Technology Will Help The UK Boost SMEs’ Overseas Trade Thanks To Digital Negotiable Instruments

Bahrain, Singapore, Abu Dhabi, the United Kingdom, Egypt, Paraguay, … more and more jurisdictions are reforming laws to take advantage of the United Nations Commission on International Trade Law (UNCITRAL) Model Law for Electronic Transferrable Records, also referred to as MLETR by trade finance practitioners. ITFA has been contributing to all these efforts and has played a central role in a number of them.

On April 29^th, ICC UK released the outcome of a recent survey which states: “Digitising negotiable instruments will enable businesses to remove unnecessary bureaucracy, promote innovation, speed up transaction times and free up working capital to invest in trade”. The survey was supported by UK banks ahead of planned legal reforms in 2022.

On April 30^th, the UK Law Commission released its proposal for reform and consultation paper to facilitate electronic trade documentation and states “For electronic documents to be widely adopted for trade, they must be capable of being possessed in the eyes of the law.”

ITFA requests that all market participants respond to this critical consultation. The proposed changes represent the biggest potential change to the trade finance landscape for decades and will define it for decades more.

Sean Edwards, Chair, ITFA commented to the news: “ITFA’s work with reformers such as the UK Law Commission and Abu Dhabi Global Market has been important in both changing current law and accelerating the pace of reform to ensure that change can happen in the near future. These developments will secure a sound and robust legal basis for the commercialisation of digitally native negotiable instruments creating or, more accurately, recreating financial markets of great depth.”

The Law Commission paper references ITFA’s DLT-based ePU, an early outcome of our DNI Initiative, as example of available solutions to the digitisation of negotiable instruments.

Building on those regulatory developments and the recent progress achieved by members of the DNI Initiative, ITFA is preparing to launch a regulatory readiness activity stream for members  to practice the use of DLT-based e-originals. We will be sharing more information in due course. In the meantime, we invite you to find out how technology including public DLT will help the UK achieve its ambition to boost SMEs’ overseas trade thanks to digital negotiable instruments.