In order to unify the collection business practices and reduce the conflicts and disputes that may arise among the parties involved in the collection business, the International Chamber of Commerce drafted the “Uniform Rules for Collection of Commercial Paper” (ICC Publication No. 192) in 1958 and recommended it to banks in various countries for adoption. After several revisions, it was renamed the “Uniform Rules for Collection” in 1978. In the 1990s, international economic and trade had great development and changes. In 1995, the International Chamber of Commerce revised the “Uniform Rules for Collection” again. The new revised version, namely the International Chamber of Commerce Publication No. 522 (Uniform Rules for Collection, ICC Publication No. 522), referred to as “URC522”, was published and implemented on January 1, 1996.
“URC522” consists of 7 parts and a total of 26 articles. Its main contents and new clauses are as follows:
(1) The collection instruction must indicate that the collection should be handled in accordance with “URC522”. Article 4 provides that: All documents sent for collection must be accompanied by a collection instruction indicating that the collection will be in accordance with the Uniform Rules for Collections No. 522 and setting out complete and clear instructions. Banks are only permitted to collect documents in accordance with the instructions in the collection instruction and these Rules.
2) D/P deferred is not recommended. According to Article 7, a collection should not contain deferred bills of exchange and at the same time stipulate that commercial documents must be delivered after payment. If a collection contains deferred bills of exchange, the collection instruction should indicate that the commercial documents are to be delivered to the payee against documents against acceptance (D/A) rather than against documents against payment (D/P). If there is no such indication, commercial documents can only be delivered against payment, and the collecting bank is not responsible for any consequences arising from the late delivery of documents.
(3) Banks and their nominated persons should not be consignees. Banks only deal with documents and not with goods or contracts representing goods. Banks are not obliged to take any action on goods under documentary collections, including warehousing and insurance of goods.
(4) The bank must verify whether the documents it receives are consistent with the contents listed in the collection instructions. If it finds that the documents are missing, the bank is obliged to notify the party that issued the collection instructions by telecommunication or other quick means. Apart from this, the bank has no obligation to further review the documents.
(5) If payment or acceptance is refused for collection, the presenting bank shall issue a notice of refusal to pay to the remitting bank. After receiving this notice, the remitting bank must give corresponding instructions on the handling of the documents. If the presenting bank has not received such instructions within 60 days after the notice of refusal to pay or refusal to accept occurs, it may return the documents to the remitting bank and shall no longer bear any responsibility.
Since its promulgation and implementation, the “Uniform Rules for Collections” have been adopted by banks in various countries and have become an international practice for collection business.