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ITFA has announced the release of Uniform Rules for Transferable Electronic Payment Obligations (URTEPO), a unique set of rules that cover electronic payment obligations.
Digitalisation and accompanying changes in the law are now offering new ways to both create or re-create traditional trade finance instruments in digital form as well as use new ways to transfer these.
The rules thereby provide a detailed framework for market players to operate in, facilitating the industry’s transition into modern technological and legislative waters.
In this context, the rules should be viewed as an evolution of the Uniform Rules for Forfaiting (URF 800) that were previously published by the ICC in conjunction with ITFA. The framework will co-exist with the URF 800, since the URF covers paper-based instruments and the URTEPO focuses on electronic obligations.
As part of the rules, technology neutrality will be ensured, as well as compatibility with the principles behind the new breed of legislative innovation in this area, such as UNCITRAL’s Model Law on Electronic Transferable Records (MLETR) and the UK’s Electronic Trade Documents Bill (expected to become law in early 2023).
The new outline will only specifically cover the transfer of an electronic payment obligation that is already in existence in electronic form; it does not detail the technical requirements for the creation of the payment obligation itself beyond providing that the seller is responsible for ensuring it is valid.
ITFA also engaged with Sullivan & Worcester in a legal advisory capacity, to aid with the drafting of the piece.