- ICC Banking Commission Passes URDG 758
- March 17, 2010
- Law Firm: Dinsmore & Shohl LLP - Cincinnati Office
At its Fall Meeting in Brussels, at the National Bank of Belgium, the International Chamber of Commerce Commission on Banking Technique and Practice voted to approve a new revision of the Uniform Rules for Demand Guarantees (ICC Publication 758). The revision is the product of more than two years of drafting and preparations.
Intended to reflect international standard practice in the use of demand guarantees, the Rules were first developed in 1991 and have not been revised since. They had gained acceptance more recently, however, as the World Bank incorporated the Rules into its guarantee forms and the United Nations Commission on International Trade Law endorsed them.
The revision is an attempt to make the Rules clearer, more precise, and more comprehensive, and is the product of consensus among bankers, users, and other members of the guarantee community. The Rules' articles have been renumbered into a more logical sequence, and the guarantor's independent role is stated more clearly in documentary terms. The relationships between the guarantor and customer or the applicant and beneficiary have been more clearly separated and defined. The Rules share some similarities with the ICC's work in letters of credit, particularly the Uniform Customs and Practice for Documentary Credits (UCP 600). The Rules will be accompanied by a set of model guarantee and counter-guarantee forms.
URDG 758 will be implemented July 1, 2010, but those who routinely are beneficiaries of or apply for demand guarantees should familiarize themselves with the Rules now, as the revision is significant in most areas.