Letters of Credit
and Trade Financing

The ICC Global Rules for Documentary Credits were established in the 1930s and have since become the most successful private trade rules ever developed.

Banking plays an undeniable role in making commerce work for everyone, allowing even small businesses to take risks and conquer new international markets. Banks currently account for more than a third of global business transactions, ie trillions of dollars each year.

And if trade needs finance to flow, banks, in turn, need common rules and guidelines for dealing with their counterparts in other countries, in order to avoid obstacles that can arise from conflicting national rules.

Every year, trade transactions of more than $1 trillion are conducted under the ICC rules on documentary credits – now known as UCP600 – even as international trade is constantly evolving.

This leads the ICC to continually adjust and revise these rules to reflect the changing nature of commercial banking.

The ICC also develops guidelines such as forfaiting, demand guarantees and supply chain financing – all the ways in which banks work with companies to mitigate the risks involved in trade. The ICC also offers rules for the resolution of documentary disputes (DOCDEX), with the aim of making the resolution of trade finance disputes more agile, fair and economical and avoiding a possible slowdown in global trade.

With the global economy increasingly digital, ICC has been working globally through the ICC Digital Standards Initiative to develop harmonized digital standards applicable to business transactions that lower costs and streamline business operations, including access to finance.

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