Jacqueline Cook, Of Counsel, and Larissa Head, Trainee Solicitor, sum up the key points of the Electronic Trade Documents Act 2023 (the Act) which will shortly receive Royal Assent and come into force two months later.

What is the aim of the Act?

The aim of the Act is to allow certain documents used in trade and trade finance in electronic form to have the same legal effect as paper documents. Until the Act comes into force, these electronic trade documents are not considered capable of being (physically) possessed under English law to enforce rights to payment of sums of money or delivery of goods on board a vessel or in a warehouse.

Jacqueline Cook, Of Counsel and Larissa Head, Trainee Solicitor, provide an update on the transition away from USD LIBOR with the deadline of 30 June 2023 upon us.

What do market participants in the trade finance industry need to be doing with the limited time left?

For some time now, parties in the trade finance sector have been aware that the use of USD LIBOR was coming to an end as the transition to use alternative Risk Free Reference Rates (RFRs) progresses using the Secured Financing Overnight Rate (SOFR) as the basis for RFRs for USD.

Jacqueline Cook, Of Counsel, sums up the key messages from Sullivan’s May webinar.

Geoffrey Wynne considered what financiers could do if things start to go wrong in a trade, export or project finance transaction and asked participants to consider a few key questions:

1. could you anticipate a fraud;
2. is the financing structure sturdy; and
3. could the structure facilitate mis-selling in any way?   

With these in mind, the message is clear:

1. carry out transaction due diligence before signing;
2. monitor the income generating assets throughout the life of the transaction; and
3. respect the financing structure.

Over the course of three days, various speakers from the ICC and beyond came together to discuss digitalisation of trade. With trade bodies including the ICC and ITFA pushing awareness and training in this area, there remains a lot to do to bring more businesses in the supply chain into the digital trade sphere.

Helping to improve awareness, this conference could bring some real momentum to proposed changes in law and practice, so that the clear business case for digital trade can be realised.

Jacqueline Cook, Of Counsel and Senior Knowledge Development Lawyer in our London Trade  & Export Finance Practice, has written an article, "Understanding Export Controls in UK Sanctions Legislation Relating to Russia: Issues for Lenders," first published by Butterworths Journal of International Banking and Financial Law (JIBFL) in November 2022.

Following the highly anticipated publication by the Law Commission of its Electronic Trade Documents Report and draft Electronic Trade Documents Bill on 16 March 2022[1], the Electronic Trade Documents Bill (the Bill) is now on the legislative agenda for the year ahead. This was one of thirty-eight bills referred to in the Queen’s Speech (delivered on 10 May 2022) and is part of the UK Government’s plan to prioritise the growth and strength of the economy. The Bill will put electronic trade documents on the same legal footing as paper documents, thereby resolving the prevailing legal blocker under English law preventing possession of an intangible asset. This will greatly enhance the digitalisation of trade under English law.

This post is a follow-up to our recent post "Ukraine in Crisis: What do the UK sanctions against Russia and Russian entities mean for your business? - A practical guide" on UK sanctions against Russia.

In light of Russia’s recent invasion of Ukraine, the international community has responded in new ways through packages of sanctions against the Russian state, Russian banks and named individuals. Amongst other things, UK measures cover a number of trade-related sanctions, namely in respect of energy-related goods or services, infrastructure-related goods, military goods and technical assistance, dual-use goods and technology transfers. Provision of financial sanctions or funds (as defined in the Sanctions and Anti-Money Laundering Act 2018) for such goods, services and technology is also prohibited.

Where are we today?

With sanctions being imposed by the international community on an almost daily basis on Russia (and certain Russian banks and nationals) since its threatened destabilisation and subsequent invasion of Ukraine on 24 February 2022, keeping up with the ever-changing position is a challenge. Both here in the UK and across the globe, numerous financial and economic sanctions, as well as extensive and novel trade sanctions, have been imposed, with more waiting in the wings, all with the goal of limiting Russian access to the international markets, restrict the functioning of international contracts and stopping the flow of money to the Russian state, certain financial institutions and some businesses.

It is starting to feel as if we are nearing the end of a long climb, in fact the end of a long period of uncertainty, for financial institutions and businesses alike, on how to deal with LIBOR transition. Having to keep an eye on regulators' statements, legislation, market developments and a large number of publications and webinars from trade bodies, takes quite an effort and indeed a considerable amount of time, not least when parties are also dealing with the economic fallout of the pandemic and trying to keep trade going. So, are we nearly there?

By Jacqueline Cook, Senior Knowledge Development Lawyer

Following much anticipation, the Alternative Reference Rate Committee (ARRC) has announced its official recommendation of the CME Group’s forward-looking Secured Overnight Financing Rate (SOFR) term rates (SOFR Term Rates). Market participants should now have "all the tools"[1] needed to transition to US dollar (USD) SOFR.

Earlier this week, ARRC issued two press releases:

• publishing (a) conventions for SOFR Term Rates and (b) best practice recommendations for the use of SOFR Term Rates, and announcing the SOFR First Convention switch for USD linear swap trading;[2] and
• recommending CME Group SOFR Term Rates and publishing a factsheet on key steps and milestones for the LIBOR transition.[3]

ARRC’s announcement has been welcomed as "an important milestone for the industry and the continued development of the broader SOFR ecosystem."[4]