Electronic supplement to documentary credit rules on the way
 |
| Whatever form it takes - it's all about money |
Paris, 30 July 2001 - The ICC's universally used rules on documentary credits, UCP 500, will soon be updated with a supplement to be used for electronic (or part electronic) document presentations.
The supplement, entitled the UCP Supplement for Electronic Presentation (eUCP for short) will be voted on by the ICC Banking Commission at its meeting in November.
The eUCP, several pages in length, covers items such as the relationship of the eUCP to UCP 500, electronic formats for electronic documents, amendments, place of presentation and notice of dishonour and preclusion.
Writing in this issue of Documentary Credits Insight, the ICC's best-selling quarterly on letters of credit, Bill Cameron of CIBC in Toronto, Canada, warns that "electronic shipping records, customs clearance and banking are upon us and we must adapt". He adds: "The
one option that isn't open to us is to do nothing."
Cameron goes on to explain that the new supplement is an addition to, and not an amendment of, the UCP 500 and that, if they wish to use it, the parties will have to be specifically incorporate the supplement in their credit agreements. To have it otherwise "would open the door for unanticipated electronic presentations when the parties and financial institutions may not be in a position to handle them," Cameron says.
A considerable part of the new eUCP is made up of definitions. Terms such as "original documents", "appears on its face" and "signed", for example, have quite different meanings in the electronic world than in the paper world. The new eUCP tries to delineate these differences.
One important definition is for the term "electronic record", which the current draft of the eUCP defines as "a record created, generated, sent, communicated, received, or stored by electronic means". Electronic records, in the supplement, consist of those electronic documents received to authenticate a letter of credit.
While the eUCP text is still undergoing change, ICC observers are optimistic it will be approved in November, and that it will come into force in June 2002.
Writes Cameron: "I believe that development of the supplement is a critical step for the financial services industry and that it will keep UCP relevant for the emerging ways that trade is being facilitated."
For more information on eUCP and other timely subjects, subscribe to Documentary Credits Insight. Click here to go to the ICC bookstore, then click on the Documentary Credits Insight icon.