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Revised publication
codifies international bank guarantee law
Paris,
1 October 2004
- ICC Publishing's latest publication, the revised "Bank Guarantees
in International Trade", examines how the practical applications
of bank guarantees have established a pattern of law.
Drawing on case law
and legal writing from five European countries --The Netherlands, Germany,
France, Belgium, and England -- Roeland F. Bertrams's treatise offers
practitioners in international trade law the most complete and up-to-date
analysis of banking law in the field.
ICC spoke to Mr Bertrams
about the motivation behind the book, as well as the latest developments
in banking guarantees and standby letters of credit included in this third
edition.
Could you describe
your book in a few lines?
Bertrams: It is a comprehensive treatise on independent (first
demand) guarantees and standby letters of credit in which I have tried
to achieve two objectives in particular. Bank guarantees and standbys
is one of those subjects where the law and practice are intricately intertwined
with each other. They are a creation of practice in international trade
and business, and the law had to be shaped from those grass roots. So,
one objective was to describe, analyze and develop the law and, at the
same time, to pay close attention to actual practice and to provide insight
into "the daily life" of the world of independent (first demand)
guarantees and standbys. I find it fascinating to observe how certain
areas are still not covered by precise rules of law but only by certain
practices, be they good or bad, sometimes clear and fixed and at other
times rather imprecise and variable. To some extent, I think, this is
going to be a permanent feature.
The second objective was to write a book that could be used in both Continental
law and Common Law jurisdictions. Although difficult, this proved to be
possible, as a significant degree of uniform law across jurisdictional
boundaries has spontaneously emerged. This could only happen because independent
(first demand) guarantees and standbys developed autonomously and independently
of national law with
its traditional concepts, categories and domestic
peculiarities. I find it most rewarding that this book is being used in
more than 40 countries spread over all continents.
What are the most
important developments since the date of the second edition?
Bertrams: As this book is a comprehensive and detailed treatise,
it will always need a thorough revision at regular intervals in order
to remain reliable and to represent the state of the art. In fact, this
third edition was long overdue as the second edition dates from 1996.
If one compares the first edition of 1990 with the third edition of 2004
one is bound to notice the vast differences in respect of numerous subjects.
I don't think there is one single page that has remained unchanged.
If I have to mention
certain important developments of a general nature since the second edition,
I can think of three. First, there is the introduction of the 1998 International
Standby Practices (ICC publication no. 590) and the entry into force of
uniform legislation on independent guarantees in the 15 West African OHADA
member states which is directly derived from the 1992 ICC Uniform Rules
for Demand Guarantees. Second, there is the increasing use of first demand
guarantees in the domestic markets where, outside the United States, its
use was largely confined to cross-border transactions, and the growing
use of such guarantees as financing instruments which enables contracting
parties to allocate the burden of financing transactions in a more efficient
way while maintaining the function of security required in such transactions.
The most important
development, in my opinion, is the fact that certain countries, mainly
in the Middle East and North Africa, by now also recognize that expiry
dates are enforceable, where this did not use to be the case. This new
development should certainly have an impact on certain banking practices
in relation to guarantees in favour of these countries.
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