International Chamber of Commerce: ICC Breakdown & Definitions
What is ICC
The ICC, the International Chamber of Commerce, is the world’s largest business organization with 45 million members in more than a hundred countries. ICC is an institution that regulates international trade and is the corporate representative of more than 45 million companies that are members. It offers opportunities such as consultancy, Arbitration, and trade enrichment.
ICC was founded in 1919 in Paris, the capital of France, to establish a system that regulates international trade, investment, finance, and commercial relations around the world. The organizational headquarters is still in Paris. In 1923, another important service of the ICC came into play: the International Court of Arbitration was established as the arbitration body of the ICC for the settlement of international commercial disputes.
What are ICC Activities
ICC has three main areas of activity:
– Making rules,
– Dispute resolution and Arbitration
– Policy advocacy.
It regulates international trade and communicates with local companies by cooperating with local offices opened in ICC member countries and local chambers of commerce in those countries.
While representing international trade, the ICC sets rules and develops policies for services such as trade security, trade development, non-disruption, Arbitration. Since its establishment, ICC has been trying to develop rules and standards that will ensure uniformity for international trade.
Brief History of ICC
The ICC was established in 1919 to repair the damage caused by the First World War to international trade and improve international trade. The slogan of the merchant entrepreneurs who took part in establishing the ICC was ‘traders of peace.’
Incoterms, published by the ICC in 1936, was a revolutionary arrangement, but its main effect was experienced in the fifties after the Second World War.
What is INCOTERMS®
Incoterms determine the responsibilities of the parties subject to international trade by regulating the shipping and insurance processes. It has been changed eight times, from the first incoterms published by the ICC in 1936 to the last incoterms that came into force in 2020. The main purpose of Incoterms is to enable the parties involved in international trade to organize their shipment processes within the framework of common rules.
Incoterms is a system created by ICC to regulate the delivery methods in import and export. It is the abbreviated name of “International Commercial Terms.”
What are the benefits of the International Chamber of Commerce?
International Chamber of Commerce “ICC” for short, promotes global trade, develops policies and rules to make trade safer and easier, and resolve disputes. The three main activities of the ICC are:
- Establishing rules to facilitate trade.
- Developing mechanisms for resolving disputes between companies and governments.
- Implementing trade-supportive policies.
What is the purpose of the International Chamber of Commerce?
The primary purpose of the ICC is to develop methods to improve trade and overcome barriers. In addition to enhancing business, services such as Arbitration and arbitrage, developed to resolve disputes that may arise between companies engaged in international trade, are carried out under the guidance of ICC.
- Fight against patronage,
- Development of trade and investments,
- Expanding commercial cooperation across borders
In order to achieve these goals, ICC provides information, organizes conferences and seminars on its website in order to inform traders and people in business about the prevention and resolution of commercial disputes and international commercial practices.
What are the ICC rules?
The 2021 Rules will define and regulate the management of cases received by the International Court of Arbitration (the Court) on or after 1 January 2021. However, a previous version of the rules may apply if the relevant arbitration agreement (under which Arbitration is commenced) provides for such application.
What are the ICC Membership Requirements?
Joining ICC makes good business sense and is simple to do through one of two ways: Through affiliation with an ICC national committee or group in your country. Through direct membership with the ICC International Secretariat, a national committee/group has not yet been established in your country/territory.
Letter of Credit – UCP 600
Due to the nature of the trade, the seller company wants to work with cash payment, while the buyer companies want to work with deferred payment. Upfront sales are risky for buyer companies, while forward sales are risky for seller companies. A letter of credit provides a method for a bank to determine the terms under which goods will be delivered, and payment made and ensure that trade is carried out with the bank’s assurance. In the commercial law of many countries, there are no regulations regarding a Letter of Credit. At this point, ICC offers a very secure payment method for both exporters and importers.
The ICC first announced a regulation titled “Uniform Customs and Practice for Documentary Credits –UCP” in 1933. To date, UCP content has undergone five revisions.
These revisions were made taking into account the suggestions, requests, and DOCDEX decisions from world markets, exporters, importers, and banks. The last revision, still applied as UCP 600, was made in 2007. Letters of credit, which are opened by banks at the importer’s request and sent to exporting companies, are prepared in accordance with the rules specified in UCP 600. With this service, ICC has provided the opportunity to prepare standard letters of credit, the content of which can be controlled by the UCP 600 guideline. In this way, companies located in different countries of the world had the chance to work with each other in a method that provides secure payment and goods delivery.
ICC Technical Commissions
- Banking Technique and Practice Commission
- Commercial Practice Commission
- E-business, IT and Telecoms Commission
- Business in Society Commission
The ICC governing bodies are the World Council, the Governing Body, the Presidency, and the Secretariat. The World Council is the highest governing body, and each national committee is represented by one or two council members it appoints.
While most arbitration organizations are local or national in scope, the ICC Court has a purely international framework. Consisting of members from a total of 90 countries on every continent, the Court also has the distinction of being the most widely represented arbitration institution.
Referred to as “Arbitration” in the international trade literature, Arbitration offers fast, low-cost, and reasonable solutions in commercial disputes between an exporter and an importer operating in two different countries. It saves companies from ongoing and possibly unresolved litigation processes in different country courts. The ICC offers the following benefits to companies that engage in international business through Arbitration.
a) Possibility of a quick solution.
b) Possibility of low-cost solution.
c) The privacy of companies is protected through Arbitration.
d) Reliable and expert arbitral tribunal: