The COVID-19 pandemic exposed the global trading system’s continued reliance on physical documentation. One key roadblock in the transition to paperless trade is the lack of recognition in domestic legal systems of electronic transferable records (ETRs). As a policymaker, these are key steps that you can take to unlock the benefits of trade digitisation for your country.
Model Law on Electronic Transferable Records
A solution exists in the form of the UNCITRAL Model Law on Electronic Records (MLETR).
MLETR aims to enable the use of ETRs both domestically and across borders, by recognising the legal validity of ETRs that are functionally equivalent to their paper-based counterparts.
MLETR was developed by Working Group IV of the United Nations Commission on International Trade Law, through an inclusive and deliberative process between 2011 and 2016.
For the Digital Standards Initiative, widespread adoption of MLETR holds the promise of increased efficiency, consistency and coherence in the modernization and harmonisation of legislation on paperless trade.
ICC Guide to Legal Reform
Given the transversal nature of trade finance, reforming laws to enable paperless trade can appear daunting and complex.
This step-by-step guide – Creating A Modern Digital Trade Ecosystem: Practical guide to legal reform to enable electronic transferable records and optimise cross-border trade – leverages lessons learned by first-mover jurisdictions in reforming electronic transactions laws.
Economic analysis of the benefits of digitalisation
Reforming laws and harmonizing legal frameworks stands to generate USD trillions in time and cost savings for international trade.
The following reports, commissioned by Commonwealth Secretariat and ICC United Kingdom with Coriolis Technologies Ltd as independent research partner, set out the immense benefits that will accrue to jurisdictions that create an enabling legal environment for paperless trade by adopting or aligning to MLETR.
Legislation adopting MLETR
Several jurisdictions have legislation adopting MLETR or are in the process of adoption.
Bahrain passed legislation in 2019, becoming the first jurisdiction to adopt the MLETR.
On 1 February 2021 the Parliament of Singapore passed the Electronic Transactions (Amendment) Bill adopting, with modifications, the MLETR.
Belize repealed and replaced its Electronic Transactions Act in October 2021, adopting, with modifications, the MLETR.
The Republic of Kiribati passed the Electronic Transactions Bill in September 2021, adopting the MLETR.
Bills under consideration
Several jurisdictions have bills actively under consideration or awaiting final assent, including Papua New Guinea, Paraguay and Trinidad & Tobago.
Several jurisdictions are engaging in consultations with a view to creating enabling legal environments for paperless trade.