Under Annex 4 on the Digital and Tech Trade Communique, the G7+ countries agreed to examine the legal barriers, and regulatory and technical issues that impede the adoption of electronic transferable records (eTR). As a result of domestic scoping exercises, and a G7+ wide expert meeting, the UK G7 Presidency has identified key issues for countries to consider in order to enable and increase industry adoption of electronic transferable records. The roadmap is not legally binding on G7+ countries, but represents the Presidency’s view on the steps necessary for reform, based on G7+ discussions.
Summary of domestic scoping exercises
A few G7+ countries have reformed their laws to recognise electronic transferable records, but in these jurisdictions industry adoption remains low. Moreover, these solutions show gaps either in coverage across national and subnational jurisdictions or in respect of the trade documents covered. For those G7+ who have not yet reformed their laws at all, there is work to do to identify the legal gaps that restrict use of electronic transferable records.
All documents of title/transferable records relevant to international trade transactions, including bills of lading, promissory notes, bills of exchange, cheques, warehouse receipts and insurance certificates.[footnote 1]
Issue 1: Address domestic legal barriers
Facilitating widespread adoption of eTR requires G7+ countries who have not updated their laws to undertake a comprehensive examination of legal gaps and enact legal reforms at national and sub-national levels, accordingly.
- G7+ countries who have undertaken legal reforms should ensure that these apply to all relevant types of transferable record, in all sub-national jurisdictions.
- G7+ countries who already recognise the legal validity of eTRs should consider issuing clear guidance to the private sector to address market uncertainty. In addition, countries should consider updating relevant status website pages, such as the UNCITRAL Working Group IV MLETR and the International Chamber of Commerce Digital Standard Initiatives.
- G7+ countries who are signatories to the 1930 and 1931 Geneva Conventions on Bills of Exchange and Promissory Notes, and Cheques, should consider the extent to which these Conventions prevent digitisation of Bills of Exchange, Cheques and Promissory Notes in their jurisdictions, and take actions accordingly.
Issue 2: Development of legal solutions
- G7+ countries should ensure that laws are technologically neutral, as outlined under the UNCITRAL MLETR Guidance Note, 2018 (p. 23).
- G7+ countries should ensure that laws do not discriminate between foreign issued and domestic issued eTR, as laid out under Article 19 of the UNCITRAL MLETR
- G7+ countries should ensure their laws on e-signatures:
- do not explicitly exclude their use in eTRs
- facilitate use of eTRs by providing trust and assurance and do not act as cross-border barriers, as under Article 12 of the UNCITRAL MLES
- G7 + countries should ensure legislation is sufficiently prescriptive to give the private sector enough guidance as to the type of factors used to assess the reliability of eTRs (for example, the approach of UNCITRAL under Article 12 of MLETR). This, however, should not create an overly specific criterion for reliability, which runs the risk of becoming quickly outdated.
- G7+ countries should support developing countries to facilitate the use and recognition of eTRs.
- G7+ countries should engage with the work at the WTO JSI e-commerce negotiations to come to an agreed text that will encourage greater recognition of eTR within domestic legal and regulatory frameworks.
Issue 4: Administrative procedures
- G7+ countries should encourage customs authorities to accept electronic documents, whenever possible.
- G7+ countries should issue clear guidance for the administrative requirements, to ensure that the default option does not remain as paper.
Issue 5: Bridge technical and interoperability issues
- G7+ countries should ensure the standards to ensure the reliability of systems can be recognised across-borders. To this end, G7+ countries should consider whether an industry-led initiative for accreditation of electronic transferable records is appropriate, building on relevant international standards.
- G7+ countries should consider the need for alignment on standards for digital identity and authentication, key electronic trust services for reliable electronic transferable records.
Issue 6: Cooperate on cross cutting regulatory issues
- Certain G7+ countries should focus on data protection regulations to ensure that blockchain-based eTRs are compatible with legislation on eTRs.
- G7 + countries need to consider the full implications on whether eTRs count as collateral under their jurisdiction’s capital requirements regulations.