An article-by-article analysis of eUCP variant 2.0 and eURC version 1.0 to explain for the new guidelines.
| Definitions | UCP 600 | eUCP Version 2.0 |
|---|---|---|
| Definitions | Where not defined or amended in the eUCP, definitions given in UCP 600 will continue to apply | Where terms are also used in UCP 600, definitions are updated for application to an electronic record |
| Scope | Paper documents (and electronic records if strictly defined, although UCP 600 only provides limited protection) | Electronic records alone or in combination with paper documents |
| Application | UCP 600 | UCP 600 & eUCP Version 2.0 |
| Relationship | UCP 600 | In event of conflict, eUCP prevails |
| Presentation of only paper documents | UCP 600 | UCP 600 |
| Documents examined on their face | Review of data within a document in order to determine that a presentation complies with international standard banking practice and the principles contained in UCP | Electronic records are examined only for the data received and not the reality that such data represents |
| Document | The term suggests format in a paper medium: unless specifically allowed under the terms and conditions of a UCP 600 credit, it is expected that all presentations under such a credit be in a paper format | Adds the term ‘electronic record’ to the meaning | Place for presentation | The place where the documentary credit is available | Extends the phrase to include an electronic address | Data Processing System | Not necessarily used | A computerised or an electronic or any other automated means used to process and manipulate data, initiate an action or respond to data messages or performances in whole or in part | Electronic signature | Not specifically defined: article 3 highlights that ‘a document may be signed by handwriting, facsimile signature, perforated signature, stamp, symbol, or any other mechanical or electronic method of authentication’ | Data attached to an electronic record with the intent of identifying the signer and authenticating the record | Format | Unless specifically stated otherwise, expected to be paper | The protocol by which data is organised, the version of that format, or the shorthand name by which that protocol is recognised and described | Paper document | Unless otherwise stipulated, assumption is that all ‘documents’ are in a paper medium: however, as is often the case with UCP 600, this fundamental assumption is not stated expressly and, instead, the term ‘document’ is used | Refers to a document in a paper medium, the type of document which is expected to be presented under UCP 600 | Authentication | The process by which the validity of the representations and the paper documents containing them are ascertained: under UCP 600, the level of authentication of paper documents is facial | Identifying the person sending a message and the source of the message, and associating the person authenticating with the content of the message authenticated | Goods, Services or Performance | Banks deal with documents and not with goods, services or performance to which the documents may relate | Also addresses electronic records | Notice of completeness | Not applicable | Presentation does not take place until the presenter provides a notice of completeness to the nominated bank, confirming bank, if any, or to the issuing bank | Time for examination | Once presentation is made to an issuing or confirming bank, the time for examination commences | Electronic records may be presented separately and, even if paper documents are presented in one lot, they must be coordinated with the electronic records: the time for the examination of documents does not commence until the notice of completeness is received | Period for examination | Maximum of five banking days following the day of presentation to determine if a presentation is complying | Remains applicable | Approach by the issuing bank to the applicant in order to seek a waiver of discrepancies | UCP 600 sub-article 16 (b) (Discrepant Documents, Waiver and Notice) | Remains applicable | Notice process for discrepant documents | UCP 600 sub-article 16 (b) (Discrepant Documents, Waiver and Notice) | Remains applicable | Disposition of documents in event no instructions received subsequent to notice of refusal | Paper documents can be held or returned | Paper documents can be held or returned | Originals and copies | UCP 600 sub-articles 17 (b) and (c) | Any requirement for an original is satisfied by the presentation of one electronic record: in the event of a requirement for multiple copies, the condition will be fulfilled by presentation of one electronic record | Date of issuance | Requirement for a document to be dated is with respect to the identification of certain dates on transport and insurance documents. In addition, there are expectations that other documents, such as statements or certifications, must contain a date. ISBP 745 goes into more detail as to documentary requirements under UCP 600. Credits may also contain a specific requirement that a document be dated | Effectively dates electronic records, with the result that all such records must be dated: if there is to be any other way of determining the date of issuance then this will be for the eUCP credit itself to determine | Date of shipment or dispatch or taking in charge or a date the goods were accepted for carriage | Contains elaborate rules for determining the date of shipment or dispatch that are individualised according to the type of transport document involved | Date of shipment is the date in the electronic transport record indicating shipment or dispatch or taking in charge or the goods were accepted for carriage. If there is no date indicating shipment or dispatch or taking in charge or goods accepted for carriage, the date of shipment or dispatch is the date of issuance of the electronic transport record unless there is a notation evidencing shipment or dispatch or taking in charge or goods accepted for carriage | Data corruption | No rule for paper documents that are lost or rendered unreadable by a bank after they have been received; most banks have procedures in place that minimise the consequences of such loss and there is no perceived need for such a rule. These procedures involve refusing payment based on discrepancies in the documents that are presented, requesting a substitute document, or indemnifying the applicant for any harm that may result from the lost document | Provides a method by which corrupted data may be re- presented; based on the assumption that all electronic records are replaceable | Disclaimers | Contains several disclaimers that are also relevant to an eUCP credit | Additionally, disclaims banks’ liability for any divergence from the realities represented in authenticated electronic records | Force Majeure | States the force majeure events for which a bank assumes no liability or responsibility | Extended to cover the inability of a bank to access a data processing system, or a failure of equipment, software or communications network |
ARTICLE E8—NOTICE OF REFUSAL
The eUCP does not contain any specific rules concerning an approach by the issuing bank to the applicant in order to seek a waiver of discrepancies. In this respect, UCP 600 sub-article 16 (b) (Discrepant Documents, Waiver, and Notice) continues to apply. Furthermore, the notice process as outlined in UCP 600 sub-articles 16 (c) and (d) (Discrepant Documents, Waiver, and Notice) remains applicable.
Additional reasons for refusal under the eUCP.
In addition to the reasons for refusing a presentation under the terms of the credit and UCP 600, the eUCP provides potential further reasons for refusing to honour a presentation. Where applicable, these could include:
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> Wrong format (document unreadable)
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> The electronic record was not presented in the format required by the credit under eUCP
article e5 (Format).
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> Electronic record not authenticated
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> The electronic record was not authenticated under eUCP sub-article e6 (f) (Presentation).
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> External source/hyperlink not accessible (identifying the source)
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> The external source referenced in the presentation was not accessible, except as provided in sub- article e7 (d) (ii).
Disposition of documents.
The return of electronic records creates a problem unparalleled in the paper world. With paper, there exists a unique piece of paper that can be held or returned. In the world of electronic records, the data remains with the bank even after it has been returned. Moreover, the electronic record is not unique because the presenter also has the data in its system even though it
has been presented and, additionally, the beneficiary is likely to have it even though the data may have been sent by a third-person presenter. These considerations are compounded when the data is contained in an external system.
As a result, there is not likely to be any unique value attached to the electronic record, and less reason to place an emphasis on its return or to reinforce these rules with the threat of preclusion. To accommodate these differences, the eUCP provides that the bank need not hold or archive these records indefinitely. Unless the presenter provides other instructions within 30 calendar days from the date that the notice of refusal is given, the bank shall return any paper documents and ‘may dispose of the electronic records in any manner deemed appropriate without any responsibility’. This rule places the onus of communicating instructions regarding the treatment of electronic records on the presenter.
Deadline.
This article departs from the approach of UCP 600 article 16 (Discrepant Documents, Waiver and Notice) in that UCP 600 does not provide an express deadline for action, although banks are free under UCP 600 to return paper documents at any time where sub-article 16 (c) (iii) (a) or (b) has been used as the status for the documents. As a result, it would be good practice, although not absolutely necessary, for a bank to include in its notice of refusal a statement with regard to eUCP article e8 and its policy with regard to the disposition of documents. Such a statement could provide that: “Pursuant to eUCP article e8, we will return all electronic records to the electronic address, and will delete all records from our systems other than those related to the failure to comply, without responsibility on our part unless you provide us with instructions to the contrary within 30 calendar days from the date of this notice.”
Under UCP 600, the ‘presenter’ will normally be one entityy, either the beneficiary or its agent or
a nominated bank. Unless the issuing bank permits separate presentations of paper documents under the eUCP, there will only be one presenter of paper documents under the eUCP as well.
However, with respect to electronic records, there may be multiple presenters. The eUCP does not require that the electronic records be returned at all, and if the issuing bank elects to return them after non-receipt of disposal instructions, the bank, at its option, may return them either to the presenter or to the beneficiary. If the beneficiary wishes to have the electronic records returned to a specific person other than the presenter, it should ensure it is so stated in any notice of completeness or in a timely response to the notice of refusal.
Disposal of data.
Decisions on the appropriate method of disposal of electronic records may be contingent upon the data itself and the circumstances. As used in this article, ‘dispose of’ does not necessarily denote ‘destroy’ or ‘delete’. In fact, such terms may not actually be feasible with an electronic record. In formulating its policy regarding the disposition of electronic records, a bank should take into account matters of proof in the event that its decision to refuse payment is challenged. Where a bank has dishonoured, it would be well advised to retain proof of the non-conformity of the presentation. Much like the paper environment where banks usually keep copies of paper documents, banks may also choose to archive the electronic records received.
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