CDCS

eUCP Version 2.1 Article e14: Force Majeure Clauses Explained – CDCS Guide

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Article e14: Force Majeure

“A bank assumes no liability or responsibility for the consequences arising out of the interruption of its business, including but not limited to its inability to access a data processing system, or a failure of equipment, software or communications network, caused by Acts of God, riots, civil commotions, insurrections, wars, acts of terrorism, cyberattacks, or by any strikes or lockouts or any other causes, including failure of equipment, software or communications networks, beyond its control.”

Explanation and Examples

1. “A bank assumes no liability or responsibility for the consequences arising out of the interruption of its business”

  • Explanation: This clause means that if a bank’s operations are disrupted, it will not be held responsible for any negative outcomes that result from such interruptions. This protection is crucial for banks, as their operations are highly sensitive to disruptions.
  • Example: Suppose a bank is unable to process transactions due to an unexpected power outage. According to this clause, the bank would not be liable for any issues that arise from the inability to complete transactions during the outage.

2. “Including but not limited to its inability to access a data processing system”

  • Explanation: This phrase extends the bank’s liability protection to situations where it cannot access its data systems, which are critical for its operations.
  • Example: If a bank’s data processing system is offline due to a cyberattack, and the bank is unable to provide services such as account management or fund transfers, the bank will not be liable for the resulting inconveniences or losses.

3. “Or a failure of equipment, software or communications network”

  • Explanation: This clause covers any failures in the bank’s equipment, software, or communications infrastructure, which could impact its ability to perform its functions.
  • Example: If a bank’s server crashes, preventing customers from accessing their accounts online, the bank is not responsible for any issues or losses that occur as a result of this failure.

4. “Caused by Acts of God”

  • Explanation: Acts of God refer to natural events that are beyond human control, such as natural disasters. The bank is not liable for disruptions caused by these events.
  • Example: During a major earthquake, if a bank’s operations are disrupted due to damage to its facilities, it will not be held liable for any inconvenience or losses experienced by customers.

5. “Riots, civil commotions, insurrections, wars, acts of terrorism”

  • Explanation: This clause includes various forms of social and political unrest that could disrupt banking operations. The bank is not responsible for issues arising from these events.
  • Example: If a bank’s services are interrupted due to a war or a riot near its branch, it will not be liable for any delays or losses that customers might face as a result.

6. “Cyberattacks”

  • Explanation: This covers attacks on the bank’s digital systems, such as hacking or malware, which can disrupt services. The bank will not be held liable for issues resulting from these attacks.
  • Example: If a bank’s systems are compromised due to a cyberattack, causing a temporary loss of online banking services, the bank is not responsible for any resulting financial losses or service disruptions.

7. “Or by any strikes or lockouts”

  • Explanation: This part addresses labor disputes that could affect the bank’s operations. If a strike or lockout impacts the bank, it will not be liable for the consequences.
  • Example: If bank employees go on strike and the bank cannot process transactions or provide customer service, the bank will not be held liable for any disruptions or financial losses incurred by customers.

8. “Or any other causes, including failure of equipment, software or communications networks, beyond its control”

  • Explanation: This clause is a catch-all for any other unforeseen or uncontrollable events that disrupt the bank’s operations, not explicitly listed in the previous clauses.
  • Example: If a sudden and severe network outage prevents the bank from processing transactions, and this issue is beyond the bank’s control, the bank will not be responsible for any problems resulting from this outage.

eUCP Version 2.1 Article e13: Additional Disclaimer of Liability for Electronic Records – CDCS Guide

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Article e13: Additional Disclaimer of Liability for Presentation of Electronic Records under eUCP

a. By satisfying itself as to the apparent authenticity of an electronic record, a bank assumes no liability 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 a data processing system for the receipt, authentication, and identification of electronic records.

Explanation: This clause outlines that a bank is responsible for verifying the apparent authenticity of an electronic record it receives. However, the bank’s responsibility does not extend beyond the visible aspects of the record. In other words, the bank does not need to verify the identity of the sender, the origin of the information, or ensure that the electronic record has not been altered beyond what is apparent in the record itself. The bank’s responsibility is limited to what it can see and verify using its data processing systems.

Example: Suppose a bank receives an electronic invoice from a supplier. The bank checks the invoice’s authenticity based on its content and the sender’s details visible in the record. However, the bank does not investigate the actual identity of the person who sent the invoice or verify if the invoice was altered before reaching them. As long as the invoice appears authentic within their data processing system, the bank accepts it at face value and assumes no further liability regarding the sender’s identity or the record’s integrity.

b. A bank assumes no liability or responsibility for the consequences arising out of the unavailability of a data processing system other than its own.

Explanation: This clause states that a bank is not liable for issues or consequences that arise from the unavailability or malfunction of data processing systems that are not under its control. In essence, the bank is only responsible for its own systems and cannot be held accountable for problems caused by systems operated by other entities.

Example: Imagine a situation where a bank is supposed to process an electronic record from a transaction partner. If the transaction partner’s data processing system is down and the record cannot be transmitted or processed as expected, the bank is not responsible for this issue. The bank’s liability is confined to its own systems and operations. If the bank’s system is functioning properly, it cannot be held accountable for failures or issues that occur because of the partner’s system being unavailable.

eUCP Version 2.1 Article e12: Handling Data Corruption of Electronic Records – CDCS Guide

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Article e12: Data Corruption of an Electronic Record

a. “If an electronic record that has been received by a nominated bank acting on its nomination or not, confirming bank, if any, or the issuing bank, appears to have been affected by a data corruption, the bank may inform the presenter and may request it to be re-presented.”

Explanation: This clause addresses the scenario where an electronic record, such as a digital document related to a letter of credit, becomes corrupted or otherwise compromised during its transmission or receipt. If the nominated bank, confirming bank, or issuing bank detects such data corruption, they have the right to notify the party who presented the record. The bank can then request that the presenter provide a new, uncorrupted version of the electronic record.

Example: Imagine a nominated bank receives an electronic bill of lading from the presenter, but upon review, it is found that some data is garbled due to a transmission error. The bank can notify the presenter of this issue and ask for a fresh copy of the electronic bill of lading to be sent. This ensures that the bank can process the document correctly and without errors.

b. If a bank makes such a request:

i. “the time for examination is suspended and resumes when the electronic record is re-presented;”

Explanation: When a bank requests a re-presentation of an electronic record due to data corruption, the period allocated for examining the document is temporarily halted. This means the bank does not count the time spent waiting for the re-presented record against the presentation deadline. The examination time clock only resumes once the corrected document is received.

Example: Suppose the original electronic record was supposed to be examined within 10 days. If the bank requests a re-presentation on the 5th day due to data corruption, the remaining 5 days for examination will pause until the new record is received. If the new record arrives after 3 days, the bank then has 5 days from the receipt of the new document to complete its examination.

ii. “if the nominated bank is not a confirming bank, it must provide any confirming bank and the issuing bank with notice of the request for the electronic record to be re-presented and inform it of the suspension;”

Explanation: If the nominated bank is not acting as a confirming bank, it is responsible for informing both any confirming bank involved and the issuing bank about the request for re-presentation and the suspension of the examination period. This ensures all relevant parties are aware of the situation and any changes to the timeline.

Example: If a nominated bank discovers data corruption and requests a re-presentation of the document, and it is not a confirming bank, it must notify the confirming bank and the issuing bank about the corruption issue and the resulting pause in the examination period. This keeps everyone in the loop and avoids confusion or delays.

iii. “if the same electronic record is not re-presented within 30 calendar days, or on or before the expiry date and/or last day for presentation, whichever occurs first, the bank may treat the electronic record as not presented.”

Explanation: Should the presenter fail to provide the corrected electronic record within 30 calendar days or before the expiration of the presentation deadline (whichever is sooner), the bank has the right to consider the electronic record as not having been presented. This means that the record would be treated as though it was never submitted, potentially affecting the processing of the related transaction.

Example: If the presentation deadline for a document is 15 days, but the presenter fails to send the corrected electronic record within this period or within 30 days of the original request, the bank can disregard the document as though it was never received. This ensures that the transaction remains on schedule and maintains the integrity of the process.

eUCP Version 2.1 Article e8: Notice of Refusal Explained – CDCS Guide

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Article e8: Notice of Refusal

“If a nominated bank acting on its nomination, a confirming bank, if any, or the issuing bank, provides a notice of refusal of a presentation which includes electronic records and does not receive instructions from the party to which notice of refusal is given for the disposition of the electronic records within 30 calendar days from the date the notice of refusal is given, the bank shall return any paper documents not previously returned to that party, but may dispose of the electronic records in any manner deemed appropriate without any responsibility.”

Explanation and Example

Clause: “If a nominated bank acting on its nomination, a confirming bank, if any, or the issuing bank, provides a notice of refusal of a presentation which includes electronic records”

Explanation: This clause refers to a situation where a bank involved in the letter of credit process (either a nominated bank, a confirming bank, or the issuing bank) issues a notice of refusal. This refusal pertains to a presentation made under the letter of credit that includes electronic records.

Example: Imagine a scenario where a nominated bank receives a presentation from the beneficiary, which includes both electronic records and paper documents. If the bank finds issues with the presentation and decides to refuse it, it must notify the beneficiary of this refusal.

Clause: “and does not receive instructions from the party to which notice of refusal is given for the disposition of the electronic records within 30 calendar days from the date the notice of refusal is given”

Explanation: Once the bank has issued the notice of refusal, it waits for instructions from the party (usually the beneficiary or the presenting party) on how to handle the electronic records. If no instructions are provided within 30 calendar days from the date of the notice, the bank will proceed according to the article’s provisions.

Example: The nominated bank sends a notice of refusal to the beneficiary on January 1st. If the beneficiary does not respond with instructions on how to handle the electronic records by January 31st, the bank will take action as described in the next part of the article.

Clause: “the bank shall return any paper documents not previously returned to that party”

Explanation: The bank is required to return any physical paper documents that were part of the presentation and have not yet been returned to the presenting party. This ensures that the presenting party receives all physical documents related to the refused presentation.

Example: If the presentation included a shipment invoice and a bill of lading, and these paper documents were not yet returned to the beneficiary after the refusal, the bank must send them back once the 30-day period has elapsed.

Clause: “but may dispose of the electronic records in any manner deemed appropriate without any responsibility”

Explanation: For the electronic records, if the presenting party does not provide instructions within the 30-day period, the bank is free to handle the electronic records as it sees fit. The bank does not bear any responsibility for how these records are disposed of.

Example: Suppose the bank receives no instructions from the beneficiary on what to do with the electronic records after 30 days. The bank might choose to delete or archive these records according to its policies. The bank is not held liable for any consequences arising from its disposal of the electronic records.

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.