Free Online Course in International BusinessKnowledge StatementKnowledge of International Regulations Published by the International Chamber of Commerce (Paris) Governing International Transactions and Methods of Payment: Incoterms, UCP, Arbitration, Uniform Rules for CollectionGoalThe goal of this material is to introduce you to the regulations published by the ICC governing and affecting methods of payment such as the Incoterms and UCP.Learning ObjectivesYou will be able to:• identify the international regulations published by the ICC. • recognize the UCP and its affect on methods of payment. • recognize the Incoterms and their effect on methods of payment. IntroductionAn international manager should understand the organizations that create international financial regulation. In addition, identifying the various options available in these organizations provides an opportunity to improve chances for timely payment from their buyers.ICCThe International Chamber of Commerce was founded in 1919 with a goal to serve world business by promoting trade and investment, open markets for goods and services, and the free flow of capital. ICC activities cover a broad spectrum resolving disputes through arbitration, making the case for open trade and the market economy system, helping business become self regulated, fighting corruption, and combating commercial crime.ICC model contracts make life easier for small companies that cannot afford high legal costs by providing templates. • ICC is a pioneer in business self regulation of e commerce. • ICC codes on advertising and marketing are frequently reflected in national legislation and the codes of professional associations. • ICC has direct access to national governments all over the world through its national committees. The organizations Paris based international secretariat feeds business views into intergovernmental organizations on issues that directly affect business operations. • The ICC also sets rules and standards: • Arbitration under the rules of the ICC International Court of Arbitration is on the increase. Since 1999, the Court has received new cases at a rate of more than 500 a year. • ICCs Uniform Customs and Practice for Documentary Credits (UCP 500) are the rules that banks apply to finance billions of dollars worth of world trade every year. • ICC Incoterms are standard international trade definitions used every day in countless transactions. Uniform Customs and Practice (UCP) for Documentary CreditsInternational standards of letter of credit practices were established for bankers by the International Chamber of Commerce. Historically, the UCP has been revised about every ten years to keep up with changing practice; the most recent revision, UCP600, was completed in 2006 and was put into effect July 1, 2007. Although the UCP defines rights and obligations of the various parties in a letter of credit transaction, it is not law; so any given letter of credit is subject to the UCP only to the extent indicated in the letter of credit itself.Uniform Customs and Practice - Electronic Supplement (eUCP)The electronic supplement to UCP 500 was first launched in April 2002. It was also updated and is now part of the UCP600. The eUCP provides a general framework of principles for dealing with the electronic documents (shipping, customs clearance and banking documents) being presented in letter of credit transactions. This document outlines the steps to authenticate documents and gives presentation requirements as well as the steps to take if a document is corrupted. The creation of this supplement shows the need and willingness of the ICC to maintain its currency in the world of business and the changes in technology that affect business.Uniform Rules for CollectionsThe Uniform Rules of Collections are the international standards of draft collection practices established for bankers by the International Chamber of Commerce. The Uniform Rules are not law but are more properly viewed as a handbook for banks used to establish common understanding of terminology and expectations.
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