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Background

WTO WORK PROGRAMME ON ELECTRONIC COMMERCE - 23 March 2023

• Trade digitalisation is about the use of digital technology to improvetrade processes, aiming to make them easier, cheaper, faster, and more secure.
• It means increasingly moving from a world where trade is dominated by paper-based, manual, and fragmented processes to one which isdigital, automated, and more interoperableacross borders.
• This evolution will unlock new opportunities for micro, small, and medium-sized enterprises (MSMEs), including those in developing countries and those run by women, making global trade more inclusive.

UNCITRAL Model Law on Electronic Transferable Records (2017) (MLETR)

• Enable thelegal useof electronic transferable records both domestically and across borders.
• Applies to electronic transferable records that arefunctionally equivalentto transferable documents or instruments.
• Transferable documents or instruments are paper-based documents or instruments thatentitle the holder to claim the performance of the obligationindicated therein and that allow the transfer of the claim to that performance bytransferring possessionof the document or instrument.
• Transferable documents or instruments typically includebills of lading, bills of exchange, promissory notes and warehouse receipts.

Electronic Trade Documents Act 2023

• UK parliamentary approval in progress - targetedJune/July 2023
• The Billalignswith the aims and policy of the MLETR but istailoredspecifically to local law.
• Existing eRulesdefinitions are already modelledon the content of MLETR and, therefore,also alignwith the forthcoming Bill.
• eRules definition - an electronic transferable record is an electronic record that contains the information that would berequired in the equivalent paper document, such as a negotiable bill of lading or an assignable insurance document.

General

• It is necessary to consider applicable legal systems with respect to usage of the eRules in order to determine whether there is anysubstantive conflictbetween the eRules and local law.
• Existing eRules definitions arealready modelledon the content of MLETR and, therefore,also alignwith the forthcoming UK legislation and other global legal updates.
• At the time of drafting the eRules, a lack of relevant legislationnegated any needat the time to include definitions or clarification of the meaning of an electronic transferable record.
• However, inclusion of a relevant definition now reflects existing and evolving customs, practice, and law, whilst reducing uncertainty surroundingelectronic transferable documents.
• For clarity, usage of the term ‘electronic records' in both the eRules and the UNCITRAL Model Law on Electronic Transferable Records (MLETR) is equivalent to the term "electronic documents".
• Trade documents in electronic form should becapable of being possessedas a matter of law, provided that they meet certain criteria which ensures that they can replicate the salient features of paper trade documents.

eUCP and eURC (eRules)

As a result of discussions held in October 2022 during the Plenary Session in Paris of the ICC Banking Commission, the Banking Commission SteerCo established a Working Group with the task of aligning the eRules) with the MLETR in respect of issues pertaining to electronic transferable records. 

It is very important to note that this was not a revision nor an update of the eRules. It was solely an alignment with MLETR with respect to electronic transferable records. 

As stated in the ICC Commentary on the eRules, it is necessary to consider each applicable legal system with respect to usage of the eRules in order to determine whether there is any substantive conflict between the eRules definitions and those contained in the local law. 

At the time of drafting the eRules, very little key legislation was in place, thereby negating any need at the time to include definitions or clarification of the meaning of an electronic transferable record.  

However, recent developments have now made it evident that enhanced alignment with MLETR, and similar legal developments elsewhere around the world, would provide intrinsic benefit. 

The newly aligned Versions of the eRules will be published as eUCP Version 2.1 & eURC Version 1.1.

Specific Changes

The specific changes are detailed below:

• Update eUCP sub-article e3 (b) (iii) & eURC sub-article e4 (b) (iii) to state, 'Electronic record, including an electronic transferable record, means ...'
• Add new definition as eUCP sub-article e3 (b) (v) & eURC sub-article e4 (b) (v)  'Electronic transferable record means an electronic record that contains the information that would be required in the equivalent paper document, such as a negotiable bill of lading or an assignable insurance document.'
• Existing eUCP sub-article e3 (b) (v) & eURC sub-article e4 (b) (v) become e3 (b) (vi) & e4 (b) (vi) respectively.
• Existing eUCP sub-article e3 (b) (vi) & eURC sub-article e4 (b) (vi)  become e3 (b) (vii) & e4 (b) (vii) respectively.
• Existing eUCP sub-article e3 (b) (vii) & eURC sub-article e4 (b) (vii) become e3 (b) (viii) & e4 (b) (viii) respectively.
• Existing eUCP sub-article e3 (b) (viii) & eURC sub-article e4 (b) (viii) become e3 (b) (ix) & sub-article e4 (b) (ix) respectively.
• Existing eURC sub-article e4 (b) (ix) becomes e4 (b) (x).

In addition, an appendix has now been added to the rules, providing recommendations for SWIFT MT700 Field requirements in respect of a credit subject to the eUCP Version 2.1.

The updated versions are now with ICC Publishing and will be made available in due course.

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