CONCERNS OVER DC PRO AND ISP
We understand that a lot of experts from USA and Europe are watching this Discussion Forum as bystanders rather than involvers. Would they please step forward and share some of their experiences and thoughts with us here?
However, for consistency with other ICC Rules, of which the ISP is one, we suggest ISP 98.
www.tolee.com.
[edited 7/3/02 4:31:42 PM]
How should we present ISP 98?
How should we present ISP 98?
I would observe that 'The Official Commentary on the International Standby Practices' published by IIBLP and the preface, prologue and front cover of ICC publication 590 refer to 'ISP98'.
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DimitriScoufaridis
- Posts: 85
- Joined: Fri Apr 05, 2019 5:17 pm
How should we present ISP 98?
The copies we have on hand show ISP98 but I think what is more important is not the presentation. It is the acceptance and applicability of ISP98. In Saudi, we have very rarely seen standbys subject to ISP98. Customers and some fellow bankers have the feeling that these rules are rather meant for lawyers and that some articles seem to be either confusing or contradictory, e.g. under rule 4.04 “The language of all documents issued by the beneficiary is to be that of the standby” & 3.11(b)(ii) “…an issuer may, at its sole discretion, without notice to or consent of the applicant…waive the requirement that a document issued by the beneficiary be in the language of the standby”. Similarly Rule 4.06 “The issuance date of a required document may be earlier but not later that the date of its presentation”. However, under rule 3.11(b)(i) the issuer may waive this requirement. We may agree or disagree with this view but the fact is that ISP98 usage in the country we operate continues to be very limited.
Dimitri
Dimitri
How should we present ISP 98?
Dimitri,
The following examples given by you are not inconsistent or contractor Articles.
QUOTE
e.g. under rule 4.04 “The language of all documents issued by the beneficiary is to be that of the standby” & 3.11(b)(ii) “…an issuer may, at its sole discretion, without notice to or consent of the applicant…waive the requirement that a document issued by the beneficiary be in the language of the standby”. Similarly Rule 4.06 “The issuance date of a required document may be earlier but not later that the date of its presentation”. However, under rule 3.11(b)(i) the issuer may waive this requirement.
UNQUOTE
BIFURCATED STANDARD
These quoted Articles may be based on a special feature of the DC banking practice called "bifurcated standard" on documentary compliance. There are reasons for such seemingly inconsistent and contradictory approaches. From the perspective of the beneficiary, such practice has its own merits. It makes the DCs and SBLsC more reasonable, welcome and secured for payment.
On the other hand, we also have to realise that the UCP and ISP of the bankers are written by the bankers for the bankers.
In Chinese, we have a common saying that "A government official (those who make the law or those who are in power) has two mouths". That means they may say “Yes” and “No” to exactly the same application to different parties or at different times. Some governments’ foreign and/or trade policies are also bifurcated.
We would like to stop right here and pass the ball to Jeremy so that he may exhibit his legal knowledge with his postings.
www.tolee.com
[edited 7/3/02 10:00:07 PM]
The following examples given by you are not inconsistent or contractor Articles.
QUOTE
e.g. under rule 4.04 “The language of all documents issued by the beneficiary is to be that of the standby” & 3.11(b)(ii) “…an issuer may, at its sole discretion, without notice to or consent of the applicant…waive the requirement that a document issued by the beneficiary be in the language of the standby”. Similarly Rule 4.06 “The issuance date of a required document may be earlier but not later that the date of its presentation”. However, under rule 3.11(b)(i) the issuer may waive this requirement.
UNQUOTE
BIFURCATED STANDARD
These quoted Articles may be based on a special feature of the DC banking practice called "bifurcated standard" on documentary compliance. There are reasons for such seemingly inconsistent and contradictory approaches. From the perspective of the beneficiary, such practice has its own merits. It makes the DCs and SBLsC more reasonable, welcome and secured for payment.
On the other hand, we also have to realise that the UCP and ISP of the bankers are written by the bankers for the bankers.
In Chinese, we have a common saying that "A government official (those who make the law or those who are in power) has two mouths". That means they may say “Yes” and “No” to exactly the same application to different parties or at different times. Some governments’ foreign and/or trade policies are also bifurcated.
We would like to stop right here and pass the ball to Jeremy so that he may exhibit his legal knowledge with his postings.
www.tolee.com
[edited 7/3/02 10:00:07 PM]
How should we present ISP 98?
I’m afraid I will have to kick T.O.’s pass into touch as ‘bifurcated standard’ is not a term with which I am familiar. However, I certainly do not see any contradiction in stipulating a presentation must meet certain requirements, but allowing the issuer to waive them at its sole discretion. If this is unacceptable to the applicant then they can simply modify the provisions of ISP98 in the agreement with the issuer.
As to the use of ISP98, while it may still be limited, I believe it is growing and I see ISP98 gaining market acceptance far more quickly than URDG. As a standby issuer, I find ISP98 infinitely superior to UCP500 and when ever I draft standby texts I make them subject to ISP98 and not UCP500. I also believe ISP98 avoids many of the problems of URDG.
Jeremy
As to the use of ISP98, while it may still be limited, I believe it is growing and I see ISP98 gaining market acceptance far more quickly than URDG. As a standby issuer, I find ISP98 infinitely superior to UCP500 and when ever I draft standby texts I make them subject to ISP98 and not UCP500. I also believe ISP98 avoids many of the problems of URDG.
Jeremy
How should we present ISP 98?
Jeremy
In your last posting, you said:
“I’m afraid I will have to kick T.O.’s pass into touch as ‘bifurcated standard’ is not a term with which I am familiar.”
which we do not quite understand what you are trying to say precisely.
Hence before we response to your above bewildering statement, we have to get your clarification first, to be fair to you.
Are you saying that (i) you have never heard of this term “bifurcated standard” or (ii) you are not clear what it means or (iii) both?
www.tolee.com
[edited 7/8/02 3:47:25 PM]
In your last posting, you said:
“I’m afraid I will have to kick T.O.’s pass into touch as ‘bifurcated standard’ is not a term with which I am familiar.”
which we do not quite understand what you are trying to say precisely.
Hence before we response to your above bewildering statement, we have to get your clarification first, to be fair to you.
Are you saying that (i) you have never heard of this term “bifurcated standard” or (ii) you are not clear what it means or (iii) both?
www.tolee.com
[edited 7/8/02 3:47:25 PM]
How should we present ISP 98?
T.O.,
I'm sorry you're bewildered. As I'm not familiar with the term the answer is necessarily 'both'.
Jeremy
I'm sorry you're bewildered. As I'm not familiar with the term the answer is necessarily 'both'.
Jeremy
How should we present ISP 98?
Jeremy,
You have surprised us that you are not clear about the term “bifurcated standard”. We respect you more for your frankness and courage. Now may we call upon Laurence who has used this term to elaborate on this terms a bit, a good practice we learn from Rivaldo, purposely passing the ball to Ronaldo to make the second goal in the final with Germany.
www.tolee.com
[edited 7/9/02 5:21:49 PM]
You have surprised us that you are not clear about the term “bifurcated standard”. We respect you more for your frankness and courage. Now may we call upon Laurence who has used this term to elaborate on this terms a bit, a good practice we learn from Rivaldo, purposely passing the ball to Ronaldo to make the second goal in the final with Germany.
www.tolee.com
[edited 7/9/02 5:21:49 PM]
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
How should we present ISP 98?
T.O.,
I, too am unaware of a "bifurcated standard". Is this a published standard or are you referring to what we in this part of the globe might refer to as "operating dual standards" ?
Laurence
I, too am unaware of a "bifurcated standard". Is this a published standard or are you referring to what we in this part of the globe might refer to as "operating dual standards" ?
Laurence