Electronic Trade Documents Bill gains Royal Assent - what does it mean for the Tech Sector?
Key parts to the Bill;
- Enabling ‘holders’ of ‘electronic trade documents’ the powers to ‘possess’ these documents in order to legally process the trading of goods and services, following the passing of tests;
- The Bill does not prescribe particular technologies, but provides a legislative framework for the use of such documents including qualifying criteria and guidance;
techUK has worked closely with the Government to modernise its trade policy framework by allowing companies to trade via digital documents, which is likely to have considerable positive impacts on the costs, duration, and environmental impact of customs processes.
What is the purpose of the Electronic Trade Documents Bill?
Many trading processes are based on practices which are hundreds of years old. There is particular importance in having “possession” of certain types of trade document, including bills of sale and bills of exchange. Prior to this Bill, the law did not recognise that electronic documents could be ‘possessed’. This explains why nearly all international trade documents have remained paper based. Trading using electronic documents has become viable over recent years due to the development of new technology that can create unique, identifiable electronic documents.
The Bill will enable businesses to move from paper-based to digital-based transactions when buying and selling internationally. This will help business efficiency and support wider economic growth. As reported by the IOE&IT Daily Update, the International Chamber of Commerce (ICC) estimated that this Bill could generate £225bn in efficiency savings, £25bn in SME trade growth and £1bn in new trade finance. Additionally, digitalisation will increase anti-fraud measures, and address industry concerns around issues of transferability ownership.
What are the key parts that are important to digital tech companies?
Prior to establishing digital trade documents, high-level assessments must be met;
- Tests; The following criteria must be met by all relevant companies;
- Any contractual or other requirements relating to the conversion of the document are complied with;
- The document in its old form ceases to have effect, and all rights and liabilities relating to the document still have effect in relation to the document in its new form.
- Gateway criteria; The following high-level ‘tests’ must be passed;
- The same Information contained in an electronic trade document, Reliability, Integrity, Exclusive control, Divestibility, Identification of the document, Identification of persons who could exercise control.
While the Bill’s criteria and tests are unlikely to create significant pressure upon the government’s operational capacity to support trading and digital tech companies, demand from tech is likely to increase, bringing further investment and adoption into the sector.
Readers can also visit Chris Holmes, Baron Holmes of Richmond’s blog covering the policy file for this year’s #techUKDigitalTrade Campaign Week, here. Previous coverage from techUK can also be found here.
 Electronic Trade Documents Bill entering Parliament will have ‘considerably positive impact'; Institute of Export and International Trade