The Electronic Trade Documents Bill has been officially introduced to Parliament in a move to end reliance on using paper for trade documents.
The Bill, which is based on the Law Commission’s recommendations and draft legislation, with some modifications, proposes changes to the law that would allow for the legal recognition of electronic versions of trade documents.
It will modernise old legislation such as the Bills of Exchange Act 1882 and the Carriage of Goods by Sea Act 1992. It will now go through the House of Lords, before going to the House of Commons.
How does the bill help traders?
Businesses throughout the UK will be able to trade more easily, quickly and cheaper, as processing times for electronic documents will be cut to 20 seconds and reduce carbon emissions by at least 10 per cent.
According to the Government, the Bill will boost the UK’s international trade and will reduce the estimated 28.5 billion paper trade documents printed and flown around the world daily.
Commonly used documents which the Bill will enable to become electronic include:
- Bills of exchange
- Promissory notes
- Bills of lading
- A ship’s delivery order
- Marine insurance policies
- Cargo insurance certificates
- Warehouse receipts
Those documents are used to help importers and exporters complete transactions, and currently have to be paper-based due to longstanding laws.
The legislation, when it becomes law, will allow digital trade documents will be put on the same legal footing as their paper-based equivalents to give UK businesses more choice and flexibility in how they trade.
The new rules will require electronic documents to replicate the key features of paper documents. This includes ensuring only one person, or parties acting jointly, can exercise exclusive control over it at any time.
It removes the previous holder’s ability to exercise control over it once it has been transferred on.
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