In just a few days, the first ever supplement to ICC's rules on documentary credits (UCP) will come into force. The supplement, called eUCP for short, is effective as of midnight on 31 March 2002.

The supplement, which is linked to the latest version of the rules, UCP 500, will govern if the parties specifically incorporate it in their credits. It will apply in cases of part-electronic or all-electronic presentations. Where the eUCP is different from the UCP in those cases, the eUCP, if incorporated, will prevail.

The 12 Articles of the eUCP cover a range of issues - including the format of electronic records, presentation, examination and, most controversially, corruption of an electronic record. In the latter case, if a bank receives an electronic record that is corrupted - by a virus or some other defect - it may, at its discretion, request that the electronic record be re-presented.

The eUCP represents a recognition of the fact that more and more documents - including bills of lading, certificates of origin, insurance documents, etc. - are being presented in electronic form. The UCP, though it has some provisions relating to electronic issues, is essentially written for paper documents.

Will the eUCP be widely used? One commentator, Neil Chantry of HSBC bank in London and a member of the group that drafted the supplement, believes it will, though not necessarily right away. In an upcoming article for the ICC newletter DCInsight, Chantry says that "in the first two years of eUCP the level of transactions using these rules will be relatively modest, although towards the end of the second year there will be a significant increase in electronic presentations. From the last half of the second year until the end of the fifth year, the use of electronic documentation will grow at an exponential rate." He adds, "After 10 years there will be virtually no paper based trade documentation."

One thing is sure: the world of documentary credits is about to change and, with the eUCP, it will never be the same again.

To view the eUCP click on the Rules menu.