The ICC Banking Commission's attempt to draft an electronic supplement to UCP 500 took a large step forward during the Commission's meeting in Istanbul, Turkey on 21-22 November. The working party developing the first draft of the supplement met for eight hours and made a report to the full Commission.

Dan Taylor (US) and Rene Mueller (Switzerland), co-chairs of the working party, both stressed that the supplement is fluid and that it is a work in progress. A number of preliminary decisions have been reached, and the working party hopes to have a first draft to circulate to ICC national committees for comment in December.

What are the issues concerning the working party? First, whether the eUCP, as it is called, would be automatically incorporated if the parties to a credit agree to use UCP 500. The current thinking is that it would not, that the parties would have to expressly incorporate the eUCP. This is because it cannot be assumed that parties using the UCP would be aware that an electronic supplement exists, at least not at this early stage.

A second issue is whether the eUCP would apply to presentations that are part paper and part electronic, as well as to presentations that are all electronic. Again, the current thinking is that it would. As Dan Taylor put it, "Paper documents will probably continue to be examined the way they are today. . .in many cases, examination of the electronic record would be by looking at a screen ... but at least in the early stages it's an evolutionary process." Added Vincent Maulella (US): "We envision . . .a transition period. We realise that if the presentation is totally paper, then we already have the UCP that works for us. The supplement we are talking about is designed to address the situation where you can have all electronic or a combination of paper and electronic." Maulella added: "It's that combination of paper and electronic that presents a real challenge to us."

Some other issues being addressed by the working party:

- How does one define "authenticity" in relation to electronic records rather than documents in the paper world?

- What, in fact, constitutes a document in the electronic world?

-What do the terms "sign", "signed", or "signature" mean when dealing with electronic documents?

-What does a "superimposed notation" or "stamped" mean?

-What is the place of presentation in terms of an electronic record?

The objective of the working party is to have a final draft of eUCP ready for the Banking Commission to approve, either in May or in November. However, as mentioned in the 15 November article in DC-PRO, these are goals rather than fixed dates. Anything having to do with changes in UCP has a tendency to take longer than anticipated.

On another electronic subject, the so-called URGETS rules (Uniform Rules/Guidelines for Electronic Trade and Settlement), the Banking Commission took note of the fact that several ICC national committees still were dissatisfied with the rules that had been produced. Much broader in scope than the proposed eUCP, URGETS are intended to serve as broad overall rules for electronic transactions, which parties could make binding by incorporating them into their contracts.

But URGETS has proved to be a difficult nut to crack, and ICC national committees have, in effect, asked the ICC to go back to the drawing board to clarify and improve the rules. The Banking Commission, not wanting to abandon URGETS, has approved the idea of a task force being set up to go over the rules one more time to see if they could be rewritten to make them acceptable to national committees. If there is support elsewhere in the ICC for a task force, it could be set up within a few weeks. If not, the URGETS will be abandoned. In any case, setting a timetable for a revised URGETS is not possible at this time.

DC-PRO will publish periodic updates on these two projects.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.