RIYADH, 23 May 2007 — SABB organized customer seminars in Riyadh and Jeddah recently on the International Chamber of Commerce’s new rules for Letters of Credit, UCP600, which comes into force on July 1, 2007. They are a complete rewrite of the current UCP500 with changes affecting banks, exporters and importers.
Gary Collyer, chairman of the UCP600 Drafting Committee and the world’s leading expert on this topic, was the guest speaker. He said that it is important for both importers and exporters to understand the full depth of the UCP600 changes and cover themselves against potential disputes with banks and counterparties. “Globally, about 70 percent of documents presented under LCs are discrepant. UCP600 is meant to simplify the rules and remove any ambiguities, so that international trade can be facilitated” he said.
Among the major changes are a Definitions article explaining the meaning of commonly used trade terms and a new maximum limit of five working days for banks to check documents under LC.
Collyer emphasized the importance for Saudi companies to check the authenticity of their overseas buyer and seller to avoid fraud.
Internationally reputable inspection companies can be used to check the goods before shipment.
Ahmed Al-Ameer, SABB area general manager Central Province, assured customers of arranging similar events in the future for the benefit of customers and their staff.
SABB’s officials also mentioned the growing trade between Saudi Arabia and Asia, particularly China and India, and the long history of HSBC in that region. As part of the HSBC Group, SABB has access to global expertise in trade and a branch network across 82 countries.
A presentation was also given on the Marine Cargo policies that will soon be offered by SABB Takaful. This will allow customers using Islamic LCs to purchase Takaful cargo policies that are Shariah-compliant.
