ICC to revise guidelines on L\/Cs<\/p>\n
Leony Aurora , The Jakarta Post\/Jakarta<\/p>\n
In a bid to keep standards for customs and practices in issuing
\nand using letters of credit (L\/Cs) up-to-date with current
\ndevelopments, the International Chamber of Commerce (ICC) is
\npreparing to revise the existing standards.<\/p>\n
The ICC Indonesian chapter invited the country's import and
\nexport players, including banks, on Wednesday to gather input for
\nthe new draft of the internationally recognized Uniform Customs
\nand Practice for Documentary Credits, more commonly known as the
\nUCP 500.<\/p>\n
\"The main point is for us to secure our national interests,\"
\nsaid Saul Daniel Rumeser, who represented Indonesia in the ICC
\nconsulting group. \"For example, we can try to speed up the
\nsettlement of payment,\" he added.<\/p>\n
An L\/C is issued by a bank to guarantee that its customer --
\nthe buyer, or importer -- can pay the seller, or exporter. The
\ninstrument is commonly used in trade between firms in different
\ncountries.<\/p>\n
To receive payment, the exporter must provide the product
\ndocuments listed on the L\/C, which must be checked by the issuing
\nbank. Rules and language of the L\/C are spelled out in the UCP
\n500.<\/p>\n
The UCP 500 is by itself not legally binding. However, as it
\nis included in the L\/C, it becomes part of the contract.<\/p>\n
\"Based on experience in court (when disputes occur), judges
\nrule based on the UCP,\" said JB Kendarto, managing director of
\nBank Mandiri, which hosted the meeting.<\/p>\n
The ICC will welcome input for the draft until the end of this
\nweek. Comments and suggestions, however, can only be admitted via
\nthe country's national committee.<\/p>\n
The practices on L\/Cs were first standardized by ICC in 1933
\nand have been revised every 10 to 15 years. The last revision was
\nin 1993. The current draft, which will be called UCP 600, is
\nexpected to be finalized by the end of next year.<\/p>",
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