Described as one of the most significant changes to the way the UK trades in centuries, the Electronic Trade Documents Bill enters Parliament this week.
The Bill will remove all legal requirements for commercial trade documents to be handled on paper, claiming to generate “£225 billion in efficiency savings, £25 billion in SME trade growth and £1 billion new trade finance.”
Preparations for the change are being headed up by the newly Teesside-based C4DTI, which has already begun work with Singapore’s Infocomm Media Development Authority, the UK’s Department for Digital, Culture, Media and Sport, and the Department for International Trade to test and connect digital trade systems between Singapore and the UK,
“We know from the evidence that there are terrific economic gains to be made for trade if companies digitalise systems and remove paper but this is not something that will happen overnight,” said Chris Southworth, Secretary General, ICC United Kingdom.
“That is why the C4DTI has been established, to align efforts across government and the private sector and accelerate transformation across the trade system. Trade plays a huge role in the global economy so digitalisation is vital to establishing a more sustainable system. Real time transactional data will enable us to gather far richer, more insightful information to help us track and monitor the flow of sustainable goods and finance across the system. This is simply not possible if information is held on paper documents.”
To help prepare the market for digitalised trade systems, C4DTI is launching a series of new services, including a national campaign in partnership with Ubisecure and the Global Legal Entity Identification Foundation (GLEIF) to promote the adoption of Legal Entity Identities (LEIs), the widely recognised and standardised organisation identifier.
These are to enable companies to speed up due diligence checks, reduce fraud and efficiently track secure transactions of goods and finance.
“The need to accurately identify, authenticate and trust organisations is essential if we are to realise the full potential of the digital economy,” added Simon Wood, CEO, Ubisecure.
“Over 2m organisations already have Legal Entity Identifiers to help with financial transaction, but this is the tip of the iceberg of the greater global economy… We applaud the ICC and its partners for its digitalisation education initiatives, especially by bringing attention to the benefits and necessity of the LEI for modern business. We look forward to supporting ICC members with the adoption the identifier.”
According to the ICC Centre, a typical paper-based transaction can involve 27 documents and 35 government agencies causing a wait of up to three months and imposing a cost as much as £80,0001 on those involved.
At the moment, less than 1% of bills of lading are handled in digital form with 188 countries requiring all commercial trade documents to be on paper.
C4DTI has just opened its new office at Teesside University in Middlesborough, which will be shared with the Institute of Export and International Trade.
