Within international trade, transferable documents allow to request delivery of goods and payment based on possession of the document. Yet, it has been difficult to reproduce the notion of possession, which has to do with control over tangible goods, in an electronic environment.
In order to address that situation, the adoption in 2017 by the United Nations Commission on International Trade Law (UNCITRAL) of a Model Law on Electronic Transferable Records has provided a benchmark for the implementation by States of legal frameworks conducive to the digitization of international trade’s documentary flows. Realizing this opportunity, several States have already adapted their laws in this way or are now doing so, like the United Kingdom, Germany or France which may adopt such a law by the end of 2023.
The benefits of such changes include, reduced processing time coming close to real time, reduced costs and better profitability, i.e. for all trade finance stakeholders, which will support finance for the stakeholders concerned; greater security, simplification and fluidity for logistical chains, benefiting exporters and importers; increased transparency and traceability of trade; and improved accessibility of trade finance and security tools for companies of sizes. This means European countries should swiftly undertake the necessary transformations.
By convention, documents involved in trade finance are multiple; the main ones being:
- Certificate of Origin
- Customs Declaration
- Packing List
- Bill of Lading
- Commercial Invoice
- Warehouse Receipt
- Insurance Certificate
In practice, many more documents are generally required, often to describe the goods that are transferred. Due to such a diversity of documents, many of them can already be digitalized as they are required for information and the multiplicity (or infinite reproduction of those documents) does not have any practical or legal consequences. Nevertheless, a very small list of documents to not share such liberty, hence need to be unique (e.g. bill of lading, promissory note) as specific rights are attached to those documents, and consequently to their holders.
Source: ICC France, Paris Europlace