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Electronic Documents (eUCP)

  • Tarsem Bhogal
  • Arun Trivedi
Chapter
Part of the Finance and Capital Markets Series book series (FCMS)

Abstract

Background to eUCP (Uniform Custom and Practice) 600: The emergence of electronic commerce in the international trade system has completely transformed the way the business community does business with its overseas counterparts. This has created the need for a new set of rules and procedures governing global trade operations including entering into sale contracts, trade payment and handling of goods and documents. This has given rise to a new agency being introduced into the international trade mechanism, that of a reliable and trusted third party to do the important work of authentication and safe keeping of messages and their integrity, storage and retrieval; give instructions to various service providers; and trigger release of goods and payment.

Background to eUCP (Uniform Custom and Practice) 600: The emergence of electronic commerce in the international trade system has completely transformed the way the business community does business with its overseas counterparts. This has created the need for a new set of rules and procedures governing global trade operations including entering into sale contracts, trade payment and handling of goods and documents. This has given rise to a new agency being introduced into the international trade mechanism, that of a reliable and trusted third party to do the important work of authentication and safe keeping of messages and their integrity, storage and retrieval; give instructions to various service providers; and trigger release of goods and payment.

Development of Electronic Model: An acceptable electronic commerce model was evolved with the initiative of Bolero and other organisations. It will take care of electronic presentation of trade documents and with the passage of time the paper-based presentation of documents would vanish under a documentary credits system.

Banks have to be aware of the requirement of the rules, which can take care of presentations whether paper-based, electronic or both paper-based and electronic. The ICC started giving thought as to whether a revision of the then UCP 500 or some other mechanism could take care of the evolving system. A Task Force was constituted by the ICC Banking Commission at its meeting on 24 May 2000 on the future of the Commission on Banking Technique and Practice with a main focus on electronic trade. The Task Force identified that there was a need to develop a bridge between the UCP and the processing of the electronic equivalent of a paperless documentary credit system. It is important to note that UCP has been extremely successful over many years of its history in providing self-regulation for the letter of credit trading system. It is time, however, to update the rules to accommodate the changes in developing technology.

Setting up of Working Group: A Working Group was set up, comprising experts from the UCP, electronic trade, legal and related industries such as transport, who after a very hard work of over a year and a half prepared a set of rules as a supplement to UCP. These rules are not a revision of UCP 600. The UCP 600 will continue to be the rules for paper-based documentary letters of credit. The eUCP is a supplement to the UCP 600 to provide necessary guidance for presentation of the electronic equivalents of paper documents under documentary letters of credits. Development of eUCP: The eUCP provides definitions to allow current UCP terminology to accommodate electronic presentation and the necessary rules to allow the UCP and the eUCP to work together. It has been written to allow for presentation completely electronically or for a mixture of paper documents and electronic presentation. Although the practice is evolving, providing exclusively for electronic presentation is not entirely realistic at this stage, nor will it promote the transition to total electronic presentation. It should be noted that the eUCP does not address any issues relating to the issuance or advice of letters of credits electronically. The current practice of issuing, advising and amendment of letters of credit is done electronically, through the SWIFT system. Many Articles of the UCP are not impacted by the electronic presentation of the equivalent of paper documents and do not require any changes to accommodate it. UCP 600 and eUCP together are good enough to allow for developing practice in this area of trade. The eUCP is specific to UCP 600.

It is important to note that the eUCP has been drafted to be independent of specific technologies and developing electronic commerce systems. They do not address or define the specific technologies or systems necessary to facilitate electronic presentation. The technologies are evolving and the eUCP leave the parties free to agree on the technology or the format for example, e-mail or one of the various document processing programs to be used in the transmission of electronic messages. It is the responsibility of the parties concerned to decide it.

Synopsis of eUCP Articles: All the Articles of eUCP are consistent with the UCP except as they relate specifically to electronic presentations. Where necessary, changes have been made in the eUCP to address the differences between presentations in paper and electronic form. With a view to avoiding confusion between the Articles of the UCP and eUCP, the eUCP Articles have an “e” preceding each Article number.

Just as is the case with UCP 600, it will be necessary to specifically incorporate the eUCP if the parties wish them to apply for credits allowing for the presentation of electronic documents (or a mixture of paper and electronic presentation). Since the eUCP supplement incorporates the UCP 600 in any credit subject to it, it is not necessary to incorporate both in the same credit.

Among the key issues of electronic presentation addressed by eUCP include:
  • The format in which electronic records are to be presented;

  • The consequences if a bank is open but its system is unable to receive an electronic record;

  • How notice of refusal of an electronic record is to be handled;

  • How original documents are to be defined in the electronic world;

  • What happens when an electronic record is corrupted by a virus or other defect.

UCP 500 has now been revised and the new publication is known as “2007 Revision ICC publication No. 600 (UCP)”. It will be effective from July 2007

Supplement to the Uniform Customs and Practice for Documentary Credits (2007 Revision ICC Publication No. 600 (UCP)) for Electronic Presentation
Article e1

Outlines the scope of the eUCP including its applicability and incorporation in a credit. Just as UCP, eUCP will apply only if it is specifically incorporated in the credit calling for presentation of electronic records alone or in combination with paper documents; that it shall apply as a supplement to the UCP; and that unless a specific version is indicated, the version effective on the date the credit is issued, or amended will apply.

Article e2

Defines the relationship of the eUCP to the UCP. As per this Article, a credit subject to the eUCP shall also be subject to the UCP without express incorporation of the UCP; that eUCP shall prevail if they would produce a result different from that of the UCP; and if eUCP allows the beneficiary to choose presentation and he chooses paper presentation or eUCP permits paper presentation only, the UCP alone shall apply.

Article e3

Gives definition of terms that appear on its face (to apply to the examination of data content), document (to include an electronic record), place for presentation (to mean an electronic address), sign and the like (to include an electronic signature), superimposed notation or stamped (means data content whose supplementary character is apparent in an electronic record) in relation to electronic presentation. This Article further defines electronic record (to mean data created, generated, sent, communicated, received or stored by electronic means that is capable of being authenticated as to the apparent identity of a sender and the apparent source of the data contained in it, and that it has remained complete and unaltered, and is capable of being examined for compliance with the terms and conditions of the eUCP credit.), electronic signature (to mean a data process attached to or logically associated with an electronic record and executed or adopted by a person in order to identify that person and to indicate that person’s authentication of the electronic record), format (the data organisation in which the electronic record is expressed or to which it refers), paper document (a document in a traditional paper form) and received (the time when an electronic record enters the information capable of being accepted by that system. An acknowledgement of receipt does not imply acceptance or refusal of the electronic record) again in its application to UCP.

Article e4

Enjoins the eUCP credit to specify the formats in which electronic records are to be presented. If not specified, any format will do.

Article e5

Deals with the presentation. According to this Article, “an eUCP must state a place for presentation for the electronic records, if to be presented and also state a place for presentation of the paper documents, if both to be presented”. It adds that electronic records may be presented separately from paper documents. If electronic record/s is part of the presentation, it is the responsibility of the beneficiary to provide a notice to the bank concerned as to when the presentation is complete. This notice may be an electronic record or paper document. If the necessary notice is not received, the presentation will deemed not to have been made. Each paper document presentation under eUCP credit must identify the credit under which it is presented, failure to do so will render presentation as not received. If the system of the bank to which presentation is to be made is unable to receive the electronic record on the expiry date and so on despite being open, it will be deemed to be closed and the date for presentation will set extended.

Article e6

Is another important Article, which deals with the examination of documents (or records in the case of electronic presentation). According to this Article, if an electronic record contains a hyperlink to an external system or a presentation indicates that it may be examined by reference to an external system, then the relevant hyperlink or external system will be the electronic record to be examined. It will be a discrepancy if the indicated system fails to provide access to the required electronic record at the time of examination. The forwarding of electronic records by the nominated bank will signify its having checked the apparent authenticity of the electronic record. It will, however, not be a basis for refusal if the bank concerned is unable to examine an electronic record in format required by the eUCP credit, or in the form presented if no format is stipulated.

Article e7

It covers the Notice of Refusal. The time period, according to this Article, commences on the banking day after receiving the notice of completeness. If this time period gets extended, the time for the examination of documents commences on the first following banking day on which the bank is able to receive the notice of completeness. It is added that the bank shall return any paper documents not previously returned to the presenter, if the concerned bank does not receive instructions from the party to which notice of refusal is given within 30 calendar days from the date of the notice. It may dispose of the electronic records in any manner deemed appropriate without any responsibility.

Article e8

It stipulates that any requirement for presentation of one or more originals or copies of an electronic record is satisfied by the presentation of one electronic record.

Article e9

The date on which an electronic record appears to have been sent by the issuer is deemed to be the date of issuance of that record, as per Article e9. If no other date is apparent, the date of receipt will be deemed to be the date it was sent.

Article e10

Except for transport document, there is no other Article in eUCP covering documents. Article e10 states that if an electronic record does not indicate a date of shipment or despatch, the date of issuance of the electronic record will be the date. If, however, the electronic record bears a notation evidencing the date of shipment, that notation date will be the date of shipment or despatch. A notation showing additional data content need not be separately signed or otherwise authenticated.

Article e11

It deals with the corruption of an electronic record after presentation. As per this Article, the bank receiving an electronic record, which appears to have been corrupted may inform the presenter and may request for its re-presentation. If the bank concerned does not request re-presentation, the time for examination is suspended and resumes when the presenter makes re-presentation and that if the nominated bank is not the confirming bank it must provide the issuing bank and any confirming bank with notice of the request for re-presentation and also of the suspension. If the said electronic record is not re-presented within thirty (30) calendar days, the bank may treat the electronic record as not presented; and any deadlines are not extended.

Article e12

It is a disclaimer of liability clause for presentation of electronic records. It puts no liability on the bank, by checking the apparent authenticity of an electronic record, for the identity of the sender, source of the information, or its complete and unaltered character other than that which is apparent in the electronic record received by the use of commercially acceptable data process for the receipt, authentication and identification of electronic records. (Source: ICC)

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Authors and Affiliations

  • Tarsem Bhogal
    • 1
  • Arun Trivedi
    • 1
  1. 1.LondonUK

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