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VI. COORDINATION AND COOPERATION
A.
International Standby Practices (ISP98):
Report of the Secretary-General
(A/CN.9/477) [Original: English]
“ISP98 reflects a distillation of practices from a wide
range of standby users—bankers, merchants, rating agencies, corporate treasurers, credit managers, government
officials and banking regulators. Like the UCP for commercial credits, ISP98 is destined to become the standard
for the use of standbys in international transactions.”
1. At its thirty-second session in 1999, the Commission
considered, on the basis of a report of the SecretaryGeneral,1 a request by the Director of the Institute of International Banking Law and Practice, Inc. to consider endorsing for worldwide use the new Rules on International
Standby Practices (ISP98) (letter of request of 3 March
1999 is reproduced in annex I). However, owing to the fact
that late publication of that report had prevented some
delegations from carrying out consultations, the Commission felt obliged to postpone consideration of endorsement
until the thirty-third session in 2000.
4. By way of general background, it may be noted that
the subject of documentary credits and bank guarantees has
been a topic in which the Commission has taken an interest
since the time of its inception. The Commission endorsed
the 1962 version of the Uniform Customs and Practice for
Documentary Credits (UCP) at its second session in 1969,2
the 1974 version at its eighth session in 1975,3 the 1983
version at its seventeenth session in 19844 and the 1993
version at its twenty-seventh session in 1994.5
2. The official text of ISP98 in English, which has been
endorsed by the International Chamber of Commerce (ICC)
and issued as ICC publication No. 590, is reproduced in
annex IV. Translations into Chinese, French, Russian or
Spanish are reproduced in annex IV of the respective
language versions of this note. Translations into Bulgarian,
Hebrew, Korean and Turkish have been prepared and published. Translations into German, Italian, Japanese and
Thai are currently being prepared.
3.
5. In view of the close link between ISP98 and the 1995
United Nations Convention on Independent Guarantees and
Stand-by Letters of Credit, the Secretary of the Commission participated in the preparation of ISP98 so as to ensure
consistency between these two supplementary texts. His
prologue to the ICC publication is reproduced in annex III.
Additional information on the reasons for the preparation
of ISP98 and about its salient features may be deduced
from the preface contained in annex II.
As stated on the cover of that publication,
“ISP98 fills an important gap in the market place.
Though standby letters of credit have similarities with
commercial letters of credit and other financial instruments, there are significant differences in scope and
practice. Moreover, it is recognized that the ICC’s Uniform Customs and Practice for Documentary Credits
(UCP), which is internationally accepted for commercial
letters of credit, is not appropriate for all forms of
standbys. A new set of Rules was required for this workhorse of commerce and finance, which, in terms of
value, exceeds commercial credits by a ratio of 5:1.
2
Report of the United Nations Commission on International Trade Law
on the work of its second session, Official Records of the General Assembly,
Twenty-fourth Session, Supplement No. 18 (A/7618), para. 95.
3
Report of the United Nations Commission on International Trade Law
on the work of its eighth session, Official Records of the General Assembly,
Thirtieth Session, Supplement No. 17 (A/10017), para. 41.
4
Report of the United Nations Commission on International Trade Law
on the work of its seventeenth session, Official Records of the General
Assembly, Thirty-ninth Session, Supplement No. 17 (A/39/17), para. 129.
5
Report of the United Nations Commission on International Trade Law
on the work of its twenty-seventh session, Official Records of the General
Assembly, Forty-ninth Session, Supplement No. 17 (A/49/17), para. 230.
1
A/CN.9/459. The present note largely reproduces A/CN.9/459, since at
the thirty-second session of the Commission only the English and the
French versions of ISP98 were available.
ANNEX I
Letter of Professor James E. Byrne, Director of the Institute of
International Banking Law and Practice, Inc
I am writing to request endorsement of the International Standby Practices (ISP98) by the United
Nations Commission on International Trade Law.
These private rules of practice are intended to apply to standby letters of credit. The idea to
prepare such rules was conceived during the deliberations of the UNCITRAL Working Group on
579
580
Yearbook of the United Nations Commission on International Trade Law, 2000, vol. XXXI
International Contract Practices which resulted in the United Nations Convention on Independent
Guarantees and Standby Letters of Credit (“the Convention”). These rules were deliberately formulated to complement the Convention whose use is recommended in their Official Preface. The
ISP98 drafting process itself was undertaken in regular consultation with the UNCITRAL secretariat and the Institute has used occasions to promote ISP98 as an opportunity also to promote
adoption of the Convention.
ISP98 became effective 1 January 1999. It has been endorsed by the International Financial
Services Association and the ICC Commission on Banking Technique and Practice, and issued as
ICC publication No. 590. It is currently being used and promoted by major banks which issue
standby letters of credit, and is expected to become the world standard within the next few years.
Because of the close links between ISP98 and the Convention, and due to UNCITRAL’s past
practice of endorsing similar rules of practice, such as UCP500 and Incoterms 1990, the Institute
formally requests that the Commission consider endorsement of ISP98.
ANNEX II
© 1998 Institute of International Banking Law & Practice, Inc.
All Rights Reserved. Reproduction of any part of this work by any means without
the express written permission is prohibited.
Approved by the International Financial Services Association and the
ICC Banking Commission
PREFACE
The International Standby Practices (ISP98) reflects generally