New UCP supplement comes into force
The new electronic supplement to UCP 500, ICC's universally used rules on letters of credit, came into force at the beginning of this month. The supplement, termed eUCP, contains 12 Articles which, if incorporated into a credit, will rule when there are electronic or part-electronic presentations of documents.
The eUCP, 18 months in preparation, is expected to revolutionize the way documentary credits are used. Neil Chantry of HSBC London, a member of the task force that created the supplement, predicts that “after 10 years there will be virtually no paper based trade documentation”.
The eUCP presents some challenging concepts to letter of credit users. One of the most difficult is the question of what constitutes an “original document” in the electronic world. As Chantry points out in an upcoming article in the ICC newsletter DCInsight, “An electronic ‘document’ can be copied many times over, with each copy being an original. Consequently, eUCP refers to ‘electronic records’, and effectively consigns to history the notion of calling for ‘original’ documents in an electronic documentary trade transaction.”
Some banks and electronic trading sites have geared up to ready themselves for the eUCP. Bolero, the SWIFT-backed online trading site, which has signed up a number of major banks, says it has adopted the new eUCP rules, effective as of midnight on 31 March 2002.
“Bolero is rea dy to use the new rules,” says head of standards, Peter Guldentops. Its new messaging “will be eUCP compliant the minute the new supplement comes into force”, he says.
In the last few weeks, conferences on the new supplement have been scheduled in virtually all parts of the world. ICC is itself holding a conference on “Using the new eUCP” in Paris on 24 April. Speakers will be members of the task force that wrote the rules, and topics range from an overview of the rules to the relationship of the eUCP to the UCP and other rules and laws.