For centuries, as the backbone of the global economy, domestic and international trade, and trade finance, have driven business practices that evolved into legal norms. These have been conducted and recorded in vast numbers of paper-based documents, the exchange of which continues to be mostly done physically. This paper-based process has many deficiencies and inefficiencies. It results in economic loss, substantial costs, delays and fraud risks for governments, traders, and financial institutions. Moreover, it contributes to environmental degradation and stifles the inclusion of SMEs in the trade process.
Recent developments in digital technology illustrate the enormous benefits that can be derived if domestic and international trade and trade finance were to be undertaken digitally, in line with the increasing use of digital communications in commerce around the world. However, a significant barrier to digitalisation of trade and trade finance is presented by outdated laws in many countries.
This Report sets out a clear case for paperless, digital trade, contrasting some of the inefficient paperbased trade processes that prevail worldwide with the much faster, simpler, more secure, and environmentally friendly digital trade processes that modern technology offers. The Report examines an effective way in which governments can reform their laws by removing the legal barriers to the digitalisation of trade and trade finance.
This can be achieved through the establishment of a series of building blocks, summarised in this Report, that support electronic commerce and particularly by the adoption of laws aligned with the UNCITRAL Model Law on Electronic Transferable Records (MLETR). This Report also includes a description of the efforts made by some jurisdictions that have reformed, or are in the process of reforming, their laws to align with the MLETR. Drawing on these experiences and other practical sources, including the valuable work of the International Chamber of Commerce (ICC) and the World Trade Organisation (WTO), the Report sets out a legal reform Matrix to help countries assess what legal reforms are needed and proposes a roadmap to accomplish and implement those reforms.
The MLETR is strongly supported by the G7 nations and several international organisations, including the European Bank for Reconstruction and Development (EBRD) which has commissioned this Report from the Centre for Applied Sustainable Transition Law (CASTL). It is hoped that this Report will assist policy makers and legislators in the EBRD’s economies of operations, as well as countries worldwide, to embrace the need for, and undertake, the necessary law reform that will help to unlock the vast benefits that will arise from the digitalisation of trade and trade finance.
Source: Centre for Applied Sustainable Transition Law