SIGNED BY ELECTRONIC METHOD AND AUTHENTICATED

Dear Sheilar and Abrar,

I hope you agree to allow me to post our discussion on my blog for the benefit of the community.
Best regards,

Mr. Old Man[/COLOR]________________________________________

QUERY FROM SHEILAR

Dear Nguyen Huu Duc, Abra,

I hope you are all fine.
See the attached document, pls. What do you think of the signature?
(P.S. the LC stipulating : a certificate of origin. The presented document should be signed as per ISBP para.181. Then how would you interprete the "electronic signature"?)

Thanks and best regards
Sheilar

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COMMENT FROM ABRAR

Hi Sheilar

My view is that the document is not acceptable.

The certificate is required to be signed (ISBP 37) and this may be done through an electronic process ( ISBP 39). However, reviewing the document at face value, the issuer states that it has been “signed by electronic method and authenticated”, but there is no evidence of the actual “signature” itself, coded or otherwise . So, it is not evident that the document has been “signed” by the issuer, nor is capable of being authenticated by any electronic means.

The issuer appears to be asserting that not only has it been “signed” but also, that it has been “authenticated”, but by whom is not made clear. The second aspect concerns me, because the recipient of the document may be more than one party, and may have cause to rely on its representation and authenticity.

With a manual signature, the process of authenticating a signature is more transparent and straight forward. However, it would be usual for an document containing an electronic signature to contain a code (serving as a “signature”) which is possible to be verified (through a decoding process by reference to a secure password protected database) by parties who have an interest in the representation contained in the document. This document makes reference to neither.

Kind regards

Abrar
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COMMENT FROM MR. OLD MAN

Dear Sheilar,

It is agreed that a certificate must be signed and can be signed in the manner provided in ISBP para. 39. However, the statement “this document has been signed by electronic method and authenticated” does not seem to be within the provisions of the said paragraph. If such a statement were accepted as substitute for signature, then fraudulent documents could be created easily.
Agreed with Abrar. I’ll reject the document.

Best regards,
Nguyen Huu Duc
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COMMENT FROM SHEILAR

Dear Nguyen Huu Duc, Abra,

Thank you for your comment. Very appreciated.
One thing I'm not so sure, do you think whether the electronic signatre in ISBP para.39 refer to art.e 3ii? you know. I'm now thinking how to cite the discrepancy.

Best regard
Sheilar
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COMMENT FROM ABRAR

Dear Sheilar

Although the provisions under eUCP 3 b ii might guide in this respect, however, since the LC is subject to UCP, and since ISBP is specifically intended to provide guidance under UCP, it may not be appropriate to use the clause to form a view in this context.
As to the discrepancy, my view is that it should be cited along the lines: "C/O states that it has been electronically signed, but omits to evidence such electronic signature". I would not refer to "authenticated", as under any other circumstance, banks would not be seeking to authenticate the document.

Kind regards
Abrar
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COMMENT FROM MR. OLD MAN

Dear Sheilar,

Just state: C/O not signed (or signature not found)
If rejected by the presenter, you may further argue that the statement “this document has been signed by electronic method and authenticated” is not acceptable as substitute for signature.

Best regards,
Nguyen Huu Duc
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COMENT FROM SHEILAR

Dear Nguyen Huu Duc,

That is! I'd stated the same words as yours this afternoon!
Let's see what happen next.
See you next week.

Thank you

Sheilar
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COMENT FROM SHEILAR

Dear Abrar,

Thank you for your suggestion . You are quite an expert.
Perhaps there is one thing that I need your clarification. Do you think ISBP is only applicable to UCP rather than both of UCP and e-UCP?
I remember some time ago a well-known authority ever told me that "The intent of 'electronic signature' and 'electronic record' is a message that is authenticated by or within its sending i.e., an electronic record could be a SWIFT message. An electronic signature could be the means by which authentication is achieved and is not a signature as you would identify on a paper document." It seemed that both of you explained the same thing . If an electronic signature is actually unreadable on a paper document , then why does ISBP incorporate the "electronic signature" in para.39? It makes no sense and confuse document examination much more, as examination on paper-basis would have nothing to do with "electronic signature", isn't it?

Best regards
Sheilar
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COMMENT FROM ABRAR

Dear Sheilar

Thank you for your sentiments, but we are all continuing to learn from each other , and I would hesitate to call myself an expert .

The ISBP is after all only a guidance and direction on the proper application of UCP. By its own admissions , the ISBP Drafting Group suggested that it may not cover all possible scenarios, and although some of the guidance may not be in conflict with eUCP, there was no concerted effort to address the eUCP directly in the revision (from 500 to 600). I suppose that although the paragraphs do not directly relate to any of the eUCP provisions, insofar as they may be appropriate to the eUCP, I see no reason why it could not provide guidance also under eUCP. Art. e2 a of eUCP states that UCP automatically applies to an LC under eUCP. Therefore, by extension of this argument, one could argue that ISBP guidance also applies to eUCP LCs.

I agree, more or less on the definition which you have provided regarding electronic signature and authentication, but I would suggest that in the specimen document under review, that whilst there is a requirement for an “electronic” signature to be evident (this could be a coded alphanumeric cipher) it need not be required to be “authenticated” by the bank, in the same way that a manually handwritten signature is also not required to be authenticated by the bank(s).

Para 39 refers to “…. or any electronic or mechanical means of authentication are sufficient”. By this, I understand that whilst the “signature” may be electronic, the document itself must provide reference to the means of authentication, i.e by perhaps the code being verified by logging onto a website of the issuer and authenticated by logging on with unique username /password, etc.

Although a case like this would pose a practioner some problems, with the advance of technology and gradual migration to e-commerce, I suppose the ICC had decided that it cannot be too prescriptive as to what would pass muster as an ”electronically” si
gned document.

Kind regards

Abrar