An update on the progress of the Uniform Rules for Digital Trade (URDT) was presented during the Paris Banking Commission meeting in October 2019.
It was re-emphasised that the objective of the URDT is to develop a high-level framework outlining obligations, rules and standards for the digitalisation of trade finance.
With this in mind, several Drafting Group meetings have already been convened.
This has resulted in the development of an initial framework and draft, which, pursuant to review by the Consulting Group, was distributed to ICC National Committees on 27 September 2019 as Draft 1. Where appropriate, wording in previously approved ICC rules had been used.
The approach adopted has been to produce rules that are agnostic as to the medium used to conduct the Digital Trade save that the Digital Trade has to be conducted using Electronic Records and not paper. That has then required the assumption that there is an underlying physical transaction for a sale and purchase or the provision of services that the Principal Parties (i.e., buyer and seller) have agreed to document electronically, including using a payment method that is itself electronic.
A brief overview of the content of the 16 rules was provided. It was highlighted that, as with the recent eRules (eUCP version 2.0 & eURC version 1.0):
As observed by the UNCITRAL Model Law on Electronic Commerce, in most legal systems, the notion of ‘person' is used to designate the subjects of rights and obligations and should be interpreted as covering both natural persons and corporate bodies or other legal entities. Accordingly, consistent with the approach taken in the UNCITRAL Model Law on Electronic Commerce, any reference in the URDT to a ‘person' should be understood as covering all types of persons or entities, whether physical, corporate or other legal persons.
As a matter of interest, it was noted that the phrase ‘confirmation' has been carried over into the URDT. Confirmation means a definite obligation of a Finance Provider, in addition to that of the Buyer, to make a payment at sight or on a fixed or determinable payment date to the Beneficiary of a Payment Obligation, upon compliance by the Seller of the terms of the Digital Trade Transaction. Finance Provider means a financial institution or body corporate that is involved in a Digital Trade Transaction.
Although there is no definition of ‘electronic' in the URDT, such term would, by its nature, exclude paper documents. It is essential to also note that by using the generic term ‘electronic', the rules avoid linkage with any specific technology or platform, thereby ensuring that the rules remain technology-agnostic.
Feedback from ICC National Committees has been requested by 29 November 2019 and all comments will be reviewed and considered. Pursuant to receipt of comments, an updated version will be drafted, initially for review by the Consulting Group, and then for distribution to ICC National Committees.
Based on preliminary feedback from National Committees, it was felt that more context was necessary in order to understand the scope of the Uniform Rules for Digital Trade (URDT). In this regard, a guidance note, intended to assist in the review of URDT, was distributed on 14 October 2019.