Electronic Trade Documents Bill







The Electronic Trade Documents Bill (ETDB)[2] was introduced to the UK House of Lords on 12 October 2022. It is currently in progress in the House of Lords and will then progress to the House of Commons. 


Provided the ETDB completes all the parliamentary stages in both Houses, it will be ready to receive royal assent. This is when the King formally agrees to make the ETDB into an Act of Parliament (law). At that stage, the ETDB may be cited as the Electronic Trade Documents Act 2022. It is hoped that this stage will be reached by June 2023. 


The ETDB provides for certain digital trade documents to be put on the same legal footing as their paper counterparts, and implements the recommendations made by the UK Law Commission in March 2022. In essence, the ETDB covers trade documents that must be capable of being possessed for them to have legal effect and function as intended. 


Under current law, only things that can be physically held are considered as being capable of being possessed. Therefore, UK law does not, at this stage, recognise the possibility of possessing electronic documents. 





Outside the UK, ongoing initiatives to address this issue include the UN Model Law on Electronic Transferable Records (MLETR), which was published in 2017.[3]


On 28 April 2021, the G7 digital and technology ministers declared they would work together to develop compatible domestic reforms to allow the use of electronic transferable records. The declaration made clear that the initiative would "champion the work" of the UNCITRAL and "promote" the adoption of legal frameworks "compatible" with the MLETR.[4]





The current text of the ETDB contains seven clauses, which can be summarised as follows:


Clause 1: contains a definition of "paper trade document", and sets out the criteria that a document must satisfy in order to qualify as a "paper trade document". It also sets out a non-exhaustive list of trade documents[6] that are commonly used in connection with trade in, or transport of, goods, or financing such trade or transport. This clause effectively sets the scope for the types of trade document that could be encompassed by the ETDB. 


Clause 2: contains a definition of "electronic trade document", and sets out the criteria that a trade document in electronic form must satisfy in order to qualify as an "electronic trade document", and to therefore be capable of possession under the ETDB. 


Clause 3: provides for the possession and indorsement of electronic trade documents. It also provides that an electronic trade document has the same effect as an equivalent paper trade document, and that anything done in relation to an electronic trade document has the same effect (if any) as it would have in relation to an equivalent paper trade document. 


Clause 4: provides for a change of medium or form; that is, the conversion of a paper trade document into an electronic trade document, or an electronic trade document into a paper trade document. 


Clause 5: contains an "opt-out" provision which, if applicable, will mean that clauses 3 and 4 of the ETDB will not apply to the relevant electronic trade document. 


Clause 6: is the consequential amendments clause, and sets out an amendment to the Bills of Exchange Act 1882, and provides for the repeal of certain provisions of the Carriage of Goods by Sea Act 1992. 


Clause 7: sets out the territorial extent of the ETDB, the commencement date and the short title. 





In 2019, the ICC Banking Commission Executive Committee provided the ICC Working Group on Digitalisation in Trade Finance with a mandate to proceed with the drafting of a new set of rules. 


These are essentially agnostic in nature with regard to underlying technology and effectively address the gaps in digital trade, focusing on the use of data in digital trade transactions. 


The rules, Version 1.0, came into effect from 1 October 2021.[7]





At the ICC Banking Commission meeting held in Paris in October 2022, the ICC Global Banking Commission established a Working Group with the task of aligning the ICC eRules (eUCP & eURC) with MLETR in respect of issues pertaining to electronic transferable records.


Whilst this work is still in progress, it should be noted that the existing eRules definitions are already modelled on the content of MLETR. 


Furthermore, there is nothing in the proposed ETDB that would clash with the eRules. In fact, the re-alignment of the eRules with MLETR will ensure similar alignment with the ETDB. 





A future blog will examine the relationship between the ETDB and ICC rules. 





[1] This blog contains Parliamentary information licensed under the Open Parliament Licence v3.0





[6] bill of exchange; promissory note; bill of lading; ship's delivery order; warehouse receipt; mate's receipt; marine insurance policy; cargo insurance certificate. 



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