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 E12—DATA CORRUPTION OF AN ELECTRONIC RECORD
There is no rule in UCP 600 for paper documents that are lost or rendered unreadable by a bank after they have been received. Because most banks have procedures in place that minimise the consequences of such loss, there is no perceived need for such a rule. These procedures involve refusing payment based on discrepancies in the documents that are present, requesting a substitute document, or indemnifying the applicant for any harm that may result from the lost document.
While this works in the paper world owing to an understanding of the risks, there is not yet a similar comprehension in the electronic world.
This article offers a method by which corrupted data may be represented. A similarity can be recognized with the paper world, in that it is not unusual to approach the presenter for substitute paper documents. The process outlined by this article should prove beneficial to all parties, bearing in mind that it supports an efficient data substitution method. The advantage of the article is that it operates without regard to fault or negligence and avoids entirely the difficult questions of liability and proof inherent in such concepts. As a result, it balances the interests of the bank and the presenter while extending the obligation of the bank and imposing a limited additional duty on the presenter in order to achieve a practical and relatively straightforward solution to an otherwise potentially burdensome problem. It is worth noting that the provisions of this article are a matter of recommendation and optional only.
This approach need not necessarily be utilized by a bank, and a bank remains free to take any other or additional measures they may consider to be necessary in order to mitigate any perceived losses due to the corruption of data while the record is within its control. If a bank elects to exercise its rights under this article, it must deliver a request to the presenter and give notice to any other bank that is obligated under the credit. In addition, it should notify the beneficiary if the presenter is not the beneficiary. The notice to the presenter suspends the time for examination, which resumes when the bank receives the substituted data. The replacement of the data is not a new presentation and any deadlines are calculated from the original presentation date, which will have taken place on the receipt of the notice of completeness. This article is based on the assumption that all electronic records are replaceable.
It must be clearly noted that this article only applies to the data corruption of an electronic record subsequent to presentation. Should a problem exist with an electronic record before presentation, this can only be the responsibility of the presenter to fix.
The eUCP does not define ‘corruption’. The term is intended to encompass any distortion or loss of data that renders the electronic record as it was presented unreadable in whole or part due to the data having become scrambled in an unrecoverable manner.
Although the eUCP permits mixed presentations of paper documents and electronic records, this article obviously relates only to electronic records and not the loss or destruction of paper documents.
By its terms, this article is available to any bank nominated in an eUCP credit. However, in the event that a bank other than the issuing or confirming bank invokes the approach, the article
requires that notice of the request for a substituted document be given to the issuing bank and any confirming bank. Although a nominated bank is not obligated to examine documents or to act pursuant to its nomination under UCP 600 sub-article 12 (a) (Nomination), the election to invoke this eUCP article would signify an election to so act and require that the bank examine the documents under the rules of UCP 600 and act according to its nomination should they comply. Otherwise, the nominated bank will be responsible to the presenter for the lost data.
This article uses the term ‘re-presented’. As stated in eUCP sub-article 3 (b) (viii) this term
means ‘to substitute or replace an electronic record already presented.’ The term is also used in documentary credit practice to characterise the action of the beneficiary in making a subsequent presentation to cure a discrepancy in a prior presentation. The two actions should not be confused. Under the eUCP, the re-presentation is merely the replacement of a document already presented and its impact relates back to when it was originally presented; whereas when a non- conforming presentation is being cured by re-presentation, it takes effect as of the time of receipt of the re-presentation. This article indicates that the request for replacement is to be sent to the presenter of the electronic record. In order to reflect good practice, it would also be optimal, in cases where the presenter is not the beneficiary, for notice to also be given to the beneficiary. This may help to accelerate matters to the benefit of all.
Method for re-presentation request.
Although this article does not expressly state when or how the request for re-presentation be made, good practice in light of UCP 600 sub-article 16 (d) (Discrepant Documents, Waiver and Notice) would suggest that the request be made in the same manner as a notice of refusal, namely by telecommunication if available, and, if not, by other expeditious means and without delay once the corruption is discovered.
Time for examination.
Invocation of this article suspends the time for examination and giving any notice of refusal under UCP 600 articles 14 (Standard for Examination of Documents) and 16 (Discrepant Documents, Waiver and Notice). Although the corruption of the data occurred when the electronic record was in the control of the bank, a request for replacement under this article has severe consequences for the beneficiary if the record is not replaced. The article provides that the failure to replace data within 30 calendar days after a request has been made is deemed to be a failure to present the electronic record. Because of the seriousness of this consequence for the beneficiary, the time period is sufficiently reasonable to permit replacement, and banks should be cautious about reducing this period, which may raise questions about its reasonableness.