International Chamber of Commerce-Bangladesh organized a daylong workshop on Understanding the UCP 600 for professionals on February 27 at the Bangladesh-China Friendship Conference Centre (BCFCC) in Dhaka. ICCB President Mr. Mahbubur Rahman inaugurated the workshop.

In his inaugural address, ICCB President quoted different studies which revealed that discrepancy rates were more than 50-70 per cent in all L/C presentations. And yet, the refusal rate remains tolerably low. He said that according to a recent study of documents presented under 500 L/Cs, reported in ICCs Documentary Credit Insight, Professor Ronald Mann found discrepant documents in 73 per cent of the files he examined. Surprisingly yet, despite the discrepancies, he also found that the issuers almost always paid the beneficiary’s bank. Usually the applicant waived the discrepancies. Thus the rate of dishonouring documents in the study, was almost close to zero.

This obviously had, and continues to have, a negative effect on the L/C being seen as a means of payment and, if unchecked, could have serious implications for maintaining or increasing its market share as a recognized means of settlement in international trade, Mr. Rahman mentioned.

The introduction by banks of a discrepancy fee has highlighted the importance of this issue, especially when the underlying discrepancies have been found to be dubious or unsound. Whilst the number of cases involving litigation has not grown during the lifetime of UCP 500, the introduction of the ICCs Documentary Credit Dispute Resolution Expertise Rules (DOCDEX) in October 1997 (subsequently revised in March 2002) has resulted in more than 60 cases being decided, he observed.

He also said that new UCP 600 is the culmination of over three years of extensive analysis, review, debate and compromise amongst the various members of the Drafting Group, the Expert Members of the Banking Commission and the respective ICC national committees. ICC Bangladesh, with the learned inputs from our Member-banks also sent appropriate recommendations on the Draft UCP.

The Workshop conducted by European Expert, Mr.Vincent O Brien was attended by 125 participants from banks, insurance companies, law firms, pharmaceutical companies, leasing companies, RMGs and other business houses.