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ICC Releases Technical Advisory Briefing No. 1

02/02/2022

For many years, the ICC Banking Commission has issued official opinions, DOCDEX decisions, and decisions and guidance papers on a range of topics. These have provided invaluable information and direction to documentary credit practitioners globally.

Due to the need to obtain agreement of ICC National Committees to any proposed text, this can be a long drawn out process.

To hasten the delivery of guidance on topical matters, and at an educational level, the ICC Banking Commission has commenced the process of issuing what will be known as ‘Briefing Notes’ that are designed, and stated to be, for educational purposes only. These briefing notes are developed by the Technical Advisory team with input from a core group made up of representatives from ICC National Committees.

The first of the briefing notes is on the subject of ‘non-documentary conditions under the UCP 600’ and can be downloaded here

The next three in the series have already been determined and are ‘without delay’, ‘reducing discrepancy rates’ and ‘lost documents’.

All further briefing notes will be made available on this website as they are released. The next one is scheduled for March 2022.

Members will be able to locate all the briefing notes in a dedicated section under the topic ‘ICC Banking Commission Documents’.


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Latest Question

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.