INTRODUCTION
The ICC (International Chamber of Commerce) was founded in Paris, France in 1919. The organization’s international secretariat was also established in Paris, and its International Court of Arbitration was formed in 1923. The primary governing bodies of ICC are World Council, Executive Board, Chairmanship, and Secretary-General. There are global rules by which ICC regulates the commercial transactions which are UCP 600, URC 522, URDG, etc.
ICC is that institutional representative of quite more than 45 million companies in over 100 countries with a mission to make the business work for everyone, every day, everywhere. Through a unique mix of advocacy, solutions and standard-setting, they promote international trade, responsible business conduct, and a global approach to regulation, in addition to providing market-leading dispute resolution services. It represents business interests at the highest levels of intergovernmental decision-making, whether at the World Trade Organization, the United Nations, or the G20 – ensuring the voice of business is heard. It is this capacity to bridge the public and private sectors that sets us apart as a unified institution, responding to the requirements of any stakeholder involved in international commerce.
THE ICC’S ROLES EXPAND TO MEET THE 21ST CENTURY
Since the turn of the 21st century, the ICC has kept up with the times. In 2017, for example, it expanded its rules of arbitration to include Expedited Procedure Provisions, which help to accelerate resolution in trade disputes of $2 million or less.[1] The ICC also has established guidelines to assist businesses and individuals to protect their intellectual property, especially when conducting business globally.18
Beyond its digital initiatives, the ICC has branched out to address another realm of sustainability: combating global climate change, which it sees as key to the “long-term certainty needed to support business and innovation growth.”[2] For the last several years, the ICC has worked alongside business groups and other non-governmental organizations, and supported the Paris Agreement, in an attempt to mitigate greenhouse gas emissions.[3]
ICC INDIA
Chambers of commerce are common to most industrialized countries operating within a free-enterprise or mixed system. Such organizations generally find the need for some form of national affiliation, so as to present an agreed front to central governments. The functions of these chambers are many; they generally include representing the interests of members to local and national authorities, issuing certificates of origin, nominating members to consultative committees, providing advice on import duties and commercial legislation.
ICC India is one of the foremost active chapters of the ICC, the world’s apex business organization. It has a large membership of corporate, chambers of commerce, trade & industry associations, consultancy organizations, law firms, etc. Jawahar Vadivelu And Vikramjit Singh Sahneyare are Current Chairs.
ICC AND CORONA PANDEMIC
The International Chamber of Commerce (ICC) is increasingly concerned about the impact of the novel coronavirus (COVID-19) pandemic on the functioning of the global trade finance market. COVID-19 induced dislocation in this market may have significant negative implications for essential global trade flows and, moreover, the viability of many micro-, small- and medium-sized enterprises (MSMEs).
ICC called on all governments to take emergency measures to immediately void all existing legal prohibitions on the use of electronic trade documentation. International legal standards can be readily adopted in national laws to provide legal clarity for banks to accept e-documents in order to expedite the financing of trade transactions and the release of goods through this unprecedented crisis.
In the context of COVID-19 this reliance on hard-copy documents presents two fundamental challenges to the effective financing of trade:
(i) due to the unprecedented, yet necessary public health measures taken in response to the pandemic (such as “social distancing” or teleworking), banks face growing difficulties processing paper-based transactions which, by their very nature, require significant levels of in-person “back office” staffing; and
(ii) the transmission of trade documentation is being severely disrupted as postal services become stretched, and in some cases, suspended.
ICC is concerned that this operational disruption may have significant implications for global trade flows, potentially disrupting supply chains for essential goods to tackle COVID-19 such as medical equipment and staple foods.
Emergency Interventions From Governments Needed To Remove Reliance On Paper-Based Trade Documentation[4]
In this context, it is imperative that all governments take immediate steps to enable banks to process trade finance transactions utilizing electronic trade documents— removing the need for any documentation to be presented in hard-copy.
On this basis, ICC calls on all governments to take the following actions without delay: —
- As a temporary measure, void any legal requirements for trade documentation to be in hard copy. The specifics of voiding legislative requirements will depend on the constitutional arrangements of each country. Nevertheless, ICC calls on all countries to take all necessary legislative or executive actions, according to national circumstances, to remove requirements for key trade documents.
- Adoption of the UNCITRAL Model Law on Electronic Transferrable Records. As a subsequent step, we encourage all governments to rapidly adopt legal frameworks to clarify the functional and legal equivalence of electronic and paper-based documents
ICC STATEMENT
As mentioned in a joint statement by ICC and the World Health Organization(WHO) related to the COVID-19 situation worldwide: “as an immediate priority, businesses should be developing or updating, readying or implementing business continuity plans.” In line with that recommendation, and as a response to increasing requests for guidance, the guidance paper provides practical advice and highlights best practices in the handling of trade finance transactions that are subject to ICC rules.
It is expected that, as circumstances evolve, further guidance on trade finance transactions will need to be produced in reaction to new developments and market needs, and this will be in the form of a regularly updated FAQ section that will be added to the ICC website.
Each of the ICC rules contains an article on the concept of force majeure or act of God as commonly we know. For example :
- UCP 600 Article 36 – events such as those arising out of the interruption of a bank’s business by Acts of God, riots, civil commotions, insurrections, wars, acts of terrorism, or by any strikes or lockouts or any other causes beyond its control.
- URDG 758 Article 26 – events such as Acts of God, riots, civil commotions, insurrections, wars, acts of terrorism, or any causes beyond the control of the guarantor or counter-guarantor that interrupt its business because it relates to acts of a subject to these rules. This article also provides for an extension of 30 calendar days if the guarantee expires at a time when presentation or payment under that guarantee is prevented by force majeure.
The commonality in all of the force majeure provisions in the ICC rules set out above is that the Bank is unable to fulfill its obligations due to certain events that are deemed to be beyond its control. This has led to the question as to whether or not the COVID-19 pandemic could be considered a force majeure event under ICC rules. As noted previously, this will be dependent on the facts and will ultimately be decided by a court or tribunal with jurisdiction, a government, or regulatory authority.
CONCLUSION
ICC called on all governments to take emergency measures to immediately void all existing legal prohibitions on the use of electronic trade documentation. International legal standards can be readily adopted in national laws to provide legal clarity for banks to accept e-documents in order to expedite the financing of trade transactions and the release of goods through this unprecedented crisis. Thus, ICC is capable enough not only to regulate commercial transactions but also to have enough hold over the governing parties which makes it better adaptable to changes and reducing friction between the parties as much possible. It is also efficient in combating global issues like pandemic with its rule and regulations and is nearly prepared for every situation.
[1]Leading Dispute Resolution Worldwide, ICC@100; https://100.iccwbo.org/theme/leading-dispute-resolution-worldwide
[2] The Voice of Business at the United Nations,” ICC@100; https://100.iccwbo.org/theme/icc-and-the-united-nations
[3] https://www.americanexpress.com/us/foreign-exchange/articles/role-of-international-chamber-of-commerce-over-100/
[4] file:///E:/work%20docs/Quarantine%20phase/icc-memo-on-essential-steps-to-safeguard-trade-finance-operations.pdf
Author: Akanksha Anand,
Vivekananda Institute of Professional Studies, 4th year/ Student
