On October 30, 2019, the International Chamber of Commerce (ICC) Banking Commission hosted a workshop entitled Instruments & Methodologies in Trade Finance and Project Finance Transactions, which was prepared and presented by Mr. Luca Bernardinetti, MPG Chairman & Managing Partner, and member of the Thailand International Chamber of Commerce’s Commission on Banking Technique & Practices. Mr. Bernardinetti analyzed the Uniform Customs & Practice for Documentary Credits (UCP 600), the International Standby Practices (ISP 98) and the Uniform Rules for Demand Guarantees (URDG 758), illustrating ICC Rules application best practices and debunking common misconceptions.
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The workshop explored common characteristics of trade finance instruments, drawing attention to differences between documentary credits and negotiable instruments, definitions of irrevocable and independent obligations, main differences between the Uniform Rules for Demand Guarantees numbers 458 and 758, the definition and features of counter-guarantees, Credit Substitution principles, preventing unfair and fraudulent calls of demand guarantees, the fraud exception to the autonomy principle, as well as selecting the correct trade finance instrument for specific transactions. Mr. Bernardinetti also analyzed project finance case studies, expanding on the use of demand guarantees to achieve credit enhancement. Some examples were discussed, specifically Build, Operate, and Transfer (BOT) Public-Private Partnerships (PPP) in ASEAN, such as the Bangkok Pink and Yellow Monorail Lines, the Manila Metro Rail Transit Line 7 (MRT-7) and the Jakarta Bandung High-Speed Railway. In this context, Mr. Bernardinetti underscored the importance of the host country’s public procurement legislation, giving an overview of Thailand’s Public-Private Partnership Act B.E. 2562 (2019), and of the use of guarantees in construction contracts. Specifically, formal requirements for demand guarantees were discussed and templates for tender bonds, advance payment bonds, performance bonds and retention money bonds were shared with the workshop participants.
At the end of the workshop, Mr. Bernardinetti, in his capacity as representative of ICC Thailand Commission on Banking Technique & Practices, awarded the participants a certificate of attendance issued by the London Institute of Banking & Finance (LIBF), required for the Certified Documentary Credit Specialist (CDCS) Re-Certification program.