ISP98: Standby Rules Well-suited for Technological Advancements Then and Now

When the ICC Banking Commission Ad Hoc Working Group travelled to New York over 25 years ago to discuss with the US Drafting Group the possible widening of the scope of the content of the (almost) final draft of the International Standby Practices (ISP), it is doubtful that any attendee would have foreseen that what was a new set of rules would remain unamended as we enter 2024.

The outcome of that drafting session was agreement between the two Meynell Collyer groups on the final text and that the ICC Banking Commission would be requested to endorse the ISP98.

In the 25 years since publication, ISP98 have emerged as a clear standard in respect of standby credits for reasons that address the unique nature and requirements of these financial instruments. Whilst there are no reasons to prevent UCP 600 being utilised as the applicable rules for a standby credit, the nature of a standby means that a number of aspects of UCP 600 are inappropriate. For example, due to the normal absence of a requirement under a standby credit for original commercial documentation, the UCP 600 articles governing transport and insurance documents (articles 19-28) and invoices (article 18) would often not be applicable.