Lloyd's Maritime and Commercial Law Quarterly
BOOK REVIEW - “FINANCE OF INTERNATIONAL TRADE” (SECOND EDITION)
by Alasdair Watson
Published by Watson’s Press Ltd, Cambridge for The Institute of Bankers (1982, xii and 330 pp., plus 3 pp. index)
Paperback £9.95
In the five years since the first publication of this highly successful book the financial world has experienced a number of changes, the most notable of which are the abolition of exchange control in the United Kingdom in 1979 and the consequent expansion in foreign currency financing, and the increasing concern over the use of “on demand” bonds or guarantees (or “suicide bonds” as they are referred to in the glossary of this book), especially by countries in the Middle East. These particular developments, together with more general updating, are now incorporated into a second edition of the book with the result that the earlier seven chapters are now increased to 10, and a number of new glossaries and documents have been introduced. In addition, the author has taken the opportunity to reshuffle various sections of the work in order to achieve greater clarity and logic in the overall presentation of the material.
The new edition opens with a chapter on the principles of international trade and the role of London’s financial institutions, thereby providing a more gentle introduction into the complexities of international finance than in the previous edition. The next five chapters then proceed to guide the reader towards understanding the operation of clean payments and settlements; shipping terms and documents of foreign trade; collections (incorporating the new Uniform Rules for collections (1978)); documentary credits and credit insurance and preferential export finance (now including a most elaborate diagram illustrating E.C.G.D. facilities at a glance). The new material on bank guarantees is contained in Chapter 7, now entitled “Trade Finance and Guarantees”, where the problems relating to “on demand” bonds are briefly considered, together with mention of two of the leading cases on this subject. Also introduced are the new Uniform Rules for Contract Guarantees (1978) which were specifically designed to mitigate the problem, and a new glossary of all the various bonds and guarantees issued. Analysis of the rules relating to foreign currency have now been extended from one into three chapters of the book, including a separate, albeit short, chapter on exchange control, and the effects of its abolition in practice,
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