As many are aware, international trade relies on documentary credit instruments such as letters of credit, which serve as the backbone of transactions.
The Uniform Customs and Practice for Documentary Credits (UCP) has been the governing body for letter of credit transactions worldwide for over 85 years under the International Chamber of Commerce.
The UCP 600 introduced provisions in transport, insurance, and compliance to shape letter of credit transactions including an article dedicated to “Definitions,” aiming to provide clarity on key terms.
Since its inception, the UCP has remained a vital component of international trade, with professionals such as bankers, traders, lawyers, transporters, and academics consulting UCP 600 on a daily basis for the letter of credit transactions.
The eUCP merely acts as a supplementary and digital counterpart to UCP 600, specifically tailored for digital transactions offering a faster and safer method for financing trade, aligning with the ICC Banking Commission’s objective of promoting a paperless business environment.
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The ICC has just released the eUCP version 2.1 which is largely based on the discussions held in October 2022 during the Plenary Session in Paris of the ICC Banking Commission.
The Banking Commission SteerCo established a Working Group with the task of aligning the eUCP with the UNCITRAL Model Law on Electronic Transferable Records (MLETR) in respect of issues pertaining to electronic transferable records.
The ICC has advised that version 2.1 was neither a revision nor an update of the eUCP, it was solely an alignment with MLETR with respect to electronic transferable records.
The ICC reminds users that “As stated in the ICC “Commentary on the eRules” covering both the eUCP and the eURC, it is necessary to consider each applicable legal system with respect to usage of the eRules in order to determine whether there is any substantive conflict between the eRules definitions and those contained in the local law.”
As very little key legislation was in place at the time of drafting the eRules, it negated any need to include definitions or clarification of the meaning of an electronic transferable record at the time.
However, recent developments have now made it evident that enhanced alignment
with MLETR, and similar legal developments elsewhere around the world, would
provide intrinsic benefit and accordingly, version 2.1 reflects specific changes as detailed below:
Update eUCP sub-article e3 (b) (iii) to state, ‘Electronic record, including an electronic transferable record, means …’
Add new definition as eUCP sub-article e3 (b) (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.’
Previous eUCP sub-article e3 (b) (v) now e3 (b) (vi).
Previous eUCP sub-article e3 (b) (vi) now e3 (b) (vii).
Previous eUCP sub-article e3 (b) (vii) now e3 (b) (viii).
Previous eUCP sub-article e3 (b) (viii) now e3 (b) (ix).
In addition, an appendix has now been added to the rules, providing recommendations for SWIFT MT700 Field requirements in respect of a credit subject to the eUCP Version 2.1.
The eUCP version 2.1 can be downloaded here and ICC is also inviting users to the practical guide to the eUCP which will highlight how to concretely use them in your daily business.
Users are also encouraged to look at the Supplement to the commentary on eUCP and eURC which will give you a complete outlook on ICC eRules, and the most recent ICC eRules publication which is the Uniform Rules for Digital Trade Transactions (URDTT) which came into force on 1 October 2021.
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