eUCP Version 2.0 Article e3

eUCP Version 2.0 Article e3

Chào các bạn,

Hôm nay chúng ta tiếp tục eUCP với Điều e3 nhé.

Điều e3 bao gồm cả phần giải thích các thay đổi và bình luận dài hơn 20 trang không chắc các bạn có đủ thời gian và sự kiên nhẫn để đọc hết một lần. Bạn nào ngán quá thì chỉ cần cố gắng đọc hết phần quy định (dài không quá 1 trang), còn bạn nào có thừa kiên nhẫn thì có thể đọc hết.

Điều e3 giải thích các thuật ngữ và cụm từ đã từng được sử dụng trong UCP 600 nhưng SẼ CÓ NGHĨA KHÁC như “appear on their face”, “document”, “place for presentation”, “presenter, “sign”, và “superimposed, notation or stamped”.

Điều e3 cũng đưa định nghĩa các thuật ngữ mới chỉ dùng trong eUCP như “data corruption”, “data processing system”, “electronic record” “electronic signature”, “format”, “paper document”, “received” và “re-present or re-presented”.

Tin vui:

1/ Bạn nào đọc hết thì báo Mr. Old Man biết để nhận thưởng nhé.
2/ Điều e4 tiếp theo chỉ ½ trang giấy và rất giống Điều 5 UCP!

Thân ái.

Mr. Old Man
—-

ARTICLE e3

DEFINITIONS

a. Where the following terms are used in the UCP, for the purpose of applying the UCP to an electronic record presented under an eUCP Credit, the term:

i. APPEAR ON THEIR FACE and the like shall apply to examination of the data content of an electronic record.

ii. DOCUMENT shall include an electronic record.

iii. PLACE FOR PRESENTATION of an electronic record means an electronic address of a data processing system.

iv. PRESENTER means the beneficiary, or any party acting on behalf of the beneficiary who makes a presentation to a nominated bank, confirming bank, if any, or to the issuing bank directly.

v. SIGN and the like shall include an electronic signature. vi. Superimposed, notation or stamped means data content whose supplementary character is apparent in an electronic record.

b. The following terms used in the eUCP shall have the following meaning:

i. DATA CORRUPTION means any distortion or loss of data that renders the electronic record, as it was presented, unreadable in whole or in part.

ii. DATA PROCESSING SYSTEM means a computerised or an electronic or any other automated means used to process and manipulate data, initiate an action or respond to data messages or performances in whole or in part.

iii. ELECTRONIC RECORD means data created, generated, sent, communicated, received or stored by electronic means, including, where appropriate, all information logically associated with or otherwise linked together so as to become part of the record, whether generated contemporaneously or not, that is: a. capable of being authenticated as to the apparent identity of a sender and the apparent source of the data contained in it, and as to whether it has remained complete and unaltered, and b. capable of being examined for compliance with the terms and conditions of the eUCP credit.

iv. ELECTRONIC SIGNATURE means a data process attached to or logically associated with an electronic record and executed or adopted by a person in order to identify that person and to indicate that person’s authentication of the electronic record.

v. FORMAT means the data organisation in which the electronic record is expressed or to which it refers.

vi. PAPER DOCUMENT means a document in a paper form.

vii. Received means when an electronic record enters a data processing system, at the place for presentation indicated in the eUCP credit, in a format capable of being accepted by that system. Any acknowledgment of receipt generated by that system does not imply that the electronic record has been viewed, examined, accepted or refused under an eUCP Credit.

viii. RE-PRESENT or REPRESENTED means to substitute or replace an electronic record already presented.

CHANGES FROM eUCP VERSION 1.1

• Minor structural changes
• Format of each term reflects that used in UCP 600
• Addition of “data processing system” to the “place for presentation”
• New definition for “Presenter”
• New definition for “Data corruption”
• New definition for “Data processing system”
• Definition of “Electronic record” expanded to include logically associated information
• Deleted the word “traditional” from the definition of “paper”
• Definition of “Received” now refers to a data processing system, and includes added reference to viewing and examination
• New definition for “Re-present” and “re-presented”

COMMENTARY

This article comprises of a number of terms used in the eUCP. Some also appear in UCP 600, whilst others appear solely in the eUCP.

UCP 600 TERMS

Article e3 is comprised of two distinct parts. In the first section, sub-article e3 (a), reference is made to terms that also appear in UCP 600, but have a different meaning when applied to an electronic record presented under an eUCP credit. These include ‘appear on their face’, ‘document’, ‘place for presentation’, ‘presenter’, ‘sign’, and ‘superimposed, notation or stamped’.

Owing to the interdependence between UCP 600 and eUCP, it was clear that these UCP 600 terms required ‘re-definition’ under the eUCP in order to remain applicable.

eUCP TERMS

The second section, sub-article e3 (b), defines terms used solely in the eUCP. These include ‘data corruption’, ‘data processing system’, ‘electronic record’, ‘electronic signature’, ‘format’, ‘paper document’, ‘received’, and ‘re-present or re-presented’.

RELATIONSHIP TO, AND IMPACT OF, LOCAL ELECTRONIC COMMERCE LAW

The statements in the previous ‘ICC Guide to the eUCP’ (ICC Publication No. 639), are equally applicable to eUCP Version 2.0, and are repeated below.

Not only are many of the terms that are defined in eUCP article e3 used in electronic commerce, they have also come to be used and even defined in the law relating to it. With respect to the law, as well as electronic commerce generally, there has been no intention to develop new doctrine or concepts. Any innovations in the definitions in the eUCP derive from the unique nature of the documentary credit.

While every attempt has been made to align the definitions in these rules with those used in local law, many of the legal definitions now extant differ among themselves in formulation if not meaning. As a result, the eUCP definitions are modelled on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce, which is the most widely imitated in electronic commerce legislation.

Therefore, in working with the eUCP, it is necessary to consider each applicable legal system with respect to the eUCP definitions to determine:

• whether local law defers to a system of private rules such as the eUCP where the undertaking is subject to them, and,
• whether this deference extends to the internal definitions used in the eUCP even if they differ from those used in the definitional section of the law, and,
• whether there is any substantive conflict between the eUCP definitions and those contained in the local law.

In most cases, the law of electronic commerce reflects modern commercial law in permitting private rules to utilise particular definitions internally. Where the same term has differing meanings or where the same concept is given two different names—one in the law and a different one in a private rule—there is more likely to be confusion than conflict in applying local law. The confusion would result where local law embraces one definition but defers to the eUCP and permits use of a different definition internally in applying that practice.

For example, the term ‘document’ may have a different meaning under local electronic commerce law than in the eUCP. When applying local electronic commerce law, its own definition must be used, whereas in interpreting and applying the eUCP, the eUCP definition must be used. The only area identified to date as one for possible concern regarding conflict between the eUCP and local electronic commerce law relates to the degree of authenticity required for electronic records and the meaning to be attached to a requirement for an electronic signature.

Where there is a mandatory requirement under local electronic commerce law for a higher degree of authenticity than would be required under the eUCP, local electronic commerce law may impose additional requirements on an electronic presentation. As to the liability for variations of local law, UCP 600 sub-article 37 (d) (Disclaimer for Acts of an Instructed Party) provides that the applicant would be required to indemnify the bank against any risks arising from such a local law other than the law to which the bank itself is subject where the credit is not made subject to that law.

EUCP SUB-ARTICLE E3 (A) (I): “APPEAR ON THEIR FACE”

eUCP Definition

The term ‘appear on their face’ and the like shall apply to examination of the data content of an electronic record.

General

eUCP sub-article e3 (a) (i) appends to the meaning of ‘appear on their face’ in UCP 600 subarticle 14 (a) (Standard for Examination of Documents).

Meaning of “Appear on their face” in UCP 600

This term stresses that documents are examined on their face in order to ascertain if they constitute a complying presentation. The concept of ‘on their face’ does not refer to a simple front versus the back of a document, but extends to the review of data within a document in order to determine that a presentation complies with international standard banking practice and the principles contained in UCP. Banks are not obliged to go beyond the face of a document to establish whether or not a document complies with a requirement in a documentary credit or within any requirement in the UCP.

Concept in the eUCP

The rationale for this concept is equally applicable to the eUCP. As with paper documents, electronic records are examined only for the data received and not the reality that such data represents. Although sub-article e7 (b) (Examination) allows banks to examine electronic records accessible via an external system, such examination is still limited to the data provided at that site or system and not of the underlying reality represented.
Examination of data

However, the notion that examination of data is limited to what appears on its face cannot be equated with the examination only of the data that appears on the computer screen of the examiner. Examination of data is related to the content that is required in order to determine compliance with the terms and conditions of the credit. The format of a computerised program used to view an electronic record may hide certain data and only display the data that it is programmed to reveal. It is possible that elements of this suppressed data may necessitate examination for some purposes and not others. As an example, it may be expected that certain header and footer tags will be reviewed in the process of authenticating the transmission or in ascertaining the data sent or received. It is not expected, however, that any prior correction to the document that may be embedded in the message transmitted will be taken into account in determining compliance of the electronic record with the credit.

In order to avoid difficulties, a bank should give careful thought to the format in which the data is required to be presented and what data will be displayed by processing systems which will be sufficient to assure it that an examiner has all of the data that is relevant to an examination of the electronic record.

EUCP SUB-ARTICLE E3 (A) (II): “DOCUMENT”

eUCP Definition

The term ‘document’ shall include an electronic record.

General

eUCP sub-article e3 (a) (ii) adds the term ‘electronic record’ to the meaning of ‘document’ as used in UCP 600, with respect to an eUCP credit.

Meanings of ‘Document’ in UCP 600

The term can have a variation of inferences and has developed into a useful general usage term. In the paper world there was no need to distinguish between the various functions served by the term. The requirement to honour a documentary credit is predicated upon presentation of a document. Banks are not concerned with the realities that documents represent, merely concerning themselves with how they appear on their face.
Paper

As used throughout UCP 600, the term ‘document’ suggests format in a paper medium. Unless specifically allowed under the terms and conditions of a UCP 600 credit, it is expected that all presentations under such a credit be in a paper format.

‘Document’ in electronic commerce law

It is important that the impact of applicable local electronic commerce law always be taken into account. However, based upon the fact that the eUCP definitions are modelled on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce, it is hoped that there will be no particular conflict with the eUCP definition.

UNCITRAL

The UNCITRAL Guide to the Model Law on Electronic Commerce provides a number of references to ‘document’, and several pertinent extracts are stated below:

• Article 17 Transport Documents

o Where the law requires that any action referred to in article 16 (Actions related to contracts of carriage of goods) be carried out in writing or by using a paper document, that requirement is met if the action is carried out by using one or more data messages.

o If a right is to be granted to, or an obligation is to be acquired by, one person and no other person, and if the law requires that, in order to effect this, the right or obligation must be conveyed to that person by the transfer, or use of, a paper document, that requirement is met if the right or obligation is conveyed by using one or more data messages, provided that a reliable method is used to render such data message or messages unique.

o If a rule of law is compulsorily applicable to a contract of carriage of goods which is in, or is evidenced by, a paper document, that rule shall not be inapplicable to such a contract of carriage of goods which is evidenced by one or more data messages by reason of the fact that the contract is evidenced by such data message or messages instead of by a paper document.

• Objectives

o The objectives of the Model Law, which include enabling or facilitating the use of electronic commerce and providing equal treatment to users of paper-based documentation and to users of computer-based information, are essential for fostering economy and efficiency in international trade.

• The “functional-equivalent” approach

o The Model Law is based on the recognition that legal requirements prescribing the use of traditional paper-based documentation constitute the main obstacle to the development of modern means of communication. In the preparation of the Model Law, consideration was given to the possibility of dealing with impediments to the use of electronic commerce posed by such requirements in national laws by way of an extension of the scope of such notions as ‘writing’, ‘signature’ and ‘original’, with a view to encompassing computer-based techniques.

o The Model Law thus relies on a new approach, sometimes referred to as the ‘functional equivalent approach’, which is based on an analysis of the purposes and functions of the traditional paper-based requirement with a view to determining how those purposes or functions could be fulfilled through electronic commerce techniques. For example, among the functions served by a paper document are the following: to provide that a document would be legible by all; to provide that a document would remain unaltered over time; to allow for the reproduction of a document so that each party would hold a copy of the same data; to allow for the authentication of data by means of a signature; and to provide that a document would be in a form acceptable to public authorities and courts. It should be noted that in respect of all of the above-mentioned functions of paper, electronic records can provide the same level of security as paper and, in most cases, a much higher degree of reliability and speed, especially with respect to the identification of the source and content of the data, provided that a number of technical and legal requirements are met. However, the adoption of the functional-equivalent approach should not result in imposing on users of electronic commerce more stringent standards of security (and the related costs) than in a paper-based environment.

o A data message, in and of itself, cannot be regarded as an equivalent of a paper document in that it is of a different nature and does not necessarily perform all conceivable functions of a paper document. That is why the Model Law adopted a flexible standard, taking into account the various layers of existing requirements in a paper-based environment: when adopting the ‘functional-equivalent’ approach, attention was given to the existing hierarchy of form requirements, which provides distinct levels of reliability, traceability and unalterability with respect to paper-based documents. For example, the requirement that data be presented in written form (which constitutes a ‘threshold requirement’) is not to be confused with more stringent requirements such as ‘signed writing’, ‘signed original’ or ‘authenticated legal act’.

o The Model Law does not attempt to define a computer-based equivalent to any kind of paper document. Instead, it singles out basic functions of paper-based form requirements, with a view to providing criteria which, once they are met by data messages, enable such data messages to enjoy the same level of legal recognition as corresponding paper documents performing the same function.

• Article 5 Legal Recognition of data messages

o Article 5 embodies the fundamental principle that data messages should not be discriminated against, i.e., that there should be no disparity of treatment between data messages and paper documents.

eUCP SUB-ARTICLE E3 (A) (III): “PLACE FOR PRESENTATION”

eUCP Definition:

The term ‘place for presentation’ of an electronic record means an electronic address of a data processing system.

General

eUCP sub-article e3 (a) (iii) extends the phrase ‘place for presentation’ in UCP 600 to include an electronic address when referring to the place of presentation of an electronic record under an eUCP credit.

Meaning of ‘Place for Presentation’ in UCP 600

The place for presentation is the place where the documentary credit is available. If the credit is available with any bank, the place for presentation is at the bank to which presentation is made by the beneficiary or other presenter. A place for presentation stated in a credit is always in addition to the place of the issuing bank. In UCP 600, the term denotes an address at a physical location, as is implied by sub-article 6 (d) (ii) (Availability, Expiry Date and Place for Presentation).

Direct presentation

International standard banking practice does not deny the beneficiary the opportunity of presenting documents direct to an issuing or confirming bank. However, it should be borne in mind that, if a confirming bank exists in a specific transaction, then such bank would normally demand that documents are presented at its counters in order for the confirmation to be effective.

Consequences under UCP 600

Under UCP 600, presentation to the place indicated or permitted for presentation fixes the date of presentation against which any deadlines in the credit are to be measured and also fixes the running of time for expiration of the credit. It also partially fulfils the terms and conditions of the credit.

Transition to eUCP credits

Where the credit requires or permits presentation of electronic records, their place of presentation will typically be to an electronic address and not a physical one. However, the credit may require that the electronic record be contained on a portable storage medium, in which case the electronic record may be presented to a physical address.

Express reference

Although, as stated above, UCP 600 sub-article 6 (d) (ii) (Availability, Expiry Date and Place for Presentation) implies a physical location for presentation, it could be interpreted that it does also cover an electronic address. However, for purposes of transparency and clarity, as well as certainty, sub-article e3 (a) (iii) expressly refers to an electronic address.

Electronic address

Although there is no specific definition within the eUCP, the term ‘electronic address’ signifies the precise electronic location or proprietary system to which an electronic record can be sent. It could include, inter alia, a URL, an email address, or an address on a dedicated system.

Significance under an eUCP

Credit Under eUCP, although continuing as the place to which documents are to be presented, the mere presentation of any documents to that place does not postpone or defer any related deadlines or the date for expiry under the eUCP until the bank receives a notice of completeness. At that point, the time of presentation is fixed.

eUCP SUB-ARTICLE E3 (A) (IV): “PRESENTER”

eUCP Definition

The term ‘presenter’ means the beneficiary, or any party acting on behalf of the beneficiary who makes a presentation to a nominated bank, confirming bank, if any, or to the issuing bank directly.

Meaning of ‘Presenter’ in eUCP

Although UCP 600 article 2 (Definitions) defines ‘Presenter’, it does so in a different context. In eUCP we are talking of a presentation made by a beneficiary, its banker (non-nominated bank) or, for example, an agent, directly to a nominated bank or issuing bank.

Meaning of ‘Presenter’ in UCP 600

In UCP 600, the use of presenter goes wider. For example, in sub-article 16 (c) (Discrepant Documents, Waiver and Notice), ‘presenter’ could be a beneficiary, its banker, an agent or the nominated bank or confirming bank.

As stated in the ‘Commentary on UCP 600’ (ICC Publication No. 680), the term ‘presenter’ was introduced into UCP 600 to better define the party that actually makes a presentation of documents to the bank and to reference the party that presents the documents. The presenter may be either the beneficiary of the documentary credit, another bank or another party acting on behalf of the beneficiary.

eUCP SUB-ARTICLE E3 (A) (V): “SIGN”

eUCP Definition

The term ‘sign’ and the like shall include an electronic signature.

General

eUCP sub-article e3 (a) (v) adds ‘electronic signature’ to the meaning of the term ‘sign’ or its variants as used in UCP 600 or in the credit in connection with an electronic record presented under the eUCP.

Role of signature in documentary credit practice

A signature identifies the person assuming responsibility for the document and indicates some form of assent to its content. Signatures are regarded as adding assurance of authenticity to a document and of the veracity of the representations contained in it. By signing a document, the person signing is personally engaged to some extent in a moral, if not a legal, sense, in what the document represents. International standard banking practice It is expected that certain documents will be signed notwithstanding the absence of a specific requirement in the credit. Whilst UCP 600 does not specifically define the meaning of a signature, UCP 600 article 3 (Interpretations) highlights that ‘a document may be signed by handwriting, facsimile signature, perforated signature, stamp, symbol, or any other mechanical or electronic method of authentication.

’ eUCP practice

In contrast, the eUCP does define an electronic signature as ‘a data process attached to or logically associated with an electronic record and executed or adopted by a person in order to identify that person and to indicate that person’s authentication of the electronic record.’ Electronic signatures and local law In order to have validity under local law, it is often necessary for certain paper documents to be signed. Some laws also define terms such as ‘sign’ and ‘signature’.

This has advanced further in recent times with the formulation of electronic commerce laws, which now address electronic records and their method of authentication. As such, and in order to remain in line with existing law, most electronic commerce laws include definitions for terms such as ‘sign’ and ‘signature’.

It is important to note that the eUCP takes a technology-agnostic view with respect to the type of technology that may be used in this respect.

UNCITRAL

The UNCITRAL Model Law on Electronic Signatures is intended to apply where electronic signatures are used in the context of commercial activities. The term ‘commercial’ is given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not.

Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road.

The above indications, which may be particularly useful for those countries where there does not exist a discrete body of commercial law, are modelled, for reasons of consistency, on the footnote to article 1 of the UNCITRAL Model Law on International Commercial Arbitration.

As stated in article 7 (signature) of the UNCITRAL Model Law on Electronic Commerce, where the law requires a signature of a person, that requirement is met in relation to a data message if:

a. a method is used to identify that person and to indicate that person’s approval of the information contained in the data message; and,

b. that method is as reliable as was appropriate for the purpose for which the data message was generated or communicated, in the light of all the circumstances, including any relevant agreement.

Article 7 is based on the recognition of the functions of a signature in a paper-based environment. In the preparation of the Model Law, the following functions of a signature were considered:

• to identify a person;
• to provide certainty as to the personal involvement of that person in the act of signing;
• to associate that person with the content of a document.

It was noted that, in addition, a signature could perform a variety of functions, depending on the nature of the document that was signed. For example, a signature might attest to the intent of a party to be bound by the content of a signed contract; the intent of a person to endorse authorship of a text; the intent of a person to associate itself with the content of a document written by someone else; the fact that, and the time when, a person had been at a given place.

Article 7 does not introduce a distinction between the situation in which users of electronic commerce are linked by a communication agreement and the situation in which parties had no prior contractual relationship regarding the use of electronic commerce. Thus, article 7 may be regarded as establishing a basic standard of authentication for data messages that might be exchanged in the absence of a prior contractual relationship and, at the same time, to provide guidance as to what might constitute an appropriate substitute for a signature if the parties used electronic communications in the context of a communication agreement. The Model Law is thus intended to provide useful guidance both in a context where national laws would leave the question of authentication of data messages entirely to the discretion of the parties and in a context where requirements for signature, which were usually set by mandatory provisions of national law, should not be made subject to alteration by agreement of the parties.

eUCP SUB-ARTICLE E3 (A) (VI): “SUPERIMPOSED”, “NOTATION”, OR “STAMPED”

eUCP Definition

The terms ‘superimposed’, ‘notation’ or ‘stamped’ mean data content whose supplementary character is apparent in an electronic record.

General

eUCP sub-article e3 (a) (vi) uses the terms ‘superimposed’, ‘notation’, and ‘stamped’ to describe the addition of information to an electronic record after it has been created.
Usage and meaning in UCP 600

The terms “superimposed”, “notation”, and “stamped” are not defined in UCP 600.

• The term “superimposed” appears in UCP 600 article 34 (Disclaimer on Effectiveness of Documents) to signify the imposition of conditions either physically on the document or by implication from the terms of another related document, contract, law, or custom.
• The term “notation” appears in UCP 600 sub-articles 19 (a) (ii) (Transport Document Covering at Least Two Different Modes of Transport), 20 (a) (ii) and (iii) (Bill of Lading), 21 (a) (ii) and (iii) (Non-Negotiable Sea Waybill), 22 (a) (ii) (Charter Party Bill of Lading), 23 (a) (iii) (Air Transport Document), 24 (a) (i)) (Road, Rail or Inland Waterway Transport Document), article 27 (Clean Transport Document) and sub-article 28 (h) (Insurance Document and Coverage) to signify a physical addition to a document, commonly a reference to a date of receipt of goods in a transport document subsequent to the date of its issuance, or indications that there is a defective condition, or in an insurance document to indicate the scope of coverage. In the latter two situations, it is contrasted with a ‘clause’ that is in the document as issued. There is some usage in practice by which preprinted words on a bill of lading that is in a blank box and intended to be filled by handwriting are called a ‘notation’ even though not filled in, but this use does not signify an operative undertaking that the goods are laden on board under UCP 600.
• The term “stamped” or “stamp” appears in UCP 600 article 3 (Interpretations), sub-articles 17 (b) and 17 (c) (i) (Original Documents and Copies), sub-article 19 (a) (ii) (Transport Document Covering at Least Two Different Modes of Transport), sub-article 24 (a) (i) and (ii) (Road, Rail or Inland Waterway Transport Documents), sub-article 25 (a) (i) and (c) (Courier Receipt, Post Receipt or Certificate of Posting), sub-article 26 (c) (“On Deck”, “Shipper’s Load and Count”, “Said by Shipper to Contain” and Charges Additional to Freight), and sub-article 31 (c) (Partial Drawings or Shipments) to signify the physical addition of data in part by means of a mechanical device or fixed attachment of a piece of paper so firmly that it becomes a part of the original paper (“allonge”) which may also contain handwritten additions.

All three terms have very similar meanings and all relate to information that has ben added after the creation of a document. The difference between the terms relates to the mode of addition and the customary context in which they are used and, in part, can be explained by the historical evolution of the UCP. It is, for example, possible to state, “The notation on a bill of lading was superimposed by a stamp” and to convey the meaning that a mechanical stamp was applied to the bill of lading that contained data of significance which was either added by the stamp or subsequently by handwriting. There is no significant difference between the terms.

eUCP Electronic Records

With respect to electronic records, eUCP sub-article e3 (a) (vi) highlights that the terms only have meaning when their supplementary nature is apparent in the relevant electronic record.

eUCP SUB-ARTICLE E3 (B) (I): “DATA CORRUPTION”

eUCP Definition

The term ‘data corruption’ means any distortion or loss of data that renders the electronic record, as it was presented, unreadable in whole or in part.

General

eUCP version 1.1 did not define ‘corruption’. As the heading of eUCP article 12 now refers to ‘Data Corruption of an Electronic Record’, it was considered appropriate to include a definition in the revised eUCP.

Use in UCP 600

The term ‘data corruption’ is not used in UCP 600.

Meaning of ‘data corruption’

Data can be corrupted after having been received from the presenter. As a result, there could be a degree of unease regarding the possibility of the loss of data by a bank after an electronic record has been presented. Any problem with the record prior to receipt is the responsibility of the presenter whose obligation is to present the data to the place of presentation in the format required by the credit.

eUCP SUB-ARTICLE E3 (B) (II): “DATA PROCESSING SYSTEM”

eUCP Definition

The term ‘Data processing system’ means a computerised or an electronic or any other automated means used to process and manipulate data, initiate an action or respond to data messages or performances in whole or in part.

General

eUCP version 1.1 article e12 referred to a ‘data process’ which was not defined. The revised article e13 (Additional Disclaimer of Liability for Presentation of Electronic Records under eUCP) now refers to a ‘data processing system’. Any bank that engages in an eUCP transaction is responsible for maintaining a data processing system. This responsibility is a fundamental precondition for using the eUCP.

Use in UCP 600

The term ‘data processing system’ is not used in UCP 600.
Meaning of ‘Data processing system’

The aim was to align definitions in eUCP with those used in local law. However, many legal definitions differ among themselves in formulation if not meaning. As a result, the eUCP definitions are modelled on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce, which is the most widely imitated in eCommerce legislation. In working with eUCP, it is necessary to consider each applicable legal system with respect to the eUCP definitions.

UNCITRAL

The UNCITRAL definition of ‘automated data processing’ has been adapted for these rules. In addition, article 2 of the UNCITRAL Model Law on Electronic Commerce defines ‘information system’ as a system for generating, sending, receiving, storing or otherwise processing data messages. The definition of ‘information system’ is intended to cover the entire range of technical means used for transmitting, receiving and storing information. For example, depending on the factual situation, the notion of ‘information system’ could be indicating a communications network, and in other instances could include an electronic mailbox or even a telecopier. The Model Law does not address the question of whether the information system is located on the premises of the addressee or on other premises, since location of information systems is not an operative criterion under the Model Law.

eUCP SUB-ARTICLE E3 (B) (III). “ELECTRONIC RECORD”

eUCP Definition

The term ‘Electronic record’ means data created, generated, sent, communicated, received or stored by electronic means, including, where appropriate, all information logically associated with or otherwise linked together so as to become part of the record, whether generated contemporaneously or not, that is:
a. capable of being authenticated as to the apparent identity of a sender and the apparent source of the data contained in it, and as to whether it has remained complete and unaltered, and
b. capable of being examined for compliance with the terms and conditions of the eUCP credit.

General

eUCP sub-article e3 (b) (iii) defines “electronic record” as the term is used in the eUCP.

A digital record is one that exists in digitised form only, whereas an electronic record may also encompass a copy of an original document that is stored in electronic form e.g. a scanned copy.
The eUCP definition of ‘electronic record’ does appear to include a digitised record (‘data created…by electronic means’) but is broader than that.

The commentary to the UNCITRAL Model Law on Electronic Transferable Records states that the definition of ‘electronic transferable records’ is meant to include both functional electronic equivalents of paper records and digitised records.
A similar approach applies for electronic vs. digital signatures.

The key change from eUCP version 1.1 is the addition of ‘… including, where appropriate, all information logically associated with or otherwise linked together so as to become part of the record, whether generated contemporaneously or not …’. This is in line with the definition of ‘electronic record’ in article 2 (Definitions) of the UNCITRAL Model Law on Electronic Transferable Records.

Electronic commerce

In electronic commerce, data is grouped together into a unit. Although these units are often provided with designations such as ‘messages’, ‘files’ and ‘documents’, the term ‘electronic record’ has emerged as a common label to identify a grouping of data in one message, file, or document and to distinguish it from a paper document.

Document

Under the eUCP, an electronic record is a type of document as provided in eUCP sub-article e3 (a) (ii) (Document). It is separate from a paper document, which is implied in eUCP sub-article e3 (b) (vi) (Paper document) as the document presented under a UCP 600 credit. Under an eUCP credit, documents can consist of both paper documents and electronic records but must consist of at least one electronic record.

Electronic

Although there is no definition of ‘electronic’ in the eUCP, such term would, by its nature, exclude paper documents. It is essential to also note that by using the generic term ‘electronic’, the rules avoid linkage with any specific technology or platform, thereby ensuring that the rules remain technology-agnostic. As outlined in the previous publication, ‘ICC Guide to the eUCP’ (ICC Publication No. 639), the term ‘electronic’ has generally been distinguished from imaging, which involves a different process. However, with technological advances, the distinctions have become blurred. More on this subject is outlined below.

Telefaxes and Imaging

The eUCP makes no reference to telefaxes. It was once thought that telefaxes could not be electronic records both for technological reasons and because there was an original paper document that generated the telefax. With technological advances, it is possible to generate a telefax on a computer and send it to another computer as an image.

As a result, it is impossible to categorically determine whether or not a telefax is an electronic record. If the issuing bank specifies the format of required or permitted electronic records, the problem will be avoided. Such a specification is especially important when document examination is automated since it would be difficult, if not impossible, to use a system to determine all of the required data elements from an image. If it does not do so, the presenter would probably be justified in presenting required electronic records by means of telefax and it would remain with the issuing bank to convince a court that they were not electronic records.

Formatting and electronic records

eUCP article e5 (Format) requires an eUCP credit must indicate the format of each electronic record, and that if the format of an electronic record is not indicated, it may be presented in any format. Accordingly, it can be presumed that provided a document is presented in the format stipulated in the eUCP credit, such document constitutes an electronic record. If the issuing bank states a specific format for a document to be presented under an eUCP credit and it is not a paper document, the document should be regarded as an electronic record for purposes of interpreting the eUCP.

Authenticated, apparent identity, apparent source of data, integrity of data

The eUCP does not expressly define authenticate. It does, however, link the term to and embody its meaning for purposes of the eUCP in its definition of ‘electronic record’.
eUCP Article e3 (b) (iii) indicates what it is necessary for transmitted electronic data to contain in order to become an electronic record under the eUCP. The data must not only be received into the system of the bank but also authenticated as to:

• the apparent identity of the sender; and,
• the apparent source of the data contained in the record; and
• is capable of being examined for compliance with the terms of the credit.

The eUCP does not require the electronic record to have been authenticated for it to become an electronic record, merely that it be capable of being authenticated. Whether it is actually authenticated is the responsibility of the bank. As long as the data is authenticatable, it is an electronic record for purposes of the eUCP. Because of the technology involved in transmitting electronic records, it is possible for them to become unscrambled in transition and not to be complete when received or for an error to be introduced. It is expected that the bank will check the integrity of an electronic message.

Methods for Authentication

Current and evolving technology allows for numerous commercially reasonable techniques in order to authenticate an electronic record whilst applying the criteria in eUCP sub-article e3 (b) (iii). The parties to the credit must decide the level and amount of security to be used in authenticating a message. The UNCITRAL Model Law on Electronic Commerce provides an excellent guide to this process. Various national laws may also impose specific requirements for an electronic record to be authenticated.

Technology Neutral

The method of authentication used in the eUCP is intended to be technology-agnostic and not to endorse any specific technology.
Capable of being examined

eUCP sub-article e3 (b) (iii) requires that, in order to qualify as an electronic record for purposes of the eUCP, data must be capable of being examined. This requirement is intrinsically linked with the requirement in eUCP article e5 (Format) that the issuing bank specify the required format. If it does so, then data sent in that particular format is assumed to be capable of being examined.

Accordingly, the requirement that data be capable of being examined is only relevant when the issuing bank does not actually specify a format. In such circumstance, the presenter may send the data in any format, but must still ensure that it be capable of being examined. The presenter would not be able to claim that the presentation was effective if what was sent could not be read.

Obligation to maintain a data processing system

Although banks are not obligated to issue or act on credits subject to the eUCP, they are required to maintain a data processing system for the receipt, authentication, and identification of electronic records. Such a system need not be state of the art, but it should be capable of performing those minimal functions of authentication considered commercially acceptable. Given the rapid pace of technological development, maintaining such standard will require regular review, analysis, and investment as techniques evolve. In any event, it is assumed that this is a natural process for any bank involved in international trade.

Electronic commerce law

The term ‘electronic record’ has been widely used and defined in statutory provisions relating to electronic commerce. The definition used in the eUCP may differ in some respects from those used in these laws. To the extent that there may be any problem, it would centre on the concepts of ‘electronic signature’ and ‘authentication’, terms covered below, rather than the definition of the term ‘electronic record’ as it is used in the eUCP.
UNCITRAL

eUCP SUB-ARTICLE E3 (B) (IV): “ELECTRONIC SIGNATURE”

eUCP Definition

The term ‘electronic signature’ means a data process attached to or logically associated with an electronic record and executed or adopted by a person in order to identify that person and to indicate that person’s authentication of the electronic record.

General

eUCP sub-article e3 (b) (iv) defines ‘electronic signature’ as data attached to an electronic record with the intent of identifying the signer and authenticating the record. Significance As provided in eUCP sub-article e3 (b) (iv), signatures on required documents perform two separate functions in documentary credit practice:

• indicating the identity of the person signing, and,
• authenticating the document itself and the information contained in it.

Signatures under UCP 600

Whilst UCP 600 does not specifically define the meaning of a signature, UCP 600 article 3 (Interpretations) highlights that ‘a document may be signed by handwriting, facsimile signature, perforated signature, stamp, symbol, or any other mechanical or electronic method of authentication.’

International standard banking practice expects that certain documents will be signed notwithstanding the absence of a requirement in the credit. UCP 600 requires that transport documents (articles 19-25) and insurance documents (article 28) be signed. It expressly provides that commercial invoices ‘need not be signed’ (sub-article 18 (a) (iv)), and sub-article 14 (f) (Standard for Examination of Documents) indicates that banks will accept documents as presented unless otherwise provided in the credit. The ‘General Principles’ in respect of signatures are outlined in Paragraphs A35, A36, A37 and A38 of ISBP 745 (“International Standard Banking Practice for the Examination of Documents under UCP 600”).

Signature in an electronic record

An electronic signature in an electronic record can take place by indication of the name of the signer, a code, key or acceptable digital signatures and public key cryptography given in a manner that appears to be intended to authenticate.

While the method of authenticating the document differs when it is electronic, ‘signing’ an electronic message serves the same functions as does signing a paper document. Current and evolving technology allows for numerous commercially reasonable techniques for digital signatures. The UNCITRAL Model Law on Electronic Commerce provides an excellent guide to this process. Various national laws may also impose specific requirements for digital signatures.

Signature in the eUCP

The eUCP does not contain any substantive requirement that an electronic record contain an electronic signature. The only reference to ‘electronic signature’ is contained in the explanation of ‘sign’ in eUCP sub-article e3 (a) (v), which indicates that the term as it appears in UCP 600 also includes an electronic signature. The reference will impact those documents that require signing under UCP 600, documentary credit practice, or the terms of the credit.

Technology Neutral

The definition given for ‘electronic signature’ is intended to be technology neutral and not to endorse any specific technology.
Attached to or logically associated with an electronic record
eUCP sub-article e3 (b) (iv) requires that the data consisting of the electronic signature be attached to the electronic record or closely associated with it. In most cases the electronic signature is enclosed in the envelope of the message or embedded within the electronic record itself. It must be associated with the message in such a manner as to indicate the identity of the signer.

The reference in eUCP sub-article e3 (b) (iv) to the association or connection of the data with the electronic record in order to identify the signer and authenticate the record and its content goes only to the appearance of connectedness that can be implied from examining the electronic record on its face and not to the actual intention of the signer.

Electronic signatures and local law

Local law may contain requirements that certain documents be signed in order to be effective. Such law often defines the terms ‘sign’ or ‘signature’.

One facet of the evolution of electronic commerce has been the extension of such laws to embrace electronic documents and to permit such documents to be authenticated in a manner that links with the nature of the document. As a result, many of electronic commerce laws contain a definition of these terms. Caution should be exercised in references to electronic signatures in law and practice to distinguish between a relatively simple ‘electronic signature’ and one with added precautions.
The latter has commonly been called a ‘digital signature’ for purposes of differentiation. When local law adopts the more restrictive notion of a digital signature, it may impose a requirement on an electronic signature not definitively contained in UCP 600 or the credit itself. Where the law is not that of the issuing bank, UCP 600 sub-article 37 (d) (Disclaimer for Acts of an Instructed Party) shifts any risk to the applicant. Unless the credit specifically provides, the use of the term ‘electronic signature’ in the eUCP does not signify the requirement that any signature be by means of digital signature.

UNCITRAL

As stated by UNCITRAL, the increased use of electronic means improves the efficiency of commercial activities, including re-use and analysis of data, enhances trade connections and allows new access opportunities for previously remote parties and markets, thus playing a fundamental role in promoting trade and economic development both domestically and internationally. However, certainty is needed as to the legal value of the use of those electronic means. In order to address that need, UNCITRAL has prepared a number of texts aimed at removing obstacles to the use of electronic means in commercial activities such as the UNCITRAL Model Law on Electronic Commerce, the UNCITRAL Model Law on Electronic Signatures and the United Nations Convention on the Use of Electronic Communications in International Contracts (the “Electronic Communications Convention”).

The UNCITRAL Model Law on Electronic Signatures defines an ‘electronic signature’ as data in electronic form, affixed to or logically associated with, a data message, which may be used to identify the signatory in relation to the data message and to indicate the signatory’s approval of the information contained in the data message.

It further defines ‘signatory’ as a person that holds signature creation data and acts either on its own behalf or on behalf of the person it represents.
The UNCITRAL Model Law on Electronic Transferable Records states that where the law requires or permits a signature of a person, that requirement is met by an electronic transferable record if a reliable method is used to identify that person and to indicate that person’s intention in respect of the information contained in the electronic transferable record.

Article 7 of the UNCITRAL Model Law on Electronic Commerce is based on the recognition of the functions of a signature in a paper-based environment. In the preparation of the UNCITRAL Model Law on Electronic Commerce, the UNCITRAL Working Group discussed the following functions traditionally performed by handwritten signatures: to identify a person; to provide certainty as to the personal involvement of that person in the act of signing; to associate that person with the content of a document. It was noted that, in addition, a signature could perform a variety of functions, depending on the nature of the document that was signed. For example, a signature might attest to: the intent of a party to be bound by the content of a signed contract; the intent of a person to endorse authorship of a text (thus displaying awareness of the fact that legal consequences might possibly flow from the act of signing); the intent of a person to associate itself with the content of a document written by someone else; the fact that, and the time when, a person had been at a given place.

eUCP SUB-ARTICLE E3 (B) (V): “FORMAT”

eUCP Definition

The term “format” means the data organisation in which the electronic record is expressed or to which it refers.

General

eUCP sub-article e3 (b) (v) defines ‘format’, a concept vital to the examination of electronic records.

Background

There is no uniform or standard system by which data is organised, nor does there exist a common protocol by which data can be read or identified by data processing systems. As a result, it is only readable if the data processing system is able to recognise the manner in which the data is organised, or its format.

Not every data processing system can recognise every format into which data can be organised. Moreover, with the fast pace of technological development, many systems of organisation are regularly issued in successive versions. It is typical that the later versions are able to read earlier ones but that earlier ones are not able to read later ones.

Meanings of Format

The term ‘format’ is used in several senses. It can mean the protocol by which data is organised, the version of that format, or the shorthand name by which that protocol is recognised and described. There is no precise distinction between these approaches, and the manner in which it is intended they be used can normally be identified from the context in which they are used. Under the eUCP, the burden is on the issuing bank to indicate, with sufficient specificity, the format in which it desires data in the electronic record to be arranged.

Accessing data in readable form

The importance of a format lies in the ability of a data processing system to process data. If the format is not one that is recognised by the data processing system, the output is meaningless and said to be ‘unreadable’. This term implies that the data processing system cannot properly format the data in a manner that would provide meaning to a reader.

Format in the eUCP

Questions relating to format have virtually no analogy to credits calling for paper documents under UCP 600, except possibly with respect to the language in which documents are written. In order to develop a new system for processing electronic records, it is necessary that the desired format be known to the presenter and nominated banks in order to avoid confusion and disputes. As a result, eUCP article e5 (Format) and sub-article e7 (c) (Examination) place the onus of stating a required format on the issuing bank and permits the presenter to present an electronic record in any format if none is specified in the eUCP credit.

eUCP SUB-ARTICLE E3 (B) (VI): “PAPER DOCUMENT”

eUCP Definition

The term ‘paper document’ means a document in a paper form.

General

eUCP sub-article e3 (b) (vi) refers to a document in a paper medium, the type of document which is expected to be presented under UCP 600.

UCP 600

Unless otherwise stipulated, UCP 600 assumes that all ‘documents’ are in a paper medium. Provisions such as ‘original’, ‘appear on their face’, ‘copies’, and ‘examine on their face’ all presume the presentation of paper. However, as is often the case with UCP 600, this fundamental assumption is not stated expressly. Instead, the term ‘document’ is used.

Need for new term

By broadening the meaning of the term ‘document’ as it is used in UCP 600 and in eUCP subarticle e3 (a) (ii) (Document), it became necessary to identify another term that permitted the distinction between paper and electronic records for the eUCP. The term ‘paper document’ was chosen because it aptly and simply describes the traditional medium in which data was inscribed.

Paper

Printout from a computer, if presented, would be a paper document, whereas the presentation of a portable storage medium would not be. Consequently, the explanation of the sense in which the term ‘paper’ is used resorts to a reference to the ‘paper form’ in which the term was used and understood.
eUCP SUB-ARTICLE E3 (B) (VII): “RECEIVED”
eUCP Definition

The term “received” means when an electronic record enters a data processing system, at the place for presentation indicated in the eUCP credit, in a format capable of being accepted by that system. Any acknowledgement of receipt generated by that system does not imply that the electronic record has been viewed, examined, accepted or refused under an eUCP credit.

General

eUCP sub-article e3 (b) (vii) defines ‘received’ when used with respect to an electronic record.

Significance in practice

Receipt is critical in documentary credit presentations. Documents are not presented until they are received. It is possible to speak in terms of the receipt of a particular document or of a presentation. In respect of paper documents where they are presented in one lot, the two notions occur simultaneously.
With respect to the presentation of paper, a paper document is ‘received’ when it comes into the control of the bank. This step can occur when it is delivered to a clerk or to the mailroom. Once the document comes into the bank’s control, presentation has taken place and the bank assumes the risk of loss of the document.

Receipt of electronic records

Delivery of an electronic record will commonly be made electronically to the bank’s data processing system, so that the element of passing into the bank’s control is still present. There is, however, an additional element, namely that in order to meet the requirements of presentation the electronic record can be authenticated. In this case, mere acceptance into the bank’s system is not sufficient to constitute receipt of an electronic record that is transmitted electronically. As used in sub-article e3 (b) (vii) ‘acceptance’ means that the record can be authenticated, not merely that it has passed into the control of the bank’s system.

Notice of completeness

There is an additional difference between receipt under presentation under UCP 600 and the eUCP, namely that the receipt of a paper document required by the credit constitutes presentation under the UCP 600, whereas receipt of a document, whether a paper document or electronic record, does not constitute presentation until the notice of completeness is received under the eUCP.

Non-receipt

As with a paper document under the UCP 600, non-receipt of an electronic record means that it has not been presented. Non-receipt can occur if the record does not reach the bank’s systems or if it is not authenticated by those systems. As provided in eUCP sub-article e6 (f) (Presentation), such a record is deemed not to have been presented.

Acknowledgments

Computer systems will, on occasion, automatically send out an acknowledgment to the sender that a message has entered the system. Such an acknowledgment does not necessarily imply that the electronic record has been received in the technical sense used in eUCP sub-article e3 (b) (vii) since authentication may not have occurred at that time. In the event of a dispute about whether an electronic record was received, it could be a factor for which the significance would have to be assessed under local law.

eUCP SUB-ARTICLE E3 (B) (VIII): “RE-PRESENT” OR ‘RE-PRESENTED”

eUCP Definition:

The terms ‘re-present’ or ‘re-presented’ mean to substitute or replace an electronic record already presented.

General

The terms ‘re-present’ and ‘re-presented’ existed in eUCP Version 1.1, article e11 (Corruption of an Electronic Record after Presentation), but were not defined within the rules.

Use in UCP 600

The terms ‘re-present’ and ‘re-presented’ are not used in UCP 600.

Meaning of ‘re-present’ or ‘re-presented’

eUCP article e12 (Data Corruption of an Electronic Record) uses the term ‘re-presented’. In this context, the term means to substitute or replace – at the request of a nominated bank – an electronic record already presented. The term is also used in documentary credit practice to characterise the action of the presenter in making a subsequent presentation to cure a discrepant prior presentation.

The two actions should not be confused. Under the eUCP, the re-presentation is merely the replacement of a document already presented and its effect relates back to when it was originally presented; whereas when a non-conforming presentation is being cured by re-presentation, it takes effect as of the time of receipt of the re-presentation.

“AUTHENTICATE/AUTHENTICATION”

General

The terms ‘authenticate’ and ‘authentication’, while used in the eUCP, are not expressly defined.

Significance in paper documents

Authentication in the paper world is the process by which the validity of the representations and the paper documents containing them are ascertained. There are, necessarily, various levels of authentication. In documentary credit practice, the level of authentication of paper documents is facial. The documents are examined on their face. If it is apparent on their face that they are patently false, the bank can refuse to honour on that basis, provided that it is able to prove that they are false, forged, or fraudulent.

Significance in electronic commerce

Authentication has a very different significance in electronic commerce. Because of the possibility of greater levels of authentication than are feasible in the paper world, and because of the unwillingness of participants to accept levels of risk that they normally accept for equivalent documents in the world of paper, there has been considerable attention in electronic commerce to authentication of data. As a result, various levels of authentication have arisen, some tied to specific technologies.

Uses of ‘authenticate’

The term ‘authenticate’ is not only used in the eUCP, but also in UCP 600 and in systems such as SWIFT that support documentary credit practice. Depending on the context, the expectations of the users, and what is commercially reasonable, the constitution of a minimally acceptable level of authentication not only varies, but also is linked to specific technologies.
eUCP

The term ‘authenticate’ is used in the eUCP in two different senses:

• In eUCP sub-article e3 (b) (iii) (Electronic record), it means identifying the person sending a message and the source of the message.
• In eUCP sub-article e3 (b) (iv) (Electronic signature), it means associating the person authenticating with the content of the message authenticated.

Authentication under local law

Many of the laws that address electronic commerce define authentication, and some even tackle the issue of when and at what level it is required. While most such laws are technology-neutral and do not require a higher degree of authentication than would be required for the equivalent information in a paper medium, there are some that impose mandatory requirements of authentication for certain types of documents that are more rigorous than is required by the eUCP.
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