International Standard Banking Practice

nternational Standard Banking Practice


Foreword
The publication International Standard Banking Practice for the Examination of Documents under Documentary Letters of Credit is the product of 2.5 years of work by a task force of the ICC Banking Commission. It was approved by the full Commission at its meeting in Rome in October 2002, at which time, the Commission voted to make it an official document of the ICC.
The ISBP, as it is more commonly called, is a practical complement to UCP 500, ICC's universally used rules on documentary credits. Although it does not amend the UCP, it explains, in explicit detail, how the rules are to be applied on a day-to-day basis. As such, it fills a needed gap between the general principles announced in the rules and the daily work of the documentary credit practitioner.
The task force that developed the ISBP was meticulous in seeking to document international practice in the field. It started by asking ICC national committees and members to send checklists on how documents were examined in their banks. Some 39 national committees and a substantial number of individual banks responded. Culling these comments required 14 task force meetings and four different drafts before the ISBP was finally in a shape to be approved.
The task force deserves considerable credit for having proceeded so carefully. The object of the exercise was to document international standard banking practice for the examination of documents under the UCP; it was not to report on individual country practices that may differ in some way from the norm. The UCP was created to bring uniformity to a field in which individual practices often differed, to the detriment of documentary practitioners in all countries. By using the ISBP, document checkers can bring their practices in line with those followed by their colleagues worldwide. The result should be a significant reduction in the number of documents refused for discrepancies on first presentation.