eUCP is Here!

The ICC Banking Commission has approved the Supplement to the Uniform Customs and Practice for Documentary Credits for Electronic Presentation (‘eUCP’) by a vote of 63 to 3 at its November 2001 meeting in Frankfurt.

To allow bankers and traders to familiarize themselves with its principles, eUCP will not come into force until 31 March 2002. In January, ICC Publishing will put on sale a full text of the new rules.

The eUCP has been designed to accommodate presentation of electronic records, alone or in combination with paper documents.  ‘All the articles of eUCP are consistent with the UCP. But they also take account of the fact that in the electronic world things are often done differently from the paper-based world,’ said Ron Katz ICC Banking expert.

‘We are calling the rules eUCP. It is important to stress that they supplement the UCP rules and in no way replace them. They are to be used in conjunction with UCP 500,’ Katz added.

ICC's rules governing documentary credits, the Uniform Customs and Practice for Documentary Credits, were first developed more than sixty years ago. The current version, issued in 1993, is known as UCP 500.

The rules themselves state: ‘Where the eUCP applies, its provisions shall prevail to the extent that they would produce a result different from the application of the UCP.’

Mr Katz noted that the parties wishing to use eUCP will specifically have to incorporate it into the credit. However, a credit subject to the eUCP is also subject to the UCP without the express incorporation of the UCP.

The eUCP contains a number of definitions of terms that have different meanings in the electronic and paper-based contexts. Terms such ‘appears on its face’, ‘place for presentation,’ and ‘sign’ - all common features of the UCP - are redefined to take account of the electronic environment.

According to Mr Katz, the eUCP fills a big gap in the market.