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.
The Bill sets out certain criteria that trade documents in electronic form must meet in order to replicate the key features of paper trade documents. These include ensuring that an electronic document is subject to exclusive control (only one person, or persons acting jointly, can exercise control over it at any one time) and, once transferred, the previous holder should no longer be able to exercise control over the electronic document.
Putting the Bill on a legislative footing is key to keeping up the momentum towards the digitalisation of trade. While the Bill will only seek to amend English law, it may well be the catalyst for other jurisdictions to take note and put the digitalisation of trade higher up on their own agendas.[2]
The Trade & Export Finance team at Sullivan & Worcester UK LLP has been actively participating in the consultation. For further information on the Bill or on the digitalisation of trade in general, please contact Geoff Wynne or your usual contact at the firm.
Written by Jacqueline Cook (Of Counsel and Senior Knowledge Development Lawyer) and Matilda Johnson (Trainee)
[1] Electronic trade documents: Report and Bill available here.
[2] Note: Singapore concluded the world’s first digital trade financing pilot in December 2021 (https://opengovasia.com/worlds-first-digital-trade-financing-pilot-in-singapore/)