A while ago, this column covered the revision process of the International Chamber of Commerce's "Uniform Customs and Practice for Documentary Credits" (UCP), the rules banks use in examining documentary presentations for compliance.

The latest revisions, called UCP 600, were drafted at a May meeting of the ICC's Banking Commission. The draft touching on the issues raised at that meeting has been circulated, and each national committee has submitted its final comments. The final draft will be issued in September for final voting at the Banking Commission Oct. 25 meeting in Paris. Since the ICC has scheduled a rollout seminar for the following day, odds are that the process will go as planned.

While there are a few issues still pending, enough has been agreed on to permit a modest sneak preview.

Clearly, UCP 600 is a very thorough revision. Everything was on the table, and the only remaining articles that resemble the predecessor UCP 500 rules in effect since 1994 are those which caused few discrepancies. There is also a strong sense of getting it right the first time, and avoiding the need for explanatory position papers as happened with UCP 500.

The thrust of the revision can be summarized by Drafting Group Chairman Gary Collier: "...place the onus on the issuer to be precise in its [Letter of Credit] terms and reduce the element of interpretation that is inherent in transactions today, thereby creating a level playing field for all parties." In fact, interpretations themselves will be explained in the new rules, and covers topics such as signatures, and increases precision to such gray area terms as "on or about" "from" "to" "beginning," "middle," etc.

The new UCP 600 will have only 39 articles, down from the 49 found in UCP 500. This comes from improved drafting, and important detail has not been sacrificed.

For the first time, this UCP revision will contain definitions. For instance, the elusive term "negotiation" is pinned down to mean either lending or making a firm commitment to lend, as opposed to mere examination of documents. Other interesting terms like "honor," "banking day" and "nominated bank" are also defined.

Consistent with past practice, each transport document type will be addressed in an article of its own. Coverage is much improved, and tricky items like transshipments with different modes of transport are clearly explained.

The effective date for UCP 600 is July 1, 2007, but savvy exporters of products with lead times will want to learn these new rules early in the game. It is far easier to have letters of credit opened in acceptable form than to get them there through amendments, or worse, not get them there at all.

The text, officially titled Uniform Customs and Practice for Documentary Credits, ICC Publication 600 (ISBN 92-842-007-5, ISBN 978-92-842-1257-6), will be available from ICC Publishing USA at www.iccbooksusa.com. As we approach the release date, further information will become available from the International Chamber of Commerce at www.iccwbo.org, and its U.S. affiliate, the United States Council for International Business, www.uscib.org.

BIS Update Seminar

The annual Bureau of Industry and Security update seminar will take place in Washington Oct.16-17. Details will soon become available at www.bis.doc.gov. This event has become a "must attend" for exporters of tightly regulated products. Last year's seminar was oversold, and latecomer registrations were declined (including this writer's). The ever-increasing reach and complexity of export regulations are bound to attract even more people this year, so register early