Comprising 60 member states – all elected by the United Nations General Assembly– UNCITRAL represents the world’s principal geographic regions and economic and legal systems.
Jean-Guy Carrier, ICC Secretary-General said: “The UNCITRAL endorsement of the ICC URDG will undoubtedly define the direction of banking practice for demand guarantees, establish international unity with regards to these practices, and alleviate any confusion and miscommunication which could arise in the completion of trade transactions.”
ICC was invited to attend the UNCITRAL session as an international non-governmental organization observer, and to provide expertise and international experience to facilitate the deliberations on URDG matters.
“Whatever the obligation they secure, or the industry, or trade sector where the underlying contract operates, ICC’s Uniform Rules for Demand Guarantees provide a suitable operational framework whenever a demand guarantee is required. UNCITRAL’s endorsement of URDG 758 is a major milestone for the new rules to become the international uniform standard for demand guarantees worldwide”, said Georges Affaki, Head of Structured Finance Legal Affairs at BNP Paribas, who led the revision.
The UNCITRAL endorsement of URDG is testament to the success of ICC rules and exemplifies deep commitment to harmonizing the rules on an international level,” Mr Affaki added.
During the UN Commission’s plenary session Andrea Hauptmann, Head of the Guarantees Department at Raiffeisen Zentralbank and a member of the URDG Drafting Group explained the URDG revision process and illustrated the most important features of the new rules. “URDG 758 endorsement reinforces the ICC mandate of removing legal obstacles to international trade by progressively modernizing and harmonizing trade law,” she said.
Delegates welcomed URDG 758 and praised the text for its intelligibility and pedagogic style.
The extensively updated URDG 758 – which came into force on 1 July 2010 – reflect international practice in the use of demand guarantees and apply to billions of US dollars in aggregate of outstanding guarantees in all sectors of trade and industry including construction, capital markets, commercial lending, corporate restructuring and structured finance. The revision of the URDG spanned two-and-a-half years and was a cooperative effort by the ICC Commission on Banking Technique and Practice and Commission on Commercial Law and Practice, which are made up of representatives from banks, companies and law firms worldwide.
Clearer, more precise and more comprehensive than the URDG 458 they replaced, the new rules aim to maintain risk control through the high level of certainty and predictability that they foster. Comprising 35 articles, the new URDG also comes with embedded model guarantee and counter-guarantee forms and a set of optional clauses in a ready-to-use package.
Visit the ICC Bookstore to buy the URDG 758 publication and the URDG Guide