Digital trade advocates have mapped out a comprehensive approach to digital trade reforms, warning that patchy implementation in many markets is creating uncertainty and causing companies and banks to revert to paper.
Digital documents “only work if the law says they do”, said a paper published today by the International Centre for Digital Trade and Innovation (iC4DTI), an industry-led initiative launched in late 2024 in partnership with the International Chamber of Commerce UK.
But the paper said the Model Law on Electronic Transferable Records (MLETR), which has been at the centre of efforts to recognise digital versions of title documents, is only “one piece of a larger puzzle”.
MLETR “assumes that the surrounding legal infrastructure – contract formation, signatures, identity, evidence, automated systems – is already digital-ready”, said the paper, authored by Dr Theodora Christou, a lawyer and lecturer at Queen Mary University of London.
“In most jurisdictions, it is not.”
In practice, the paper found, many jurisdictions have introduced digital trade reforms in a piecemeal way. Separate legal instruments are often drafted by different ministries and enacted in isolation at different times.
“The result is predictable,” it said. “Definitions drift. Exclusions overlap awkwardly. A bill of lading may be transferable under one statute but the underlying contract is governed by a writing requirement under another.
“Courts are left to reconcile texts that were never designed to sit alongside each other. Users – banks, carriers, traders – face uncertainty and revert to paper. And the legislature returns to the drafting table every few years to patch the gaps.”
The findings echo a paper published in 2024 by the Digital Container Shipping Association and law firm Baker McKenzie, which said adoption of electronic bills of lading still faced regulatory barriers in major markets, even where MLETR-based legislation had been introduced.
The iC4DTI paper said Germany’s attempts at digital trade reforms show the cost of a non-comprehensive approach.
The country amended its Commercial Code in 2013 to recognise electronic transport documents, and a decade later enabled electronic transport insurance certificates, but has not followed up with implementing regulations in either case.
At the same time, electronic bills of exchange and promissory notes remain outside its framework, and industry uptake is “correspondingly low”, it said.
By contrast, the paper hailed the Commonwealth Model Law on Digital Trade – unveiled in September last year – as the clearest example of a holistic approach.
The Commonwealth model law encompasses principles from several model laws, including MLETR, covering electronic records, signatures and contracts, as well as identity management and trust services, it said.
The paper emphasised that legal reforms have to be tailored for each jurisdiction, taking into account legal traditions and existing frameworks. Systems based on common law, civil law and financial free zones will all work differently, it noted.
It urged lawmakers to map existing frameworks across the full range of existing model laws, design for cross-border recognition, and ensure texts provide functional equivalence, non-discrimination, technological neutrality and interoperability.
Chris Southworth, co-founder and chair of the iC4DTI, told GTR the paper recognises some countries are currently moving much faster than others.
“We’re setting out international best practice, based on international standards, and that enables everybody to have the legal foundations to be able to participate in this new world,” he said.
Though the paper is aimed at countries yet to reform their legal infrastructure, Southworth said it is also a call to action for companies involved in international trade.
“They’re the ones being served by banks, insurers and technology companies,” he said. “It’s up to those importers and exporters to go to their governments and say this is what we need in order to be agile, resilient and competitive in an increasingly complex world.”
