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ICC issue paper regarding the roll-out and commercialisation of ICC digital rules

28/05/2019

On 6 June 2017, the ICC Banking Commission provided a press release announcing the launch of a Working Group to anticipate and accompany the digitalisation of trade finance. One core activity was to evaluate existing ICC rules in order to assess e-compatibility and ensure they are ‘e-compliant’, i.e. enabling banks to accept data vs. documents. It was identified that this was required in order to accommodate evolving practices and technologies. 

A Drafting Group was established, co-chaired by David Meynell and Gary Collyer, with the initial aim of reviewing the e-compatibility of existing ICC rules. As a result of this review, a mandate was received from the ICC Banking Commission Executive Committee to:

Update the existing version 1.1 of eUCP in order to ensure continued digital compatibility; and

Draft eURC in order to ensure continued digital compatibility for presentation of electronic records under Collections.

After a 16-month long drafting and revision process, both sets of rules were approved with 100% (eUCP) and 97.5% (eURC) by ICC Banking Commission members and National Committees through ICC’s first-ever e-voting. 

The eRules have been intentionally developed with version numbers so they can be updated regularly without impacting upon other existing ICC rules, thereby reducing the time required to develop any potential identified revision. The new e-rules will come into force on 1 July 2019. 

ICC will make the eUCP and eURC rules available for download, free of charge, on its website prior to 1 July 2019.

Moreover, the UCP 600 and URC 522 publications will be amended with new eUCP version 2.0, and eURC version 1.0, respectively and will be available for sale by the ICC Store shortly.  

Furthermore, on 5 December 2018, the ICC Banking Commission Executive Committee approved a proposal for the drafting of a new set of rules with the working title “Uniform Rules for Digital Trade”. The provisional intention is to have the first draft available to ICC National Committees before the October 2019 Banking Commission Technical Meeting in Paris. An update on progress and outline of next steps will be given during the Paris meeting. 

With regard to the URBPO, the rules are unaffected by the SWIFT decision to shut down the TSU. Other industry solutions are being looked into for TSU replacement.  

The ICC has issued a paper outlining the current status of its rules in the digital environment. Details can be found in the following file Commercialisation of ICC Digital Rules.pdf

 


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We, as the issuing bank, requested the below document, under field 46A. “Insurance policy/certificate for 10.00 percent above CIF value payable to the order of Sampath bank PLC, covering institute cargo clauses (a), institute war clauses (cargo), institute strike clauses (cargo), transshipment risks marked premium paid claims payable in Colombo irrespective of percentage.” Insurance certificate is presented containing below wording on the face side of the document. “The settlement of loss and damage will be effected, unless otherwise provided, through the intermediary of Marsh SA/NV to whom all documents are to be forwarded for this purpose, and will collect the indemnity under deduction of a commission of one percent” Also, it indicates the LC conditions as a mirror image as follows under the heading of "letter of credit conditions" whereas insurance conditions are incorporated separately in the certificate: "covering institute cargo clauses (A), institute war clauses (cargo), institute strike clauses (cargo), transshipment risks marked premium paid claims payable in Colombo irrespective of percentage" Having considered the above clauses, we have quoted below discrepancies. 1) Insurance policy indicates a deductible of 1 pct instead of irrespective of percentage. 2) Insurance not marked premium paid Beneficiary’s bank disagrees with our discrepancy and raised below argument: “Insurance policy/certificate does not indicate a deductible of 1 pct irrespective of percentage on the face of the document and banks will not examine terms and condition in insurance document as per ISBP paragraph K22 and marked as premium paid under the LC conditions. Considering above, may we have your opinion on the discrepancy quoted by us and the counter argument raised by the beneficiary’s bank.