The team behind a push for France to adopt electronic trade document legislation by the end of this year is calling for an EU-wide regulation to stimulate the digital trade ecosystem.

The French government last year tasked Béatrice Collot of La Banque Postale, and Philippe Henry, a consultant and former HSBC investment banker, with plotting a legal and commercial path for France to recognise digital versions of documents such as bills of lading, warehouse receipts, promissory notes and bills of exchange.

The duo submitted their report, along with a six-page draft regulation defining electronic transferable documents and the concept of possession, to the government in late June.

Momentum toward enabling paperless trade through legal reform has picked up over the last year, following adoption of the UNCITRAL Model Law on Electronic Transferable Records (MLETR) by Singapore, the passage of the UK’s Electronic Trade Documents Bill (ETDB) into law earlier this month and Germany’s near-alignment with MLETR.

Collot and Henry, who led a task force under the aegis of advocacy group Paris Europlace, tell GTR that the French government is likely to introduce the regulation into parliament in the autumn. “We will do everything we can to make it voted [through] by the end of the year,” Henry says.

The French finance ministry did not respond to questions from GTR about the report but Minister of Finance Bruno Le Maire welcomed its publication in June, saying trade finance digitisation “constitutes a lever of competitiveness for our exporters and for the attractiveness for Paris as a financial centre” and the hopes “that we will quickly implement these recommendations”.

Paris Europlace has established a trade commission to advocate for the bill and raise wider industry awareness of digitalisation and trade finance generally.

The task force met some 150 individuals and surveyed around 100 companies in the trade, financial services, technology, shipping and other sectors, according to an English-language summary of the 113-page report.

They also sought to draw lessons from the implementation of MLETR in Singapore and the design of the ETDB, including through a trip to London where they met with the bill’s supporters.

Despite progress in France and Germany, Collot and Henry worry that other EU member states have not shown interest in similar legislation.

To smooth the path for EU-wide adoption of electronic trade document legislation, the group recommends that the French government advocate for a bloc-wide “open trade directive” which would set out parameters for document repositories and data sharing that will be necessary for paperless trade documents to work in practice.

Such a regulation would govern accreditation of repository providers, governance of electronic documents and systems, cyber-security and data protection.

“It would give a framework for the European countries to be first adopting the regulation under their own [laws], but also another framework for how to operate the registers and things like that at European level,” says Collot, adding: “For importers and exporters, it will be easier to access the European community because there will be a unified framework.”

Drawing a parallel with the EU’s second Payment Services Directive, which dictates what data banks can share with third parties with the consent of their customer, Henry says the regulation would cover governance of document repositories “so that the people receive the information they need” while maintaining data privacy.

Under the envisaged regulation, an EU agency would be responsible for granting accreditation to third-party service providers. The digital trade sector is already awash with commercial providers of electronic bills of lading and similar services, but Henry says an EU regulation will help create the much-needed interoperability within the sector.

The UK ETDB says that those dealing in electronic trade documents must use a “reliable system” for doing so, but leaves the term’s interpretation to the courts.

In the UK, there have been fears that companies engaged in international trade were not aware of electronic trade document reform.

In the French context, the task force also found that while understanding of trade finance beyond the financial services sector was low and efforts should be made to promote it, corporates are nevertheless willing to embrace digitisation.

“One element that was clear after we interviewed people is that the exporters and importers are not against digitisation – except that they’ve never been shown a map or a chart of how it’s going to work,” says Henry.

After the regulation has become law, he adds, “we have to invent how this new digital world will work for the users”.