Electronic Records

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 e11: Transport – Explanation and Examples – CDCS Guide

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Article e11: Transport

Clause: “If an electronic record evidencing transport does not indicate a date of shipment or dispatch or taking in charge or a date the goods were accepted for carriage, the date of issuance of the electronic record will be deemed to be the date of shipment or dispatch or taking in charge or the date the goods were accepted for carriage.”

Explanation: This clause addresses situations where an electronic transport record lacks specific dates for shipment, dispatch, or taking in charge of goods. In such cases, the date when the electronic record itself is issued is used as a substitute for these dates. Essentially, if no other date is mentioned, the issue date of the document is considered the relevant date for transport.

Example: Imagine a shipment of goods where the electronic transport document does not specify when the goods were dispatched. If the document was issued on August 10, 2024, then for all purposes of the transaction, August 10, 2024, will be considered the date of dispatch.

Clause: “However, if the electronic record bears a notation that evidences the date of shipment or dispatch or taking in charge or the date the goods were accepted for carriage, the date of the notation will be deemed to be the date of shipment or dispatch or taking in charge or the date the goods were accepted for carriage.”

Explanation: This clause allows for an exception to the general rule. If the electronic record contains a specific notation that clearly states the date of shipment, dispatch, or taking in charge, then this noted date overrides the issue date of the document. The noted date is then used for all purposes related to transport dates.

Example: Suppose the electronic transport record includes a notation stating “Goods dispatched on August 15, 2024.” Even if the record was issued on August 10, 2024, the date August 15, 2024, as noted on the document, will be used to determine the actual date of dispatch.

Clause: “Such a notation showing additional data content need not be separately signed or otherwise authenticated.”

Explanation: Notations providing additional information, such as dates of shipment or dispatch, do not require separate signatures or authentication to be valid. This clause ensures that the presence of a date notation is sufficient without needing additional verification.

Example: If an electronic transport record has a note indicating “Goods accepted for carriage on August 20, 2024,” this date does not need to be signed or otherwise authenticated separately. The notation itself is sufficient to establish the date of acceptance for carriage.

eUCP Version 2.1: Articles e9 and e10 Explained – CDCS Guide

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Article e9: Originals and Copies

Clause: “Any requirement for presentation of one or more originals or copies of an electronic record is satisfied by the presentation of one electronic record.”

Explanation: Article e9 addresses the handling of electronic records in trade transactions. Traditionally, physical documents such as bills of lading, certificates of origin, or invoices had to be presented in multiple originals or copies. In the electronic format, however, this requirement is streamlined. According to this article, the presentation of a single electronic record fulfills any requirement that would traditionally call for multiple originals or copies.

Example: Imagine a company is shipping goods and needs to present a bill of lading. Under traditional rules, they might have to submit several copies of the bill of lading to different parties involved (e.g., the bank, the consignee, and the customs authorities). With eUCP Article e9, presenting one electronic version of the bill of lading satisfies all these requirements. The electronic document is considered an official and sufficient representation, eliminating the need for multiple physical copies.

Article e10: Date of Issuance

Clause: “An electronic record must provide evidence of its date of issuance.”

Explanation: Article e10 focuses on ensuring that electronic records include clear evidence of when they were issued. This is crucial in trade finance because the timing of documents can impact the validity and execution of transactions. The date of issuance helps in establishing the timeline of the transaction and ensuring that all parties have access to this crucial piece of information.

Example: Consider a situation where a company receives an electronic invoice for payment. According to Article e10, the electronic invoice must contain a date that clearly indicates when it was issued. This allows the payer to verify the timing of the invoice and ensures that any payment terms related to the issuance date are accurately followed. If the invoice is issued on August 1, 2024, the electronic record will include this date, confirming that the invoice was created and sent on that specific day.

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.