Banking plays an undeniable role in making trade work for all, allowing even small businesses to take risks and conquer new international markets. Banks underpin more than a third of global trade transactions, representing trillions of dollars each year.
And if trade needs financing to flow smoothly around the world, banks in turn need common rules and guidelines to deal with their counterparts from other countries in order to avoid the confusion that comes with conflicting national rules.
Having companies across the globe voluntarily abide by the same guidelines also levels the playing field, making it easier for small- and medium-sized enterprises to integrate foreign markets and global value chains, and ensuring that trade is more inclusive.
ICC’s global rules for documentary credits were established in the 1930s—a time of growing nationalism and protectionism—and have since become the most successful privately drafted rules for trade ever developed.
Every year, trade transactions of over US$1 trillion are conducted on the basis of these ICC rules on documentary credits—now known as UCP600—yet international trade is constantly evolving. This leads ICC to continually adjust and overhaul our rules to reflect the changing nature of banking in trade.
ICC also develops guidelines for fields, such as forfaiting, demand guarantees and supply chain finance—all ways that banks work with companies to mitigate the risks involved in trade.
As disputes between companies and banks inevitably occur within this vast area of work, ICC’s expertise is also used to help parties resolve their disagreements around trade finance documents quickly and without going to court.
When disputes around global trade finance rules are resolved in a rapid, fair and cost-effective manner, trade can avoid the slowdowns and hassle that stem from protracted international litigation. In this spirit, ICC has developed rules for documentary dispute resolution (DOCDEX), where parties are provided with a specially-appointed panel of experts that deliver a decision within 30 days of receiving the necessary documents.
Find all of our trade finance rules via our ICC Store.