Anyone familiar with electronic trade documents?

[eteb3]

Bills of exchange, L/Cs, etc have been valid in electronic form since 2022.

Electronic Trade Documents Act | Perspectives | Reed Smith LLP

www.reedsmith.com

Does anyone know of any platform or company that facilitates these?

Thanks.

 

[MikeFoulds]

Hi Eteb3

Shipping lines have been using telex release bills of lading, and working with copy documents, for a number of years. Even documents submitted to customs very rarely need to be originals (The only time they are necessary is specific licences which haven't migrated.

There has also been some shipping lines using blockchain based bills of lading, but from what I've seen, it's had limited usage.

Is there really a need for the technology, or is it just change for changes sake, when the current system works smoothly already

 

[eteb3]

Shipping lines have been using telex release bills of lading, and working with copy documents

Interesting

blockchain based bills of lading

Do you know of a platform that offers this? Interested that it's the B/L not the financial instrument itself - I wonder if that makes a difference.

Is there really a need for the technology

The Law Commission thought so.

It seems we're at a disadvantage internationally.

From the overview of their report, which led to the 2023 regulations.

We have estimated that global container shipping generates billions of paper documents a year... the potential positive impacts of using electronic trade documents – including financial and efficiency gains, and environmental benefits – are vast. The International Chamber of Commerce has estimated that digitalising trade documents could generate £25 billion in new economic growth by 2024, and free up £224 billion in efficiency savings.

Despite the size and sophistication of this market, many of its processes, and the laws underlying them, are based on practices developed by merchants hundreds of years ago. In particular, under the current law of England and Wales, being the “holder” or having “possession” of a trade document has special significance. However, the law does not allow an electronic document to be possessed. As a result, nearly all documents used in international trade are still in paper form.

 

[Ash R]

Does anyone know of any platform or company that facilitates these?

Use of electronic Bills of Lading is slowly increasing. Apparently 9 major shipping carriers are committing to 100% eBL usage by 2030.

It is possible to generate a verifiable proof of authenticity for an eBL, which removes the needs for manual verification, and even banks altogether. The future hopefully is unmediated and automated L/Cs and other trade agreements.

Curious what features or capabilities you're specifically looking for in a platform?

Is there really a need for the technology, or is it just change for changes sake, when the current system works smoothly already

100% agree that most of the blockchain L/C products we've seen in the past few years are absolutely pointless.

However, using verifiable proofs of document authenticity gets rid of the complexity and reduces the cost of global trade. Once eBL's are widely in use, there will be very little barrier to adopt this technology!

 

[eteb3]

Curious what features or capabilities you're specifically looking for in a platform?

I want to be able to issue bills of exchange for use as payment in a small community of traders and borrowers. We could use paper, but eBoE would be more secure.

 

[Ash R]

I want to be able to issue bills of exchange for use as payment in a small community of traders and borrowers. We could use paper, but eBoE would be more secure.

My first thought is that you could use something like Docusign as a makeshift solution.

Are you looking for anything else that can't be done using that approach?

 

[eteb3]

Docusign as a makeshift solution.

Are you looking for anything else that can't be done using that approach?

To be legally enforceable as a BoE it has to comply with the new legislation.

I like the simplicity of the Docusign suggestion, but I suspect it won't meet all the requirements of section 2(2) . But maybe it can?

a reliable system is used to—

(a) identify the document so that it can be distinguished from any copies,

(b) protect the document against unauthorised alteration,

(c) secure that it is not possible for more than one person to exercise control of the document at any one time,

(d) allow any person who is able to exercise control of the document to demonstrate that the person is able to do so, and

(e) secure that a transfer of the document has effect to deprive any person who was able to exercise control of the document immediately before the transfer of the ability to do so (unless the person is able to exercise control by virtue of being a transferee).

 

[Ash R]

To be legally enforceable as a BoE it has to comply with the new legislation.

I like the simplicity of the Docusign suggestion, but I suspect it won't meet all the requirements of section 2(2) . But maybe it can?

It more or less can, but I share the hesitancy. Would probably get a lawyer’s verdict on this.

I’m interested in building a solution for this. I just wonder if there are a lot of people out there who could benefit from it. Would appreciate any insights.

 

[eteb3]

I’m interested in building a solution for this. I just wonder if there are a lot of people out there who could benefit from it.

I think in theory there are plenty. And the tech can’t be that difficult.

The limiting factor on take-up must be whether the banks accept a BoE held in the system (or printed off from it)

I suspect any financially succesful system will need to be endorsed by them.

Would probably get a lawyer’s verdict on this.

Edit: as I read it the legislation is basically written to mimic the current law merchant: if a trade document from a particular system is widely accepted , the courts will enforce, on the basis of custom and usage