NOTE: This article was originally published in the ICC United Kingdom's blog publication on the LinkedIn network and is hereby reposted under the ICC UK express permission.
by Igor Jakomin
Deputy CEO, CargoX
The UK’s Electronic Trade Documents Act 2023 stands as a beacon of progress in recognising the credibility and potential within digital trade records while furthering sustainability objectives.
In the era of sustainability digital trade documentation helps conserve trees, reduce water usage, and decrease energy consumption.
Less paper and faster processing
The new legislation, which came into effect on 20 September 2023, replaces a 141-year-old law that required all trade documents used for transferring ownership of goods during imports and exports, to be paper-based for legal validity.
In the era of sustainability, digital trade documentation eliminates the need for paper-based documents, reducing the demand for paper production. This helps conserve trees, reduce water usage, and decrease energy consumption associated with paper manufacturing. The law is particularly relevant to the global container shipping sector, which produces a substantial volume of paper documents annually.
We are confident that this technology will position any country at the forefront of global trade, demonstrating their commitment to both technological innovation and sustainability.
Not only will the new law enhance the UK’s sustainability efforts by reducing paper usage but it will significantly decrease the processing time for trade documents, potentially resulting in an economic boost of over £1 billion by 2033.
Overcoming legal hurdles
Beyond the ecological benefits, this act particularly addresses the challenges faced by the legal framework in England as it adapts to the digital era of commerce.
The absence of any prior legal provisions for electronic trade documents created significant hurdles for technology platforms seeking to modernise and simplify trading processes.
As the use of electronic trade document formats gains wider recognition, there is a growing need to establish consistent legal rules and guidelines applicable across diverse platforms.
This need becomes particularly evident when a document undergoes a transition between two distinct legal jurisdictions, necessitating a transfer that maintains the electronic document’s legal status consistently and without ambiguity.
Actions such as possession, endorsement, and transfer of digital documents now echo the principles that were traditionally reserved for physical paper trade documents.
Governments embrace digital trade and technology providers
The implications of the act strongly resonate with technology providers such as CargoX, a prominent electronic trade document provider. Importantly, it establishes a strong legal basis for the technological progress championed by the company, which played a pivotal role in shaping UK law.
Embedded within the act’s introduction is the UK’s unwavering commitment to promoting electronic trade, aligned with the global trajectory to digitise and promote sustainable global trade practices. This commitment is underscored by similar endeavours by other Governments. In 2021 Egypt pioneered strides with their innovative approach, where the Government of Egypt mandated Advance Cargo Information (ACI) declarations through Egyptian Customs Law #207.
Egypt’s trailblazing efforts required declarations for all incoming cargo to be seamlessly managed via the National Single Window for Foreign Trade platform (NAFEZA), developed by Misr Technology Systems (MTS), with CargoX serving as the authorised blockchain document transfer gateway service provider.
And the global trend towards electronic trade documentation is growing. In Uganda, the government recently signed a MoU with the TA-CargoX consortium who have recently united to establish a trade facilitation platform for Ugandan exporters.
Through streamlined interactions and procedures, this platform seeks to greatly enhance Uganda’s exports, with a specific focus on diverse commodities. This collaborative venture is a testament to the progressive attitude towards embracing electronic trade documentation and sustainability via a global legal framework.
We will continue to advocate our global CargoX Platform for Blockchain Document Transfer (BDT) to enable the most secure electronic document exchange. We are confident that this technology will position any country at the forefront of global trade, demonstrating their commitment to both technological innovation and sustainability.
For CargoX and electronic trade document providers alike, this UK Act marks a monumental stride forward, establishing a precedent that can galvanise further legislative shifts globally.