On 20th September 2023, the Electronic Trade Documents Act (‘the Act’) became effective in the United Kingdom. This legislation grants legal recognition to electronic trade documents, including electronic bills of lading (‘e-bills’), aligning them with their paper counterparts. Similar legislation had been previously adopted by Singapore, reflecting global momentum toward digital trade, says an article published on safety4sea website.
Summary
- The Electronic Trade Documents Act came into effect in the UK on September 20, 2023.
- It grants legal recognition to electronic trade documents, including e-bills, aligning them with their paper counterparts.
- The Act was driven by industry demand for digital trade solutions and was influenced by the Model Law on Electronic Transferable Records (MLETR) established by UNCITRAL in 2018.
- It marks a significant milestone in the adoption of e-bills and electronic systems, particularly in international carriage and trade where English law and bills of lading are prominent.
- Before the Act, e-bills lacked legal recognition under English law and did not have the same status or functionality as paper bills of lading.
What Is The Purpose Of The Change?
The enactment of the Electronic Trade Documents Act was driven by both industry demand for digital trade solutions and the Model Law on Electronic Transferable Records (MLETR), a uniform model law established by the UN Commission on International Trade law (UNCITRAL) in 2018. This legislative framework provided the basis for individual countries to modernize their legal systems.
What Is The Significance Of The Act?
Given the prominence of English law and bills of lading in international carriage and trade, the Act marks a significant milestone in the adoption of e-bills and electronic systems. It ensures that e-bills have the same legal recognition and functionality as traditional paper bills of lading.
Changes In Legal Position?
Before the Act, e-bills lacked legal recognition under English law. Consequently, they did not enjoy the same legal status or functionality as paper bills of lading. The Act rectifies this by enabling the transfer of rights and liabilities in e-bill contracts to third parties, similar to paper bills of lading. Additionally, the Act addresses the challenge posed by the intangible nature of e-bills by allowing them to be legally possessed, thus ensuring their effectiveness in trade transactions.
Global Adoption Of MLETR Legislation
While MLETR-based legislation has not been widely adopted globally, several jurisdictions, including Singapore, the UK, and certain US states, have already aligned their legal frameworks with MLETR principles. Other countries, such as France, Germany, and Japan, are expected to follow suit in 2024, with further adoption anticipated in China, the Commonwealth, ASEAN, and elsewhere in subsequent years.
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Source: safety4sea
