Uniform Commercial Code

1. Mohammad Sabuz Class: Managing in a Global Economy



Uniform Commercial Code

Uniform Commercial Code is defined as “a standard set of business laws that regulate
financial contracts”
1
. It is a code, first published in 1952, and was created with the goal to
provide the flexibility of commercial transactions that extended throughout the states. It would
be nice to have a Unified Commercial Code in place but it is impossible for the world to have a
Unified Commercial Code.

Having a Unified Code, the whole world would be able to trade better and wouldn’t
have to face the complications of learning new laws and regulations. Everyone will be following
the same rules and regulations, and will face a fine if otherwise. If a Unified Code existed there
wouldn’t be a situation such as US vs. BNP Paribas
2
. Companies wouldn’t be charged criminally
or be fined for billions of dollars for something that’s legal in their home country but not in
another (in this case the US). Unified Code can prohibit many controversies that may lead many
businesses to find another home which in return will shrink certain economies.

The world that is currently will not be able to hold a Unified Code for all the countries in
the world. Every nation has different customs, legal systems, economic development, and so

1
http://www.investopedia.com/terms/u/uniform-commercial-code.asp

2
http://www.marketwatch.com/story/possible-us-fines-increase-tensions-at-bnp-2014-06-04-181031843

2. Mohammad Sabuz Class: Managing in a Global Economy



forth. When it comes to legal systems, many of the third world countries
3
don’t have any
respect for it, they create their own rules
4
. Customs is another large barrier. Take Muslim
people for instance, their belief system forbids them from taking interests earned by lending,
for which Islamic Bank
56
was created and it is scattered throughout the world. Economy
development is another one. Economy develops various ways in each specific nation. Some
develops due to agriculture while some due to gold, oil, gas, and other natural recourses, while
others in trades, services, and garments.

Unified Commercial Code can either exceed or harm a nation. A rule/code is created for
some benefits, which is not a problem; the problem is that it is written by those who are
leading the nation, the top 2%, not the regular people who actually face real issues on their
daily lives. The purpose of the code will be to make rich richer and poor poorer. What is good
for one nation may not be good for another. It will only create more chaos than the world is
already in. Unified Code is not a good solution for the world, at least not now.

3
http://www.nationsonline.org/oneworld/third_world.htm

4
http://en.wikipedia.org/wiki/Third_World_Approaches_to_International_Law

5

http://www.irti.org/irj/go/km/docs/documents/IDBDevelopments/Internet/English/IRTI/CM/downloads/IES_Articl
es/Vol%203-1..H.%20Shajari%20-
%20M%20Kamalzadeh...THE%20INTEREST%20RATE%20AND%20%20and%20Islamic%20Banking.pdf

6
http://en.wikipedia.org/wiki/Islamic_banking