DISCLAIMER
ICC endorses no responsibility in this guidance paper which is aimed only at sharing practical views and guidance from experts in the management of Trade Finance transactions during this exceptional period of time. All decisions taken with regard to a trade finance transaction that follows this guideline will be understood to be taken under the full responsibility and agreement of the parties involved.
1. EXECUTIVE SUMMARY
(i) Up until recently, as with the volcanic eruption in Iceland of 2010, banks and guarantors (collectively described herein as "Bank" or "Banks") have, to varying degrees, remained open for business, with the result that the question of whether or not force majeure could be applied, as a defence to non-performance, had not been considered. However, as the situation continues to evolve, it appears that some Banks are in the process of being closed or operating under reduced working hours and/or reduced staffing levels.
(ii) Banks in a number of countries have started to ask whether the novel coronavirus ("COVID-19") may be considered to be an interruption of its business or an event that is beyond the control of Banks, as is referenced in the force majeure provisions of UCP, eUCP, URDG, URC, eURC, URR and URBPO (collectively described herein as "ICC rules"). The stance taken in ISP98 is referred to separately in this paper and in the context of the issue under discussion. (iii) The answer to the question in (ii) is: even where a trade finance transaction is made subject to ICC rules, depending on the applicable law it will require a court or tribunal with jurisdiction, or a government or regulatory authority to make a decision as to whether an event of force majeure is to be declared. In the event of such a decision being taken it must be communicated to all parties in the transaction according to the applicable law.
