eUCP Version 2.1 Articles Explanation

eUCP Version 2.1 Article e7: Examination of Electronic Records – CDCS Guide

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Article e7: Examination

a. i. The period for the examination of documents commences on the banking day following the day on which the notice of completeness is received by the nominated bank, confirming bank, if any, or by the issuing bank, where a presentation is made directly.

Explanation: This clause specifies when the examination of documents should start. The process begins the day after the bank receives the notice of completeness. This notice indicates that the documents presented under a letter of credit (LC) are complete and in order.

Example: If the notice of completeness is received on Monday, the examination period begins on Tuesday. If documents are presented directly to the issuing bank, this rule still applies.

ii. If the time for presentation of documents or the notice of completeness is extended, as provided in sub-article e6 (e) (i), the time for the examination of documents commences on the next banking day following the day on which the bank to which presentation is to be made is able to receive the notice of completeness, at the place for presentation.

Explanation: If an extension is granted for the presentation of documents or the notice of completeness, the examination period starts the next banking day after the bank can receive the notice at the presentation place.

Example: If an extension is granted until Wednesday and the notice is received on that day, the examination period starts on Thursday, the next banking day.

b. i. If an electronic record contains a hyperlink to an external system or a presentation indicates that the electronic record may be examined by reference to an external system, the electronic record at the hyperlink or the external system shall be deemed to constitute an integral part of the electronic record to be examined.

Explanation: When an electronic record includes a hyperlink or reference to an external system, that external information is considered a part of the electronic record being examined.

Example: A digital invoice includes a link to an external database for detailed transaction information. This linked information must be reviewed as part of the invoice examination.

ii. The failure of the external system to provide access to the required electronic record at the time of examination shall constitute a discrepancy, except as provided in sub-article e7 (d) (ii).

Explanation: If the external system is inaccessible when the record is being examined, it is considered a discrepancy, meaning the documentation is not compliant.

Example: If the external system linked to a shipment’s electronic record is down during the examination, this would be considered a discrepancy unless covered by exceptions outlined in sub-article e7 (d) (ii).

c. The inability of a nominated bank acting on its nomination, a confirming bank, if any, or the issuing bank, to examine an electronic record in a format required by an eUCP credit or, if no format is required, to examine it in the format presented is not a basis for refusal.

Explanation: A bank cannot refuse to process a document simply because it is unable to examine it in the required format, as long as the document meets the credit’s terms.

Example: If a bank is unable to open a file in a specific format but the document’s content is accurate and complete, the bank cannot reject it solely due to format issues.

d. i. The forwarding of electronic records by a nominated bank, whether or not it is acting on its nomination to honour or negotiate, signifies that it has satisfied itself as to the apparent authenticity of the electronic records.

Explanation: When a nominated bank forwards electronic records, it indicates that it has verified the authenticity of these records, regardless of whether it is honoring or negotiating.

Example: A nominated bank that sends electronic records to a confirming or issuing bank confirms that it has checked these records for authenticity.

ii. In the event that a nominated bank determines that a presentation is complying and forwards or makes available those electronic records to the confirming bank or issuing bank, whether or not the nominated bank has honoured or negotiated, an issuing bank or confirming bank must honour or negotiate, or reimburse that nominated bank, even when a specified hyperlink or external system does not allow the issuing bank or confirming bank to examine one or more electronic records that have been made available between the nominated bank and the issuing bank or confirming bank, or between the confirming bank and the issuing bank.

Explanation: If a nominated bank finds a presentation compliant and forwards the records to the confirming or issuing bank, the latter must honor, negotiate, or reimburse the nominated bank even if some records are inaccessible through links or external systems.

Example: If the nominated bank provides all required electronic records but some records are inaccessible due to a broken link, the issuing or confirming bank must still process the payment or reimbursement based on the compliant records.

eUCP Version 2.1 Article e6: Presentation – Detailed Explanation and Examples – CDCS Guide

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Article e6: Presentation

a. i. An eUCP credit must indicate a place for presentation of electronic records.

Explanation: An eUCP credit must specify a location where electronic records can be presented. This ensures that there is a clear and designated place for the electronic documentation to be submitted, facilitating the process of review and acceptance by the relevant parties.

Example: If a credit requires the presentation of electronic records to be made through an online portal, the credit must specify this portal’s address or details in the terms of the credit.

ii. An eUCP credit requiring or allowing presentation of both electronic records and paper documents must, in addition to the place for presentation of the electronic records, also indicate a place for presentation of the paper documents.

Explanation: When a credit involves both electronic and paper documents, it must clearly outline where each type of document should be presented. This avoids confusion and ensures that both types of documents are submitted to the correct locations.

Example: A credit might require electronic records to be submitted through an email system while paper documents need to be sent to a physical address. The credit must specify both the email address and the physical address.

b. Electronic records may be presented separately and need not be presented at the same time.

Explanation: Electronic records do not have to be submitted all at once. They can be presented in parts or at different times, offering flexibility in the submission process.

Example: If a credit requires the submission of multiple electronic documents, they can be sent in separate emails or file uploads over a period of time, as long as they are within the allowed timeframe.

c. i. When one or more electronic records are presented alone or in combination with paper documents, the presenter is responsible for providing a notice of completeness to the nominated bank, confirming bank, if any, or to the issuing bank, where a presentation is made directly. The receipt of the notice of completeness will act as notification that the presentation is complete and that the period for examination of the presentation is to commence.

Explanation: When submitting electronic records, either alone or with paper documents, the presenter must issue a notice of completeness. This notice informs the receiving bank that the submission is complete and starts the clock on the bank’s examination period.

Example: If you submit electronic records to a bank and also send paper documents, you need to send a notice of completeness to the bank to confirm that all required documents have been submitted and to start the review period.

ii. The notice of completeness may be given as an electronic record or paper document and must identify the eUCP credit to which it relates.

Explanation: The notice of completeness can be provided either electronically or on paper and must clearly reference the eUCP credit it pertains to, ensuring it is linked to the correct transaction.

Example: You could send an electronic notice via email or a paper notice via postal service, making sure to include the eUCP credit number or details.

iii. Presentation is deemed not to have been made if the notice of completeness is not received.

Explanation: If the notice of completeness is not sent or received, the presentation is considered incomplete. This means the bank has not officially received the presentation and it will not be processed.

Example: If you fail to send a notice of completeness after submitting electronic records, the bank will not consider your submission valid or complete.

iv. When a nominated bank, whether acting on its nomination or not, forwards or makes available electronic records to a confirming bank or issuing bank, a notice of completeness need not be sent.

Explanation: If a nominated bank forwards electronic records to another bank (confirming or issuing bank), it is not required to send a separate notice of completeness.

Example: If a nominated bank receives electronic records and sends them to the issuing bank, it does not need to provide a notice of completeness to the issuing bank separately.

d. i. Each presentation of an electronic record under an eUCP credit must identify the eUCP credit under which it is presented. This may be by specific reference thereto in the electronic record itself, or in metadata attached or superimposed thereto, or by identification in the covering letter or schedule that accompanies the presentation.

Explanation: Every electronic record must clearly identify the eUCP credit it relates to. This can be done directly in the record, through metadata, or in accompanying documents.

Example: An electronic invoice should include a reference to the eUCP credit number in its content, metadata, or in a cover letter to ensure it is correctly matched with the credit.

ii. Any presentation of an electronic record not so identified may be treated as not received.

Explanation: If an electronic record does not include proper identification of the eUCP credit, it might be considered as not having been received by the bank.

Example: If an electronic document lacks the eUCP credit reference and is sent to the bank, the bank might ignore or reject it because it cannot be properly linked to the credit.

e. i. If the bank to which presentation is to be made is open but its system is unable to receive a transmitted electronic record on the stipulated expiry date and/or the last day for presentation, as the case may be, the bank will be deemed to be closed and the expiry date and/or last day for presentation shall be extended to the next banking day on which such bank is able to receive an electronic record.

Explanation: If a bank is operational but unable to process electronic records on the deadline date, the deadline is extended to the next business day when the bank can receive the records.

Example: If the system failure occurs on the deadline day, and the bank’s system is back online the next day, the deadline for submitting electronic records is extended to that day.

ii. In this event, the nominated bank must provide the confirming bank or issuing bank, if any, with a statement on its covering schedule that the presentation of electronic records was made within the time limits extended in accordance with sub-article e6 (e) (i).

Explanation: The nominated bank must inform the confirming or issuing bank that the presentation was made within the extended time limit due to the system issue.

Example: If the presentation deadline is extended, the nominated bank should include a statement in its covering documentation indicating that the records were submitted within the extended timeframe.

iii. If the only electronic record remaining to be presented is the notice of completeness, it may be given by telecommunication or by paper document and will be deemed timely, provided that it is sent before the bank is able to receive an electronic record.

Explanation: If the only document pending is the notice of completeness, it can be sent by telecommunication or paper and will be considered timely if sent before the bank’s system is back online.

Example: If a notice of completeness is the last document required and the bank’s system was down, sending it by fax or postal mail before the system is operational will still meet the deadline requirements.

f. An electronic record that cannot be authenticated is deemed not to have been presented.

Explanation: If an electronic record cannot be verified or authenticated, it will be considered as if it was never presented.

Example: If an electronic document is corrupted or its authenticity cannot be confirmed due to technical issues, it will be regarded as not having been submitted.

eUCP Version 2.1: Articles e4 & e5 Explained – CDCS Guide

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Article e4: Electronic records and paper documents v. goods, services or performance

Clause: “Banks do not deal with the goods, services or performance to which an electronic record or paper document may relate.”

Explanation: Article e4 establishes that banks involved in handling electronic records or paper documents under an eUCP credit are not responsible for the actual goods, services, or performance that these documents may refer to. This means that banks are not obligated to verify or deal with the actual delivery, quality, or performance related to the goods or services described in the documents. Their role is strictly limited to managing and processing the documents themselves.

Example: Suppose an electronic record under a letter of credit describes a shipment of electronics. The bank’s responsibility is to ensure that the electronic record complies with the terms of the credit and that it is properly presented. The bank does not inspect the electronics or ensure their quality or performance. If the goods are defective or not delivered as promised, the bank is not liable or responsible for these issues.

Article e5: Format

Clause: “An eUCP credit must indicate the format of each electronic record. If the format of an electronic record is not indicated, it may be presented in any format.”

Explanation: Article e5 requires that the format of each electronic record be clearly specified in the eUCP credit. This means that if a letter of credit involves electronic records, the credit must detail how these records should be formatted. If the credit does not specify a format, then the electronic records can be presented in any format. This provision helps in standardizing the presentation of electronic records and provides flexibility if no specific format is required.

Example: Imagine a letter of credit for an international trade transaction specifies that an electronic invoice must be presented in PDF format. If the letter of credit explicitly mentions this requirement, then the electronic invoice must be in PDF. However, if the credit does not specify a format, the invoice could be presented in other formats such as DOCX, XLSX, or any other format. This flexibility helps accommodate various systems and practices used by different parties.

eUCP Version 2.1 Article e3: Definitions – CDCS Guide

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Article e3: Definitions

Clause a. Where the following terms are used in the UCP, for the purpose of applying the UCP to an electronic record presented under an eUCP credit, the term:

i. “Appear on their face and the like shall apply to examination of the data content of an electronic record.”

Explanation: This clause means that when the UCP rules mention terms like “appear on their face,” it refers to examining the actual data content of an electronic record, just as you would inspect a paper document.

Example: If an electronic invoice is presented under an eUCP credit, “appear on their face” would involve checking the data within the electronic invoice to ensure it meets the terms of the credit, similar to verifying a paper invoice.

ii. “Document shall include an electronic record.”

Explanation: In this context, the term “document” isn’t limited to physical papers but also covers electronic records.

Example: An electronic bill of lading is considered a “document” under eUCP, just like a traditional paper bill of lading would be.

iii. “Place for presentation of an electronic record means an electronic address of a data processing system.”

Explanation: The “place for presentation” for electronic records is not a physical location but an electronic address where the data is sent.

Example: If a bank requires an electronic invoice to be sent to its email address or a specific online portal, that email address or portal is the “place for presentation.”

iv. “Presenter means the beneficiary, or any party acting on behalf of the beneficiary who makes a presentation to a nominated bank, confirming bank, if any, or to the issuing bank directly.”

Explanation: The “presenter” is the individual or entity, including the beneficiary or their representative, who submits the electronic record to the bank.

Example: If a company (the beneficiary) submits an electronic shipping document to its bank, the company or its representative is considered the “presenter.”

v. “Sign and the like shall include an electronic signature.”

Explanation: The act of signing a document also includes using an electronic signature in the context of electronic records.

Example: An electronic signature on an electronic letter of credit serves the same purpose as a handwritten signature on a paper letter of credit.

vi. “Superimposed, notation or stamped means data content whose supplementary character is apparent in an electronic record.”

Explanation: This refers to any additional data or markings that are visible and can be identified within an electronic record.

Example: An electronic record might include a digital watermark or annotation that clearly indicates additional information, similar to a stamped note on a paper document.

Clause b. The following terms used in the eUCP shall have the following meaning:

i. “Data corruption means any distortion or loss of data that renders the electronic record, as it was presented, unreadable in whole or in part.”

Explanation: Data corruption refers to errors or alterations that make the electronic record partially or completely unreadable.

Example: If an electronic document is transmitted but gets corrupted during transfer, causing some of its data to be unreadable, this would be considered data corruption.

ii. “Data processing system means a computerized 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.”

Explanation: This term encompasses any system, whether it’s a computer, electronic device, or automated system, used to handle and act upon data.

Example: An electronic banking system that processes electronic invoices and initiates payments is a data processing system.

iii. “Electronic record, including an electronic transferable record, means data created, generated, sent, communicated, received or stored by electronic means, including, where appropriate, all information logically associated with or otherwise linked together so as to become part of the record, whether generated contemporaneously or not, that is: a) capable of being authenticated as to the apparent identity of a sender and the apparent source of the data contained in it, and as to whether it has remained complete and unaltered, and b) capable of being examined for compliance with the terms and conditions of the eUCP credit.”

Explanation: An electronic record is any data created or managed electronically, which must be authentic and complete, and can be reviewed to ensure it meets eUCP credit terms.

Example: An electronic bill of lading must be capable of being verified for authenticity and checked to confirm it adheres to the terms of the credit.

iv. “Electronic signature means 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.”

Explanation: An electronic signature is a digital method used to authenticate and verify the identity of the person signing the electronic record.

Example: A scanned image of a handwritten signature on a PDF or a digital signature created using a secure signing platform are both examples of electronic signatures.

v. “Electronic transferable record means an electronic record that contains the information that would be required in the equivalent paper document, such as a negotiable bill of lading or an assignable insurance document.”

Explanation: An electronic transferable record holds the same information as a traditional paper document and can be transferred or assigned electronically.

Example: An electronic bill of lading that serves the same function as a traditional paper bill of lading is an example of an electronic transferable record.

vi. “Format means the data organization in which the electronic record is expressed or to which it refers.”

Explanation: The “format” refers to the structure or organization of the data in the electronic record.

Example: A spreadsheet with rows and columns is a format for organizing data, just as a PDF document format is another way of structuring electronic records.

vii. “Paper document means a document in a paper form.”

Explanation: This simply refers to traditional, physical documents as opposed to electronic ones.

Example: A physical shipping receipt or a paper-based invoice is a paper document.

viii. “Received means when an electronic record enters a data processing system, at the place for presentation indicated in the eUCP credit, in a format capable of being accepted by that system. Any acknowledgment of receipt generated by that system does not imply that the electronic record has been viewed, examined, accepted or refused under an eUCP credit.”

Explanation: “Received” refers to the point when an electronic record arrives at the specified electronic address and in a format that the system can handle. An acknowledgment of receipt doesn’t mean the record has been reviewed or accepted.

Example: If an electronic document is sent to a bank’s electronic portal and the system confirms receipt, it simply means the document was delivered but not necessarily processed or accepted.

ix. “Re-present or re-presented means to substitute or replace an electronic record already presented.”

Explanation: This term means replacing or updating an electronic record that has already been submitted.

Example: If an initial electronic invoice was rejected due to errors, resubmitting a corrected version of that invoice would be considered re-presenting the record.

eUCP Version 2.1 Article e2: Relationship of the eUCP to the UCP – CDCS Guide

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Article e2: Relationship of the eUCP to the UCP

a. “An eUCP credit is also subject to the UCP without express incorporation of the UCP.”

Explanation:
This clause establishes that an electronic letter of credit (eUCP) automatically adheres to the Uniform Customs and Practice for Documentary Credits (UCP) rules, even if the UCP is not explicitly mentioned in the terms of the eUCP. Essentially, if an eUCP credit does not specify otherwise, it is implicitly governed by the UCP.

Example:
Imagine a company, ABC Corp., issues an eUCP credit to XYZ Ltd. without explicitly stating that UCP rules apply. Despite the absence of an explicit reference, the UCP rules still govern the credit’s execution. For instance, if the eUCP credit requires a specific form of documentary evidence, the rules for handling discrepancies, payment, and other relevant aspects will follow UCP guidelines by default.

b. “Where the eUCP applies, its provisions shall prevail to the extent that they would produce a result different from the application of the UCP.”

Explanation:
This clause clarifies that when both eUCP and UCP are applicable, the eUCP rules take precedence if they lead to a different outcome compared to the UCP. This ensures that the unique aspects of electronic documentation and processes under eUCP are prioritized over the traditional UCP rules when discrepancies arise.

Example:
Suppose an eUCP credit specifies that digital signatures are sufficient for document authentication, while the UCP requires physical signatures. In this case, the eUCP provision for digital signatures will prevail, overriding the UCP’s requirement for physical signatures. This prevents conflicts between electronic and traditional practices and ensures consistency with eUCP standards.

c. “If an eUCP credit allows the beneficiary to choose between presentation of paper documents or electronic records and it chooses to present only paper documents, the UCP alone shall apply to that presentation. If only paper documents are permitted under an eUCP credit, the UCP alone shall apply.”

Explanation:
This clause addresses scenarios where an eUCP credit provides the beneficiary with the option to submit either paper or electronic documents. If the beneficiary opts to present paper documents, only the UCP rules apply to that presentation. Similarly, if the eUCP credit specifies that only paper documents are acceptable, then the UCP governs the entire transaction. This provision ensures clarity in situations where traditional document handling rules are preferred over electronic processes.

Example:
Consider a letter of credit under eUCP where the beneficiary can choose between submitting digital invoices or paper invoices. If the beneficiary decides to present paper invoices, the transaction will follow UCP rules for handling paper documents. If the credit strictly allows only paper documents and no digital submissions, the UCP rules will govern every aspect of the credit.

eUCP Version 2 Article e1: Scope and Application Explained – CDCS Guide

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Article e1: Scope of the Uniform Customs and Practice for Documentary Credits (UCP 600) Supplement for Electronic Presentations (“eUCP”)

a. “The eUCP supplements the Uniform Customs and Practice for Documentary Credits (2007 Revision, ICC Publication No. 600) (“UCP”) in order to accommodate presentation of electronic records alone or in combination with paper documents.”

Explanation:
This clause establishes that the eUCP is an addition to the existing rules outlined in UCP 600. It is designed to handle situations where electronic records are presented either by themselves or together with physical documents. Essentially, it extends the traditional UCP 600 framework to cover electronic documentation.

Example:
Suppose a documentary credit traditionally required paper documents for presentation. Under eUCP, a company could now present its shipping documents electronically via a secure online platform, as long as the credit allows for electronic submissions in conjunction with or instead of paper documents.

b. “The eUCP shall apply where the credit indicates that it is subject to the eUCP (“eUCP credit”).”

Explanation:
This clause specifies that the eUCP rules will be applicable only if the credit explicitly states that it is governed by the eUCP. This means that the use of eUCP is not automatic; it must be clearly indicated in the credit terms.

Example:
If a letter of credit (LC) includes a statement such as “Subject to eUCP Version 2.1,” then the provisions of eUCP apply. Without this indication, the presentation of electronic records would not be governed by eUCP.

c. “This version is Version 2.1. An eUCP credit must indicate the applicable version of the eUCP. If not indicated, it is subject to the latest version in effect on the date the eUCP credit is issued or, if made subject to the eUCP by an amendment accepted by the beneficiary, the date of that amendment.”

Explanation:
This clause addresses the specific version of eUCP that applies to the credit. If the version is not stated, the latest version at the time of issuance or amendment will apply. This ensures that all parties are aware of which rules govern the credit, avoiding confusion about which version of eUCP applies.

Example:
If an LC does not state “eUCP Version 2.1” but was issued on January 1, 2024, it would be governed by the latest eUCP version available as of that date. If an amendment indicating eUCP Version 2.1 was accepted on February 1, 2024, then Version 2.1 applies to the credit.

d. “An eUCP credit must indicate the physical location of the issuing bank. In addition, it must also indicate the physical location of any nominated bank and, if different to the nominated bank, the physical location of the confirming bank, if any, when such location is known to the issuing bank at the time of issuance. If the physical location of any nominated bank and/or confirming bank is not indicated in the credit, such bank must indicate its physical location to the beneficiary no later than the time of advising or confirming the credit or, in the case of a credit available with any bank, and where another bank willing to act on the nomination to honour or negotiate is not the advising or confirming bank, at the time of agreeing to act on its nomination.”

Explanation:
This clause requires that an eUCP credit specifies the physical locations of the issuing bank, nominated bank, and confirming bank. If the credit does not include these locations, the banks involved must provide this information to the beneficiary by certain deadlines. This requirement ensures transparency and clarity regarding the locations of the involved parties.

Example:
If an LC issued under eUCP does not state the location of the issuing bank, the issuing bank must inform the beneficiary of its location when advising or confirming the credit. Similarly, if the nominated bank or confirming bank’s locations are not mentioned in the credit, these banks must provide their locations to the beneficiary as soon as they confirm or advise the credit.