On the 20th July 2023, the Electronic Trade Documents Act 2023 received Royal Assent. The Act came into force on 20 September 2023. The Act will permit the recognition of trade documents such as bills of exchange and bills of lading in electronic form. The Act is intended to assist in resolving issues in the treatment of electronic trade documents. Prior to the introduction of the Act, electronic documents did not have the same recognition as compared to their paper counterparts under English law. The Act covers trade documents where possession is required “as a matter of law or commercial custom, usage or practice for a person to claim performance of an obligation”.
The Act sets out which documents qualify as paper trade documents and provides the following examples:
- a promissory note;
- a marine insurance policy;
- a bill of lading;
- a ship’s delivery order;
- a cargo insurance certificate.
- a warehouse receipt;
- a bill of exchange;
- a mate’s receipt;
The introduction of the Act represents significant progress in the field of trade and finance. Advantages of the new regime include: –
- saving on resources: electronic processing is significantly quicker than transferring a paper trade document
- enhanced security is provided by having a trail of documents
- a reduction in the environmental impact of paper, printing and courier emission
- electronic documents still contain the same information as their paper counterparts
At this moment only a small number of jurisdictions recognise electronic trade documents. Despite concepts of English law being used in this area of trade internationally, real progress will occur with multi-jurisdictional reform. However, the introduction of this Act does constitute a fundamental progressive change within this industry.
UK economy to receive £1 billion boost through innovative trade digitalisation acthttps://www.gov.uk/government/news/uk-economy-to-receive-1-billion-boost-through-innovative-trade-digitalisation-act