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Australian bank NAB says it won’t benefit from any time or money savings from Australia’s proposed adoption of digital trade laws unless the entire trade documentation process is digitised.

The Australian government is consulting on implementation of the Model Law on Electronic Transferable Records (MLETR), which recognises digital versions of traditionally paper documents of titles such as bills of lading, promissory notes and bills of exchange.

MLETR only applies to trade documents that can act as documents of title, so while its adoption may speed up some trade and financing processes, other laws may still demand the use of paper trade and customs documentation.

NAB says being able to process electronic transferable records, instead of paper documents, would provide “zero” financial or time savings if other trade documents are not digitised. The change is also unlikely to have any effect on costs for its customers and consumers generally, the bank says.

“Digitising only the transferable record in a set of shipping documents… will not generate any savings,” NAB says in a submission to the government consultation. “The entire suite of shipping documents needs to be digitised for any savings to be realised, including not only seller/exporter invoices, packing lists etc., but also documents issued by third parties such as independent inspection agencies,” and certificates of origin, the bank argues.

Document verification and data capture, including through AI, will be “core” to unlocking “substantial cost savings”, according to NAB.

“Digitisation of transferrable records is just one small part of the broader digitisation of all shipping documents,” the lender’s submissions says. “Until the industry solves the more complex issue of electronic data capture and validation, there will be no material savings from digitising transferable records.”

NAB is one of Australia’s four big banks, alongside ANZ, Commonwealth Bank of Australia and Westpac. It says it spends approximately 40,000 hours per year on processing paper electronic transferable records, across some 30,000 transactions.

Electronic bills of lading and equivalents remain little-used in Australia, industry sources say. Their adoption has mainly been limited to the resource-rich country’s mining giants, who ship large volumes of iron ore, coal and other commodities, mainly to Asia.

NAB says it “recently ceased using the Bolero system” due to “limited usage”. Bolero, a pioneer of trade digitalisation, was bought by Sydney-listed technology company WiseTech in 2022.

ANZ says in its submission to the consultation that use of electronic transferable records “is currently skewed towards sophisticated large enterprises that have the resources to create, apply and drive the adoption of bespoke standards for their own sector”.

Globally, 5% of containerised trade used electronic bills of lading (eBLs) last year, a sharp rise compared to 2023, according to the Digital Container Shipping Association.

The International Chamber of Commerce (ICC), which advocates for adoption of MLETR, has previously suggested that digital documents can help cut costs for trading businesses by reducing wait times and boosting efficiency.

The Freight and Trade Alliance, an advocacy group for trade logistics providers and big importers, told the Australian government consultation that “implementing electronic alternatives under MLETR could result in substantial cost savings, potentially in the tens to hundreds of thousands annually across the sector”.

Other countries that have adopted similar laws include France, Singapore and the UK.

 

Accreditation

The consultation also asked whether Australia should adopt an accreditation scheme for tech providers that handle digital trade documents.

The question has also been a sticking point for adoption in the UK and France, although last year the ICC developed a self-assessment tool for platforms to attest that they are “reliable” systems, the phrasing used by MLETR and the UK’s legislation.

ANZ says in its submission that any law should be accompanied by an accreditation framework, which “could be aided by technical industry frameworks” such as the ICC assessment. “The widespread use of this tool would further promote interoperability,” the bank says.

ICE Digital Trade, previously known as essDocs, says any Australian accreditation system should not be mandatory.

“It would be extremely costly for solution providers to be accredited in all countries where their electronic transferable documents may be accessed/used – and that cost will result in higher costs to business,” the digital trade platform’s submission says. “The market is well versed on ensuring it choses vendors who meet the criteria that they consider important for their business.”

Law firm King & Wood Mallesons’ submission says it is “inclined to agree” with the UK approach of not mandating an accreditation system because “it could be burdensome and delay [the] move to electronic trade documents”.

Other submitters also say it is important for Australia not to deviate from MLETR to ensure its laws are compatible with those in other countries.

The Attorney General’s department, which conducted the consultation, says the next step will be to present implementation options to the government.