Monday, November 28, 2022
HomeBill of LadingUK is a few steps away from legislating electronic trade document transfer

UK is a few steps away from legislating electronic trade document transfer

World merchandise trade was valued at USD28.5 trillion in 2021 and as per the latest figures from the Department of International Trade, international trade is worth around £1.266 trillion to the UK..

Such volume of trade involves multiple stakeholders including those from transport, logistics, insurance, and finance with a single trade transaction by container involving more than 20 stakeholders and countless documents which are currently mostly paper-based..

As per estimates by the Digital Container Shipping Association, the industry would save a global collective of around $4 billion if 50% of the container shipping industry adopted electronic bills of lading, while The International Chamber of Commerce (ICC) estimates that small and medium businesses could see a 13% increase in international business if global trade is digitised..

To support trade digitalisation, The United Nations Commission on International Trade Law (UNCITRAL) which is the core legal body of the United Nations system in the field of international trade law, created the Model Law on Electronic Transferable Records (MLETR) to enable the legal use of electronic transferable records..

Electronic transferable records include documents such as bills of lading, bills of exchange, promissory notes, and warehouse receipts that are functionally equivalent to transferable documents or instruments..

According to the MLETR, an electronic transferable record is functionally equivalent to a transferable document or instrument if that record contains the information required to be contained in a transferable document or instrument, and a reliable method is used to:

  1. identify that electronic record as the electronic transferable record;
  2. render that electronic record capable of being subject to control from its creation until it ceases to have any effect or validity, and (c) retain the integrity of that electronic record..

Since the adoption of MLETR on 13th July 2017, only 6 states and 7 jurisdictions, have adopted this model as legislation and incorporated it into their country’s law..

The Kingdom of Bahrain was the first to adopt legislation based on or influenced by the MLETR in 2018.. The others adopted the legislation in 2021

  1. Bahrain
  2. Belize
  3. Kiribati
  4. Papua New Guinea
  5. Paraguay
  6. Singapore
  7. Abu Dhabi Global Market (U.A.E)

On the 12th of Oct 2022, The Electronic Trade Documents Bill (HL Bill 57) was introduced in the House of Lords in the UK Parliament to provide digital trade documents the same legal footing as their paper-based equivalents to give UK businesses more choice and flexibility in how they trade..

If passed, this bill will modernise old legislation such as the Bills of Exchange Act 1882 and the Carriage of Goods by Sea Act 1992, and will make the UK one of the biggest global trading countries in the world to legalise electronic trade documents..

While electronic trade document transfer technology has been around for decades, as per a recent survey of industry professionals, 27% cited legislative, regulatory, and compliance-related issues as compelling reasons preventing them from using the technology..

In a webinar analysing the State of Electronic Trade Documentation, Emmanuelle Ganne, Senior Analyst, Economic Research Department at WTO had said “We need to make sure that countries have in place legislation to recognize that electronic documents are recognized and therefore the UNCITRAL model on electronic transferable record is a critical Model Law.

We need to see more action on this front to truly make trade digitalilsation possible and to accelerate the move towards trade digitalisation and this is what we’re trying to push at the WTO.

The introduction of the Electronic Trade Documents Bill in the UK Parliament takes the industry a few steps closer to legalising and accepting digital trade documentation..

2 COMMENTS

Be part of the discussion and share your views about the article here..

This site uses Akismet to reduce spam. Learn how your comment data is processed.

RELATED ARTICLES
- Advertisment -
Manifest 2023

Most Popular

Recent Comments