By a lopsided vote of 63-3, the ICC Banking Commission, meeting in Frankfurt, has approved an electronic supplement to the UCP, its universally used rules on letters of credit. The vote came on a final working party draft that was the culmination of 18 months of work by the Commission.

Called the eUCP for short, the electronic supplement to UCP 500 was written to take account of the increasing number of documents being presented electronically. It is a supplement to, and not a replacement of, the UCP.

The eUCP is to be used in conjunction with the UCP where electronic or part-electronic presentations of documents take place. All of the Articles of the eUCP are consistent with the UCP except as they relate specifically to electronic presentations. A credit subject to the eUCP is also subject to the UCP without express incorporation of the UCP. The eUCP, however, has to be specifically incorporated by the parties if they intend to use it.

The eUCP contains a number of definitions of terms that have a different meaning in the electronic world than in the paper world. Terms such as "appears on its face", "place for presentation" and "sign" - all common features of the UCP - are re-defined to take account of the electronic environment.

One contentious point was the late addition of an Article e11, concerning the corruption of an electronic record. The Commission felt they had to add a special Article dealing with the situation where an electronic document is received, but which, for technical reasons - such as a virus, for example - could not be opened by the bank. Consequently, the new Article e11 says that if a corrupted electronic document is received, the bank will have the opportunity of requesting the sender to re-present the document within a certain time period (in this case, 30 days). If the sender does not re-present it in that time period, the document will be considered to have not been presented.

The new electronic supplement will come into force on April 1, 2002, which allows banks and traders to familiarize themselves with its principles. A full text, in two different formats, will be published by ICC in January.

Observers believe the eUCP fills an important gap in the marketplace. Ron Katz, the Banking Commission's policy manager said: "The UCP has been the flagship of ICC since the 1930s. The eUCP, by anticipating the change to electronic credits, allows ICC to maintain its pre-eminent position in the field of documentary credits."