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HomeBill of LadingUK Government moves to accept electronic trade documents
Bill of LadingDigitalisationInformationInnovationTrade


UK GOVERNMENT MOVES TO ACCEPT ELECTRONIC TRADE DOCUMENTS



By Hariesh Manaadiar
May 16, 2022
0
21


Trade documents are documents used by various stakeholders in a trade
transaction including buyers, sellers, banks, customs, chambers of commerce, and
other bodies as a process of evidencing the performance of contractual
obligations, processing payments, financing transactions, transfering of title
of goods, and many other services..

Some of the trade documents used include, but not limted to,

1. Bills of exchange
2. Certificate of Origin
3. Bills of lading
4. Delivery orders
5. Warehouse receipts
6. Mate’s receipts
7. Marine insurance policies
8. Cargo insurance certificates

A vast majority of global trade transactions and shipping transaction follows
English Law as a basis for contract law or handling trade documents..

The Law Commission was tasked by the UK Government to make recommendations to
enable the legal recognition of certain trade documents in electronic form..
Subsequently, the Law Commission published its Electronic Trade Documents Report
and draft Bill on 16 March 2022..



The Bill has now been placed on the legislative agenda for the year ahead as
part of the UK Government’s plan to prioritise the growth and strength of the
economy..

As per the Law Commission, “We have published a report with draft legislation
which would implement its recommendations to allow for the legal recognition of
trade documents such as bills of lading and bills of exchange in electronic
form,“..

The documents covered by the recommended reforms relate only to those documents
in relation to which possession is relevant for a person to claim the
performance of an obligation..

The report defines “document” as below, in an electronic context

“A document in electronic form may comprise multiple components. One component
will always be the particular instance of a data string or data structure
consisting of functional code, which is logically associated with (and
specifically identifies) the human readable part of the document.”

The bill outlines 7 criteria termed “gateway criteria” that a document in
electronic form must satisfy in order to constitute an “electronic trade
document” for the purposes of the recommendations and the Bill..

 1. Information – to qualify as an electronic trade document, a document in
    electronic form must contain the same information as would be required to be
    contained in the paper equivalent.
 2. Reliability – any electronic system that is used for the trade documentation
    process must meet certain standards in the way that it operates and ensure
    that users are able to “trust” systems used, especially given the potential
    risk of cybercrime.
 3. Integrity – Integrity is important for establishing that a document is
    original or authentic and it must be protected against unauthorised
    interference or alteration
 4. Exclusive control – in order to qualify as an electronic trade document, a
    trade document in electronic form must be susceptible to exclusive control;
    that is, only one person (or persons acting jointly) must be able to
    exercise control of a document in electronic form at any one time.
 5. Divestibility – a trade document in electronic form must also be
    “divestible”, meaning that the transfer of an electronic trade document must
    involve the transfer of the document and the control, so that once the
    document is transferred, a person who was able to exercise control of the
    document before the transfer is no longer able to do so after the transfer
 6. Document identification – a trade document in electronic form should be
    identifiable so that it can be distinguished from any copies and to ensure
    that copies do not enable “double spending” or use of the copy as the
    original.
 7. Personnel identification – in order to qualify as an electronic trade
    document, the trade document in electronic form must be capable of being
    uniquely associated with the person or persons who are able to exercise
    control of it.


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Global trade has been around for centuries in various forms, starting from the
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ELECTRONIC BILL OF LADING – ARE YOU AND YOUR COUNTRY READY FOR IT..?? – PART 2

In Part 1 of this article I wrote a bit about the history of globalisation and
trade and its connection with the bill of lading and the road to Electronic
Bills of Lading.. I also posed the question whether you and your country are
ready for electronic bill of lading..…

February 8, 2021

In "Bill of Lading"


 * Tags
 * Common Law
 * Electronic Trade Documents Bill
 * English Law
 * The Law Commission
 * UK Government


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