October 8, 2015

October 08, 2015

October 07, 2015

October 06, 2015

October 05, 2015

ICC Banking Commission Passes URDG 758

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. Please visit the ICC Bookstore to obtain a set of the Rules (available in March 2010).

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About this Author

Jacob Manning, Business transactions lawyer, Dinsmore Shohl law firm

Jacob Manning advises businesses and individuals in a variety of business transactions, both domestic and cross-border. He drafts and reviews contracts, particularly those involving sales of goods, distributorships and licensing, and construction, vendor and service contracts on behalf of boards of education and other public entities. When clients are negotiating a contract, Jacob also provides advice about payment, including guarantees and letters of credit. Should a dispute arise, he represents clients both before US courts and in arbitration subject to international...