The Electronic Trade Documents Bill has been introduced to the House of Lords. The Law Commission was asked by the Government to set out reforms to the legal status of electronic trade documents in 2020. Following a consultation period, the Commission published its recommendations in March 2022.
In May 2022, the Government set out its legislative agenda for the year in the Queen’s Speech. This included an intention to introduce legislation concerning Electronic Trade Documents, as part of plans to support long-term growth in the economy.
The Bill aims to boost the UK’s international trade by reducing the estimated 28.5 billion paper trade documents printed and flown around the world each day.
Business-to-business documents such as bills of lading – a contract between parties involved in shipping goods – and bills of exchange – used to help importers and exporters complete transactions – currently have to be paper-based due to the provisions of the Bills of Exchange Act 1882 and the Carriage of Goods by Sea Act 1992.
Under the Electronic Trade Documents Bill, digital trade documents will be put on the same legal footing as their paper-based equivalents to give UK business more choice and flexibility in how they trade. This aims to lower administration costs and reduce trade contract processing times from between seven and ted days to as little as 20 seconds, according to Trade Finance Global.
In addition, the World Economic Forum has found that digitising trade documents could potentially reduce global carbon emissions from logistics by as much as 12%. Electronic trade documents also increase security and compliance by making it easier to trace records, for instance, through the use of blockchain and distributed ledger technology.
The new rules will require trade documents in electronic form to meet certain criteria designed to replicate the key features of paper trade documents. This includes ensuring only one person, or parties acting jointly, can exercise exclusive control over it at any time, and removing the previous holder’s ability to exercise control over it once it has been transferred on.
The Bill will have its second reading when parliamentary time allows.
