Singapore has become among the first major trading hubs to adopt the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Transferable Records (MLETR).
Singapore’s Electronic Transactions Act (Amendment) Bill was passed by the Singapore Parliament on February 1, 2021, and grants electronic bills of lading, promissory notes and bills of exchange the same legal status as their paper equivalents.
Adopted by the UNCITRAL on July 13, 2017, the MLETR is a uniform model law that aims to enable the legal use of electronic transferable records (ETRs) both domestically and across borders. Transferable documents or instruments typically include bills of lading, bills of exchange, promissory notes and warehouse receipts.
According to UNCITRAL, transferable documents and instruments are essential commercial tools. Their availability in electronic form can help facilitate electronic commerce by improving speed and security of transmission, permitting the reuse of data, and automating certain transactions through “smart contracts.”
ETRs may be particularly relevant for certain business areas such as transport and logistics and finance (fintech), and for developing countries interested in establishing a market for electronic warehouse receipts to facilitate farmers’ access to credit.
Bills of lading are key legal documents in maritime trade. Compared to the use of paper-based bills of lading, the adoption of eBLs will enable the shipping industry to benefit from faster transactions, cost savings through reduced administrative cost of cargo holding and document processing, and lowered fraud risks through the use of digital authentication systems, according to SingaporeÂ’s Infocomm Media Development Authority.
Singapore has a long history of being at the forefront of digital enablement, and the adoption of the model law shows the government’s commitment to the facilitation of trade digitization. It paves the way for other nations to follow suit, providing certainty for corporates and banks as they transition to more efficient, transparent and automated trade processes.
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